Contracts (alternative)
In Maryland, liquidated damages in a real estate contract represent:
AAdditional penalties above actual damages
BA predetermined amount of damages agreed upon by both parties in advance✓ Correct
CDamages awarded by MREC after investigation
DCourt-ordered compensation for breach
Explanation
Liquidated damages are a predetermined amount specified in the contract (typically the earnest money deposit) that represents the agreed-upon compensation for breach, avoiding the need to prove actual damages.
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