What occurs under a forfeiture clause in land sale agreements?

In land sale agreements, a forfeiture clause provides the seller with the right to cancel the contract and retain all payments made by the buyer in the event of the buyer's default or failure to meet specific obligations outlined in the agreement. This clause acts as a form of protection for the seller, allowing them to recover what they have already received without being required to return the property.

The forfeiture clause typically reinforces the idea that the seller maintains ownership of the property until the full purchase price is paid, and if the buyer breaches the contract, the seller has the option to terminate the agreement and keep any payments made as liquidated damages. This outcome emphasizes the seller's right to mitigate their losses and provides a clear consequence for the buyer's default, thereby ensuring a more straightforward resolution in case of payment issues.

Other options do not reflect the main purpose of a forfeiture clause. The lender's obligation to return property, the buyer's ability to renegotiate terms, or granting more time to the buyer are not necessarily related to this specific clause in land sale agreements.