Can a seller terminate a “liquidated damages contract” by…
The box in paragraph 18(a,2) of the Real Estate Commission approved contract is checked, so that it is a “liquidated damages contract.” The seller does not want to close. Can the seller simply inform the buyer of its intent to terminate the contract and refund the earnest money check?
The fact that the seller has no specific performance remedy against the buyer does not preclude the buyer’s specific performance remedy against the seller. The box in paragraph 18(a,2) of the real estate commission approved form only affects the seller’s remedies against the buyer. Paragraph 18(b) of the Real Estate Commission approved contract form provides the purchaser a specific performance remedy against the seller regardless of how the box in paragraph 18(a,2) of the contract is checked. The seller cannot unilaterally terminate the contract simply by refunding the earnest money.
