In the Absence of a Liquidated Damages Clause and in the Absence

question 5

Multiple Choice

In the absence of a liquidated damages clause and in the absence of proof of greater damages,the seller's damages are computed as

• A) 25% of the purchase price or $500,whichever is less.
• B) 25% of the purchase price or $500,whichever is greater.
• C) 20% of the purchase price or $500,whichever is greater.
• D) 20% of the purchase price or $500,whichever is less.

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Definitions:

Direct Cost

Expenses that can be directly traced to the production of specific goods or services, like raw materials or labor.

Indirect Cost

Expenses not directly tied to a specific product or service but necessary for the operation of a business, such as utilities and rent.

Current Assets

Current assets are all assets a company expects to convert into cash or use up within one fiscal year or operating cycle.

Manufacturer

A business entity or individual that makes finished products from raw materials through various processes, tools, and machinery, often on a large scale.