A stock short seller promises to pay back a stock at a certain date, but what is the mechanism that actually forces them to buy the stock?
I've read that it is the broker who will do a margin call and buy the stock for them, but that seems only to redefine the question, since the broker is then forced to buy the stock.
Lets say you have a contract for shipment of an item. The seller promises to deliver in 7 days, but you need to write into the contract "WHAT IF" sections for if the seller neglects to do so, for whatever reason. That could be fees, penalties, etc.
So, say the short seller (or broker, or whoever) neglects to purchase the stock, do they owe the other party "all their money", "the price of the stock at a certain instant", "penalties/interest for the X days the stock is not purchased (until bankruptcy of the short seller)"?