Contracts
An Oregon buyer defaults on a purchase contract. Which remedy allows the seller to keep the earnest money deposit as full compensation?
ASpecific performance
BCompensatory damages
CLiquidated damages✓ Correct
DPunitive damages
Explanation
Liquidated damages clauses specify in advance the amount of damages owed if one party defaults. When a purchase contract designates the earnest money as liquidated damages, and the buyer defaults, the seller keeps the deposit as agreed-upon compensation.
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