As a real estate attorney in Massachusetts, I always advise Buyers to take this section seriously. Once your contingencies have expired, the deal is legally binding. If you back out after that without a valid legal excuse, you could lose your entire deposit.

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The deposit amount can range from a few thousand dollars to 5% or more of the purchase price, so this is no small matter.
 

For Sellers, this section provides clarity: if the Buyer defaults, you’ll get the deposit—but you cannot also sue them for lost market value or any other damages.
 

It’s called “liquidated damages” because both parties agree up front that the deposit is a fair estimate of the potential harm if the deal falls apart.

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If you’re unsure about your rights, always consult a real estate lawyer before signing or canceling an Offer.

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Although the Seller Default damages are not listed, the consequences for Seller’s Default are not capped at any dollar amount and can be much greater than the Buyers deposit!  The Buyer may be entitled to sue for the value lost (benefit of the bargain – difference between the sale price and the appraised value) plus all fees and costs that the Buyer paid – inspections, appraisal, attorney fees, and incidental and consequential damages which may include travel and expenses the Buyer may have incurred outside of the damages described above.  Alternatively, the Buyer may sue for “specific performance” of the contract. This is a remedy that forces the Seller to sell the property to the Buyer pursuant to the terms of the contract.