Contracts
A Washington purchase and sale agreement contains a liquidated damages clause specifying that the earnest money is the seller's sole remedy if the buyer defaults. If the buyer defaults, the seller may:
ARetain the earnest money AND sue for additional damages
BRetain the earnest money as the full remedy, without suing for more✓ Correct
CRefuse to accept the earnest money and sue for specific performance
DRequest a court determination of actual damages
Explanation
When parties agree in a contract that a specified amount (like earnest money) constitutes liquidated damages and the sole remedy for breach, the non-breaching party is limited to that amount and cannot also pursue additional damages.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
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