Contracts
Under Ohio law, a buyer who breaches a real estate purchase contract without justification may lose their earnest money as:
AA criminal fine
BLiquidated damages if the contract provides for it✓ Correct
CPunitive damages to the seller
DA transfer to the listing agent
Explanation
Many Ohio purchase contracts include a liquidated damages clause specifying that the earnest money is forfeited to the seller as agreed-upon damages if the buyer defaults without legal justification.
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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.
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