ContractsQuestion 56 of 100
If a buyer breaches a real estate contract, a liquidated damages clause typically allows the seller to:
a.Sue for unlimited additional money
b.Retain the earnest money deposit as the agreed remedy
c.Force the buyer to buy a different property
d.Void the listing agreement automatically
Explanation
A liquidated damages clause sets an agreed amount, often the earnest money, that the seller keeps if the buyer defaults, avoiding a dispute over actual damages. It limits the seller's recovery to that sum. Both parties agree to this remedy when they sign the contract.
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