In a California residential transaction using the C.A.R. RPA, the liquidated damages clause becomes effective when which of the following conditions is met?
Correct Answer
A) Both the buyer and seller separately initial the liquidated damages provision
Under the C.A.R. RPA and California Civil Code §1675, the liquidated damages provision is only effective when both buyer and seller separately initial that specific clause. Mere signing of the overall agreement does not activate the liquidated damages provision.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
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