Answer:
LIQUIDATED DAMAGES means that the Seller may retain the deposit and cannot sue for additional amounts for the Buyer's wrongful breach of the contract.

From the Buyer's perspective Liquidated Damages fixes his downside risk. In a breach of contract case, at worst he loses his deposit. He cannot be sued for any more money.

From the Seller's perspective it limits potential recovery, but greatly simplifies smaller disputes.

I generally recommend that Liquidated Damages applies.

See Contract Guide
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