Brianna Contractually Agreed to Sell a Widget to Oren

question 57

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 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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