The Amount of Liquidated Damages Included in a Contract That

question 70

Multiple Choice

The amount of liquidated damages included in a contract that would be upheld by a court:

• A) must be reasonable in light of the inconveniences or lack of feasibility of obtaining an adequate remedy.
• B) may be so high as to be punitive to the breaching party.
• C) may be regarded as a penalty.
• D) must be exactly the amount lost in the breach.

---

Definitions:

Merchandise Purchases

The total cost of goods bought for resale during a specific accounting period, excluding any discounts or allowances.

Cash Disbursements

The total payments made by a business for various purposes, including expenses, purchases, and debt repayment.

Operating Expenses

Ongoing expenses incurred in the normal operations of a business, including rent, utilities, salaries, and marketing costs, but excluding the cost of goods sold.

Sales Budget

A detailed projection of future sales, often broken down by product line, region, or sales channel, that guides business planning.