Contracts
A real estate contract requires the buyer to provide 'earnest money' of $5,000 within 3 days of acceptance. The $5,000 is an example of:
AOption money that makes the contract irrevocable
BConsideration that makes the contract binding✓ Correct
CLiquidated damages pre-agreed by the parties
DThe buyer's down payment
Explanation
Consideration is what makes a contract binding. The earnest money deposit (along with the purchase price and the seller's agreement to sell) constitutes the consideration exchanged by the parties.
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