Contracts
What is 'liquidated damages' in a real estate contract?
ADamages awarded by a court after a trial
BA pre-agreed amount of damages for breach of contract, often the buyer's deposit✓ Correct
CThe cost of repairing property defects
DAttorney fees owed by the breaching party
Explanation
Liquidated damages are a pre-agreed sum specified in the contract to compensate the non-breaching party in the event of a breach. In NY residential sales, the earnest money deposit is often specified as liquidated damages if the buyer defaults.
Related New York Contracts Questions
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