Contracts
A Virginia residential sales contract has a 'liquidated damages' clause. If the buyer defaults, the seller keeps the earnest money as:
AA penalty
BAgreed-upon liquidated damages representing estimated actual losses✓ Correct
CA partial commission payment
DAn administrative fee
Explanation
A liquidated damages clause sets a pre-agreed amount (typically the earnest money) as compensation for breach, intended to approximate anticipated losses. Courts enforce these if the amount is reasonable, not a penalty.
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