Which of the Following Will Be Used in Determining the Enforceability

question 39

Multiple Choice

Which of the following will be used in determining the enforceability of a liquidated damages clause in a contract?

• A)The naming of the clause a "liquidated damages clause".
• B)A statement by the parties that if the contract is breached a set amount of money will be paid by the party in breach to the innocent party.
• C)An acknowledgement in the clause that the damages set out are a realistic estimate of loss.
• D)At the time of making the contract the dollar amount is a genuine pre-estimate of the damages that would result from a breach.
• E)A statement in the clause that the damages payable are not a penalty.

---

Definitions:

Framing Effect

The cognitive bias where people react differently to a particular choice depending on how it is presented, such as a loss or gain.

High-End Retailers

Retail outlets that focus on selling premium products and services, often associated with luxury or top-quality items.

Architecture

The art and science of designing and constructing buildings and other physical structures, focusing on aesthetics, functionality, and the spatial experience.

Prospect Theory

A behavioral economic theory that describes how people choose between probabilistic alternatives that involve risk, where the probabilities of outcomes are known.