Contracts
In Louisiana, 'liquidated damages' in a real estate purchase agreement refer to:
ADamages assessed by the court after litigation
BA pre-agreed sum specified in the contract as the remedy for a party's breach — often the earnest money amount for buyer default✓ Correct
CThe cost of repairs required by the purchase agreement
DThe broker's commission paid regardless of whether the sale closes
Explanation
Liquidated damages are a pre-negotiated remedy for contract breach specified in the agreement — avoiding the need to prove actual damages. In real estate, the seller typically retains the earnest money as liquidated damages if the buyer defaults without valid cause.
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