Contracts
Liquidated damages in a Michigan real estate contract refers to:
ACourt-awarded damages for misrepresentation
BA pre-agreed amount (often the earnest money) payable if a party defaults✓ Correct
CInterest charged on late payments
DAttorney fees incurred during litigation
Explanation
Liquidated damages are a predetermined sum specified in the contract that a defaulting party agrees to pay. In real estate, the earnest money deposit is often identified as liquidated damages in case of buyer default.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Math Concepts
State-Specific Concepts
Escrow Disputes
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