​Which of the Following Statements Concerning Liquidated Damages Is NOT

question 17

Multiple Choice

​Which of the following statements concerning liquidated damages is NOT TRUE?

• 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.

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Definitions:

Adverse Selection

A situation where asymmetric information leads to the selection of undesirable risks or goods, particularly noticeable in insurance and finance markets.

Labor Market

The supply and demand for labor, where employers seek to hire employees, and individuals offer their work or services.

Screening

The process of evaluating or examining something to ascertain its condition or identify the presence of something.

Signals

Actions or indicators that convey information or intentions in various contexts, such as economics, where they can indicate future behavior or trends.