Contracts
Under New Mexico contract law, 'liquidated damages' in a purchase agreement refer to:
AMoney paid at closing for title insurance
BA pre-agreed sum the seller keeps as the sole remedy if the buyer defaults✓ Correct
CDamages awarded by a court after litigation
DEarnest money returned to the buyer
Explanation
Liquidated damages clauses pre-establish the remedy for breach — typically the seller retains the earnest money deposit as full compensation, waiving the right to sue for actual damages.
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