Contracts
A liquidated damages clause in a West Virginia purchase contract specifies that:
AThe seller may sue for any amount of actual damages upon buyer default
BIf the buyer defaults, the seller's only remedy is to retain the earnest money as agreed damages✓ Correct
CThe buyer is always entitled to a full refund if the deal falls through
DThe court will determine damages at the time of breach
Explanation
A liquidated damages clause pre-determines the damage amount (typically the earnest money) in the event of buyer default. If the clause is enforceable, it limits the seller to that amount rather than pursuing actual 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.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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.
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