Clear Creek Corporation Enters into a Contract with Brightside Management

question 38

Multiple Choice

Clear Creek Corporation enters into a contract with Brightside Management Associates to manage and maintain Clear Creek's apartment complex.Their contract provides that neither party can recover damages for a non-fraudulent or unintentional breach.This is

• A)a limitation-of-liability clause.
• B)an exculpatory clause.
• C)a liquidated damages clause.
• D)a quasi contract.

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Definitions:

Inefficiency

The lack of optimal use of resources, resulting in lost potential output or increased costs.

Monopoly Pricing

Pricing strategies employed by a monopoly, where a single firm controls the entire market for a good or service and can influence prices.

Deadweight Loss

Economic inefficiency resulting when the market equilibrium for a good or a service is not achieved.

Social Cost

The total cost to society, including both private costs and any external costs, from producing or consuming a good or service.