Matt,who Owned an Appliance Store,contracted with Stella to Supply All

question 18

Multiple Choice

Matt,who owned an appliance store,contracted with Stella to supply all the new equipment for Stella's new restaurant.Stella wanted all the equipment by October 15th in order to get the restaurant started in time for the holidays.Matt and Stella entered into an agreement by which Matt would pay Stella $300 per day for every day he was late in providing the appliances.Which of the following is a true statement regarding the section of the agreement involving the late charges?

• A)It is known as a penalty provision which will be enforced by a court so long as the plaintiff can establish proof of compensatory damages in at least the amount of recovery requested.
• B)It is known as an invalid provision which will not be enforced.
• C)It is known as a liquidated damages provision which will be enforced by a court so long as it is not so far out of reasonable range as to be punitive in nature.
• D)It is known as a punitive damages provision which will be enforced by a court only if wrongdoing or fraud on the part of the defendant can be established.
• E)It is known as a consequential damages provision which will be enforced by a court only if incidental damages can be established.

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Definitions:

No-fault Insurance

An auto insurance system where policyholders are compensated for minor injuries regardless of the fault in the accident, limiting the right to sue.

Jurisdictions

The authority of an organization or institution to make and enforce laws or policies in a specific area or over certain types of cases.

Strict Liability

A legal doctrine where a party can be held liable for damages without proof of fault or negligence.

No Fault

A legal term indicating that a claim or case is processed without the necessity to prove negligence or fault by any party involved.