Contracts
In South Dakota, what is 'liquidated damages' in the context of a real estate contract?
AThe seller's right to sue for lost profits
BA pre-agreed amount (often the earnest money) paid if one party defaults✓ Correct
CCourt-awarded damages after litigation
DThe buyer's cost to cure title defects
Explanation
Liquidated damages are a pre-agreed amount specified in the contract that becomes payable if one party defaults, often the earnest money. This avoids lengthy litigation over actual damages.
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