Contracts
In West Virginia, a buyer defaults on a purchase contract. The seller keeps the earnest money as specified in the contract's liquidated damages clause. The seller:
AMay also sue the buyer for additional damages beyond the earnest money
BHas accepted the earnest money as full satisfaction and typically cannot pursue further damages✓ Correct
CMust return half the earnest money to the buyer by law
DMust obtain WVREC approval to keep the earnest money
Explanation
When a contract contains a liquidated damages clause providing that the seller may keep the earnest money upon buyer's default, acceptance of the earnest money is generally the seller's exclusive remedy — the seller cannot also sue for 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.
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.
Math Concepts
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