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.
West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.