A buyer in Phoenix breaches a purchase contract by failing to close on time without justification. The seller incurs $2,500 in carrying costs and loses a backup offer. Under Arizona law, what is the seller's most likely remedy?
Correct Answer
A) Retain the earnest money as liquidated damages
Under Arizona law, earnest money typically serves as liquidated damages when a buyer breaches without justification, providing the seller with predetermined compensation. Option B is incorrect because specific performance is rarely granted against buyers who cannot or will not perform. Option C is wrong as Arizona does not provide for double damages in standard purchase contracts. Option D is incorrect because voiding the contract doesn't automatically entitle the seller to keep deposits without proper liquidated damages provisions.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
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