Contracts
In NC, 'liquidated damages' in a purchase contract typically refer to:
AThe court-awarded punitive damages for fraud
BThe earnest money deposit which the seller may retain as agreed damages if the buyer defaults✓ Correct
CA government penalty for contract violations
DThe real estate commission owed to the broker
Explanation
Liquidated damages are pre-determined damages agreed to in the contract. In many NC purchase contracts, the parties agree that the seller's remedy for buyer default is to retain the earnest money as liquidated damages (rather than suing for specific performance or actual damages).
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
State-Specific Concepts
Escrow Disputes
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