What If a Liquidated Damage Clause Is Punitive in Nature

question 47

Multiple Choice

What if a liquidated damage clause is punitive in nature?

• A)The UCC allows punitive liquidated damages as long as the parties negotiated in good faith to include a liquidated damages clause.
• B)The UCC allows punitive liquidated damages if there were lost profits.
• C)The UCC allows punitive liquidated damage clauses but common law does not.
• D)The UCC allows punitive liquidated damages only in contracts for sale,but not lease contracts.
• E)Courts will not enforce the liquidated damage clause if it is punitive in nature.

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Definitions:

Treynor Measure

A performance metric for determining how well an investment portfolio compensates the investor for taking risk, relative to the market as a whole.

Standard Deviation

A statistic that measures the dispersion or variation of a set of values from its mean, indicating how spread out the values are.

Beta

A measure of a stock's volatility in relation to the overall market; a beta higher than 1 indicates higher volatility than the market.

Morningstar's RAR

Refers to Morningstar's Risk-Adjusted Return, a calculation used to evaluate the performance of an investment by adjusting for its risk.