Brianna Contractually Agreed to Sell a Widget to Oren

question 53

Multiple Choice

Brianna contractually agreed to sell a widget to Oren.She was required to deliver the item on June 1 and he was required to pay $75 000 on the same day.Paragraph 21 of the contract said that if Brianna breached the contract by refusing to deliver the item, Oren would be entitled to a payment of $20 000.Brianna did, in fact, refuse to deliver the widget.Oren therefore has not yet paid the price.Which of the following statements is most likely to be TRUE?

• A)If Oren suffered a loss of $15 000 as a result of Brianna's breach, he will be entitled to payment of that amount if paragraph 21 of the contract was a penalty.
• B)If Oren suffered a loss of $10 000 as a result of Brianna's breach, he will be entitled to payment of $20 000 if paragraph 21 of the contract was a penalty.
• C)If Oren suffered a loss of $30 000 as a result of Brianna's breach, he will be entitled to payment of that amount if paragraph 21 of the contract was for liquidated damages.
• D)If Oren suffered a loss of $10 000 as a result of Brianna's breach, he will be entitled to payment of that amount and no more if paragraph 21 of the contract was for liquidated damages.
• E)If Oren suffered a loss of $20 000, and the court classified paragraph 21 as liquidated damages, then Brianna would be liable to pay $95 000.

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Definitions:

Lochner V. New York

A landmark U.S. Supreme Court case from 1905 that struck down a New York law limiting the working hours of bakers, setting a precedent for the limitation of state interference in private contracts.

Right To Contract

A legal principle affirming individuals' ability to freely enter into binding agreements without government interference.

Bully Pulpit

The bully pulpit refers to a powerful platform, particularly that of the U.S. presidency, used to promote an agenda and influence public opinion and policy.

Monopolies

Economic situations where a single company or entity controls all or nearly all of the market for a particular type of product or service.