Contracts
In a Montana real estate transaction, 'liquidated damages' in a purchase contract refers to:
AThe actual damages proved in court
BA pre-agreed amount (often the earnest money) that one party receives if the other defaults✓ Correct
CThe cost of repairs required before closing
DThe commission owed to the listing broker
Explanation
Liquidated damages is a pre-agreed amount specified in the contract that one party is entitled to if the other breaches. In real estate, this is often the earnest money deposit, which the seller may retain if the buyer defaults.
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