A buyer and seller execute a TREC contract. Later, they execute an amendment reducing the purchase price by $10,000. The buyer then defaults and the seller seeks liquidated damages. The seller claims the earnest money should be calculated based on the original price. Under the contract:
Correct Answer
B) The amended purchase price controls because the amendment modified the contract terms
The amendment modified the contract terms, including the purchase price. The amended price is the operative contract price for all purposes, including calculating any damages related to default.
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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.
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