Contracts, Transfer, and Escrow Practice Question
Question
An investor is comparing two properties involving liquidated damages. The parties need a practical answer before moving forward. Which answer best applies the rule? (Item 109)
Answer choices
- A. Recognize agreed damages provisions subject to California requirements.
- B. It shifts all responsibility to escrow and eliminates the broker’s duties.
- C. It makes oral promises enforceable in every real estate transaction.
- D. It is optional whenever both parties verbally agree to proceed.
Correct Answer
A. Recognize agreed damages provisions subject to California requirements.
Explanation
The correct answer is A because liquidated damages requires candidates to recognize agreed damages provisions subject to California requirements. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.
Question details
- Difficulty: hard
- Domain: Contracts, Transfer, and Escrow
- Objective: liquidated damages