Contracts
A Maryland contract of sale includes a financing contingency. The buyer cannot obtain financing and properly invokes the contingency. What happens to the earnest money?
AIt is forfeited to the seller as liquidated damages
BIt is split 50/50 between buyer and seller
CIt is returned to the buyer✓ Correct
DIt is held by the broker until litigation is resolved
Explanation
When a buyer properly invokes a financing contingency because financing cannot be obtained, the earnest money deposit is returned to the buyer.
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