Contracts
If a Wisconsin buyer defaults on a real estate contract and the seller retains the earnest money as liquidated damages, this is permissible when:
AThe seller simply demands it
BThe contract contains a liquidated damages clause and the seller elects that remedy✓ Correct
CDSPS approves the forfeiture
DThe buyer fails to show up at closing
Explanation
Earnest money may be retained as liquidated damages only if the contract includes a liquidated damages clause and the seller elects that remedy rather than pursuing actual damages.
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