PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM GLOSSARY
Liquidated damages are an amount or measure the parties agree in advance will be recoverable after a specified breach, when the clause is enforceable rather than an unlawful penalty.
Contracts
Contract remedies and status
Define, distinguish, apply, retrieve
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PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDEBuild the complete exam definition
Learn the rule, separate it from the nearest distractor, then apply it to a Georgia fact pattern.
What does Liquidated damages mean?
Liquidated damages are an amount or measure the parties agree in advance will be recoverable after a specified breach, when the clause is enforceable rather than an unlawful penalty.
How do you separate the nearest exam answer?
Liquidated damages are predetermined by contract. Actual damages are proved from the loss, and specific performance seeks completion rather than money.
What changes or stays the same in Georgia?
Georgia purchase agreements may identify earnest money as liquidated damages for a defined buyer default, but the exact remedy election and enforceability depend on the contract and law.
The signed agreement allows the seller to retain the earnest money as the stated remedy after a covered uncured buyer default.
Earnest money is not automatically liquidated damages in every contract or termination.
PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDERetrieve the rule under exam conditions
Answer before reading the explanation. Then explain why every distractor belongs to a different term.
A purchase agreement says the seller keeps the buyer's $5,000 earnest money as liquidated damages if the buyer defaults. The buyer defaults with no valid termination right, and the seller's actual losses come to about $3,000. Assuming the clause is enforceable, what does the seller receive?
- A
$3,000, the actual loss proved
- B
$5,000 plus any actual losses
- C
The $5,000 earnest money
- D
Nothing until a court sets the amount
Liquidated damages are an amount the parties agree in advance will be the recovery for a specified breach, so the seller does not have to prove the actual loss. An enforceable clause fixes the recovery at the agreed amount rather than adding to it. Earnest money works this way only when the contract says so.
Mark each box only when you can perform the skill without looking.
I can define the term in one precise sentence.
I can separate it from the closest look-alike.
I can explain the Georgia rule or confirm that the national rule applies.
I can answer the practice check and explain every option.
PASS GEORGIA
REAL ESTATE EXAM PREPGEORGIA REAL ESTATE EXAM
GLOSSARY TERM GUIDEConnect the term to the wider exam
Use these relationships to move from isolated recall to a connected exam model.
Contracts complete lesson
https://www.passgeorgiarealestate.com/study-guide/contracts/performance-breach-remedies
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