A provision in a contract to purchase and sell real property liquidating the damages to the seller if the buyer fails to complete the purchase of the property is invalid unless:

(a) The provision is separately signed or initialed by each party to the contract; and

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Terms Used In California Civil Code 1677

  • Contract: A legal written agreement that becomes binding when signed.
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • property: includes property real and personal. See California Civil Code 14
  • Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.

(b) If the provision is included in a printed contract, it is set out either in at least 10-point bold type or in contrasting red print in at least eight-point bold type.

(Added by Stats. 1977, Ch. 198.)

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