Legal Question in Real Estate Law in California

Re: default on real estate purchase contract

I'd say you have to read your contract and assume that whatever it says will govern. More likely than not, it will provide for forfeiture of the deposit as liquidated damages. Most of these contracts are written by very experienced lawyers who know what will hold up in court. Once in a great while there will be an example of overreaching, and if after reading your own contract you feel that the liquidated damages provision in unconscionable (exceeds 3%), maybe you can attack it. The bottom line is that you have to start your analysis of your position by knowing and understanding the black-and-white of the papers you signed.