When Would the Amount of Liquidated Damages Agreed to by Both

question 15

Multiple Choice

When would the amount of liquidated damages agreed to by both parties in a contract be considered unconscionable?

• A)If the amount is reasonable.
• B)If the amount of losses was easy to estimate while drafting the contract.
• C)If the amount were too small compared to the possible losses.
• D)If the amount were too big to be considered penal.

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Definitions:

Floating-Rate Bond

A type of bond with a variable interest rate that adjusts periodically according to a specified benchmark rate.

Junk Bond

A high-risk, high-yield bond rated below investment grade, offering potential for high returns and high risk of default.