A Connecticut buyer defaulted on a residential purchase contract that contained a valid liquidated damages clause designating the earnest money deposit as the seller's sole remedy. Which of the following actions would NOT be permitted under the liquidated damages clause as written?
Correct Answer
D) The seller pursues specific performance in Connecticut Superior Court to compel the buyer to complete the purchase
When a purchase contract contains a valid liquidated damages clause designating the earnest money deposit as the seller's sole remedy, the seller is contractually limited to that remedy upon the buyer's default. Pursuing specific performance — an equitable remedy that would compel the buyer to complete the purchase — is inconsistent with the 'sole remedy' designation in the liquidated damages clause. By agreeing to limit recovery to the deposit, the seller waived the right to seek specific performance or other additional remedies for the buyer's breach.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
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.
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