Contracts
Liquidated damages in a Minnesota real estate contract are:
ADamages calculated by the court after a trial
BA pre-agreed amount (often the earnest money) that serves as compensation if one party defaults✓ Correct
CPenalties imposed by the Department of Commerce for licensing violations
DDamages available only in commercial transactions
Explanation
Liquidated damages are a pre-agreed remedy for breach of contract. In many Minnesota purchase agreements, the parties agree that if the buyer defaults, the seller retains the earnest money as liquidated damages. This avoids costly litigation to prove actual damages.
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