Which of the Following Statements Is Incorrect Concerning Liquidated Damages

question 14

Multiple Choice

Which of the following statements is incorrect concerning liquidated damages?

• A) A liquidated damages clause will be enforced if, when the contract was made, it was difficult to estimate actual damages.
• B) The amount of liquidated damages must be a reasonable estimation of the actual harm resulting from a breach.
• C) Nominal damages are not the same thing as liquidated damages.
• D) Liquidated damages are enforceable even if the amount is considered to be a penalty on the breaching party.

---

Definitions:

Autoregressive Model

A model for forecasting a time series that uses the relationship between an observation and a number of lagged observations.

Time Series Data

Data points collected or recorded at regular time intervals, used for analyzing trends, cycles, and seasonal variations over time.

Consecutive Residuals

The differences between observed and predicted values in a sequence, following each other without interruption.

Seasonal Variation

Patterns or fluctuations in data or activities that recur with consistent regularity in specific seasons or times of the year.