What happens to the deposit if a buyer fails to complete an Alberta purchase contract without a valid reason?
Correct Answer
B) The deposit is typically forfeited to the seller, who may pursue further damages
If a buyer breaches an Alberta purchase contract by failing to complete without a valid legal reason, the seller is typically entitled to retain the deposit as part of their damages. The seller may also pursue additional damages beyond the deposit amount if their actual losses exceed the deposit.
Why This Is the Correct Answer
Under Alberta contract law, when a buyer fails to complete without valid legal justification, the deposit is typically forfeited to the seller as part of liquidated damages. The AREA purchase contract provides for this. Furthermore, the seller is not limited to the deposit — they may pursue additional damages in court if their actual losses exceed the deposit amount.
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