Contracts
What is 'liquidated damages' in a Rhode Island real estate contract?
AActual damages proven in court
BA pre-agreed amount specified in the contract as the remedy if one party breaches✓ Correct
CDamages awarded by a jury
DThe forfeiture of the buyer's earnest money only when the seller requests it
Explanation
Liquidated damages are a pre-agreed amount specified in the contract to be paid as compensation if one party breaches. In real estate, earnest money is often designated as liquidated damages if the buyer defaults.
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