An Ohio purchase agreement contains a liquidated damages clause stating the seller may retain the $8,000 earnest money if the buyer defaults. The buyer defaults, and the seller also wants to sue for additional damages beyond the $8,000. Under Ohio law, can the seller pursue both remedies?
Correct Answer
D) No, a valid liquidated damages clause typically limits the seller's recovery to the specified amount
Under Ohio law, when a valid liquidated damages clause is included in the contract, it typically represents the parties' agreed-upon remedy for breach. The seller who elects to retain the earnest money as liquidated damages generally cannot also pursue additional actual damages, as the clause is intended to be the exclusive remedy for breach.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
More Oh Specific Contracts Forms Questions
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Peter, an Ohio buyer, asks his agent about the difference between actual damages and liquidated damages. Under Ohio law, which statement correctly distinguishes the two?
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