In a Florida residential contract file in Miami, the buyer paid an initial escrow deposit of $3,000 and an additional deposit of $2,000. The buyer then defaulted, and the contract gives the seller the right to retain the deposits as liquidated damages. How much may the seller retain under that clause?
Correct Answer
D) $5,000
Under the stated liquidated-damages clause, the seller retains the deposits actually paid: $3,000 + $2,000 = $5,000.
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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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Agent Thompson receives a personal check for $3,000 earnest money on Friday afternoon. The buyer asks if the check will be deposited immediately. What should Thompson tell the buyer about Florida's deposit requirements?
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Broker Williams holds $12,000 in earnest money when both parties dispute its disposition after the buyer's loan is denied. The buyer claims the denial was due to property appraisal issues, while the seller claims it was due to buyer's credit problems. What should Williams do?