Earnest Money

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Related to Earnest Money: option money, earnest money contract

Earnest Money

A sum of money paid by a buyer at the time of entering a contract to indicate the intention and ability of the buyer to carry out the contract. Normally such earnest money is applied against the purchase price. Often the contract provides for Forfeiture of this sum if the buyer defaults. A deposit of part payment of purchase price on sale to be consummated in future.

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To sum up, earnest money, if performing all three functions-the payment, evidential and a guarantee-can be used as one of the means to secure a contract.

Legal regulation of the earnest money in Lithuania

Earnest money performs the following three functions:

Legal regulation of the earnest money in Lithuania

With banks offering the earnest money to applicants, the scheme has brought back the fence sitters, who were looking for some financial assistance.