Contracts
A liquidated damages clause in a New Mexico purchase contract typically specifies that:
AThe court will determine damages at trial
BIf the buyer defaults, the seller may keep the earnest money as their sole remedy✓ Correct
CThe seller must refund double the earnest money if they default
DDamages are limited to attorney's fees
Explanation
A liquidated damages clause pre-sets the amount of damages for breach. In purchase contracts, this often means the seller retains the earnest money as full compensation if the buyer defaults without an acceptable reason.
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