Contracts
In Pennsylvania, what remedies are available to a seller when a buyer defaults on an Agreement of Sale?
AThe seller may only keep the earnest money deposit
BThe seller may retain the earnest money as liquidated damages if so specified, seek specific performance, or sue for actual damages✓ Correct
CThe seller must sue in federal court for contract enforcement
DThe seller may only seek return of any seller concessions already paid
Explanation
When a Pennsylvania buyer defaults, the seller's remedies depend on the contract terms: (1) retain earnest money as liquidated damages if the contract specifies this remedy; (2) seek specific performance if money damages are inadequate; (3) sue for actual damages (difference between contract price and resale price plus carrying costs). Most Pennsylvania residential contracts include liquidated damages clauses making the earnest money the seller's exclusive remedy.
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