Where the Parties to a Contract Agree in Advance on an Amount

question 60

Multiple Choice

Where the parties to a contract agree in advance on an amount of damages to be paid in the event of a breach,in order for the damages to be effective

• A)they can be any amount agreed on by the parties,who are presumed to know what they have contracted for.
• B)they must be reasonable in the context of the contract.
• C)they must be meant to penalize the party committing the breach.
• D)they must relate solely to the breach,without regard to penalty or reasonableness.
• E)none of the above

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Definitions:

Merchandising Companies

Businesses that purchase goods in finished form for resale to consumers or other buyers without further processing.

Finished Goods Inventory

Inventory that is completed and ready for sale.

Cost of Goods Manufactured

The total production cost of goods completed during a specific period, including labor, materials, and overhead costs.

Cost of Goods Sold

The straight-out costs connected to generating the products a company sells, involving materials and labor force.