Contracts
What is the holding in a Nevada liquidated damages clause when the buyer's earnest money is the designated remedy?
AThe seller can pursue additional damages beyond the earnest money
BThe seller's sole and exclusive remedy for buyer default is the retention of the earnest money, and the seller waives the right to seek additional damages if they accept the liquidated damages clause✓ Correct
CThe buyer automatically forfeits the earnest money without court order
DThe earnest money must be returned to the buyer regardless of default
Explanation
When a Nevada purchase contract includes a liquidated damages clause specifying the earnest money as the seller's remedy for buyer default, the seller generally may only retain the earnest money and cannot sue for additional damages. This provides certainty for both parties.
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