Which One of the Following Statements Accurately Describes the Effect

question 25

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 lessen (mitigate) his losses.
• B) The plaintiff will likely be awarded a judgment for all the damages that naturally and directly flow from the breach.
• C) The court will award the amount specified only if it accurately reflects the losses that actually took place.
• 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 a breach.
• E) Liquidated damages only apply to losses caused by excess water, such as floods or tidal waves.