An Earnest Money Deposit (EMD) is a payment made by a buyer to a seller or contractor to demonstrate their commitment and seriousness in the transaction. In the context of construction, an EMD is typically a sum of money that a bidder or contractor puts down as a guarantee that they will fulfill their obligations under a contract or bidding process.
The purpose of an EMD is to protect the interests of the seller or client by ensuring that the bidder or contractor has sufficient financial resources to complete the project. If the bidder or contractor fails to fulfill their obligations, the seller or client may be entitled to keep the EMD as compensation for any losses they incur as a result of the breach of contract.
EMDs are typically a percentage of the total contract price and are paid when the contract is signed. The exact amount of the EMD may vary depending on the size and complexity of the project, as well as the specific requirements of the bidding or contracting process
