Which One of the Following Statements Accurately Describes the Effect

question 35

Multiple Choice

Which one of the following statements accurately describes the effect of a liquidated damages clause on a plaintiff's claim in a breach of contract action?

• A) This clause requires the injured party to take all reasonable steps to mitigate (lessen) his losses.
• B) The plaintiff will likely be awarded a judgment for all the damages that "naturally and directly flow" from the breach.
• C) This clause conclusively determines the amount of damages that the court can award.
• D) The court will likely award the amount set out in the clause if it considers that to be a genuine estimate by the parties of the likely consequences of the breach.
• E) Liquidated damages only apply to losses caused by excess water, such as floods or tidal waves.

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Definitions:

Advertising

The action of calling public attention to products, services, needs, etc., especially by paid announcements in print, broadcast, or online media.

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, allowing for some degree of market power.

Market Structure

The organization and characteristics of a market, including the number and size of firms, product differentiation, and entry and exit barriers.

Homogeneous Products

Goods that are seen as identical by consumers, making them perfect substitutes for one another.