Contracts
In Minnesota, liquidated damages in a purchase agreement are typically:
APunitive damages awarded by a court
BA predetermined amount (often the earnest money) agreed upon as compensation if a party defaults✓ Correct
CDamages calculated based on lost income
DAttorney fees paid at closing
Explanation
Liquidated damages are a pre-agreed amount of compensation for breach, often the earnest money deposit. When a buyer defaults, the seller may retain the earnest money as liquidated damages if specified in the contract.
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