Liquidated damages in a Missouri real estate contract are:
Correct Answer
B) A pre-agreed damage amount, typically the earnest money, forfeited by the breaching party
Liquidated damages are a pre-determined amount agreed upon as the remedy for buyer default, typically limited to the earnest money deposit.
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A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
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