1. In Kuish v. Smith the court outlawed "nonrefundable" deposits in real estate transactions.
2. A buyer's deposit may be nonrefundable in a falling market to the extent that the seller is able to establish actual damages.
3. A contractual provision that permits the forfeiture of money or property without regard to actual damages suffered constitutes an unenforceable penalty.
4. General damages, consequential damages, and interest are recoverable under Civil Cove section 3307.
5. If the buyer breaches a purchase agreement, the seller is entitled to general damages if the contract price exceeds the value of the property.
6. To be awarded consequential damages, a seller need only show that such damages were foreseeable.
7. A court may award an injured seller prejudgment interest on general damages from the date of the buyer's breach.
8. If the parties freely and voluntarily agree to a liquidated damages clause, the courts will always resepct their agreement.
9. A liquidated damages clause lets the parties know in advance the extent of liability in the event of a breach.
10. To recover liquidated damages, a seller must first establish actual damages.
11. A liquidated damages clause is enforceable only in a declinig real estate market.
12. A liquidated damages clause is valid unless an opposing party demonstrates that the clause was "unreasonable" based on all information presently known.
13. In residential transactions, a liquidated damages clause that does not exceed 3 percent of the purchase price is presumptively valid.
14. To be enforceable, a liquidated damages clause must be signed or initialed by both the buyer and the seller.
15. A liquidated damages clause must be set out in at least 12-point bold type or 14-point bold contrasting red type.
16. In a contract for an option to purchase a piece of real estate, the prospective buyer is called the optionee.
17. If the optionee does not elect to purchase the property within the time limits of the option, the consideration paid by the optionee is forfeited to the seller.
18. To recover the optionee's consideration, the seller of the property must establish that there has been a breach of contract.
19. Under California law, consideration for an option to purchase real estate may not exceed 3 percent of the purchase price.
20. A recorded option to purchse real estate may cloud title if the transaction is not consummated.