ContractsBreach_and_remediesEASY
The contract states in advance that if the buyer defaults without excuse, the seller may retain the earnest money as the agreed remedy. What remedy provision is this?
Correct Answer
C) Liquidated damages
Liquidated damages is correct because the facts match a contractually agreed amount, often earnest money, that may be retained as the remedy if a party breaches under the terms of the contract. That is the best description of the relationship, right, or legal concept tested here.
Answer Options
A
Compensatory damagesB
RescissionC
Liquidated damagesD
Mutual releaseWhy This Is the Correct Answer
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Why the Other Options Are Wrong
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Deep Analysis of This Contracts Question
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Background Knowledge for Contracts
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Real World Application in Contracts
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Common Mistakes to Avoid on Contracts Questions
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Related Topics & Key Terms
Key Terms:
breach_and_remediescontractsliquidated_damagesearnest_money
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