Default Remedies

Question 1

What are liquidated damages?

Answer 1

The seller can choose to accept the buyer’s earnest money

Releases all parties from any obligation under the contract

Question 2

What are monetary damages?

Answer 2

The injured party may seek other monetary relief as provided by the law.

No specific amount, however much that is ruled by the court.

Question 3

What is specific performance?

Answer 3

The injured party files a court action attempting to enforce the terms of the contract on the defaulting party.

(The only remedy that could possibly result in closing of the transaction).

Question 4

In the event that a seller defaults and refunds the buyer’s earnest money; is this considered liquidated damages?

Answer 4

No

Question 5

What are the three resolutions if the buyer defaults?

Answer 5

1. ) seller can accept earnest money
2. ) seller can seek monetary damages through small claims court
3. ) seller can sue the buyer, forcing them to buy the property