Parties to a Contract May Specify in Advance the Amount

question 115

Multiple Choice

Parties to a contract may specify in advance the amount of damages that must be paid in case of breach. These liquidated damages​

• A)are generally payable in a liquid form (for example oil, or solvents, or alcoholic beverages).
• B)are enforceable if they are a penalty designed to frighten parties into performance as agreed.
• C)must be reasonable and not a penalty. They reflect the difficulty of assessing the actual or anticipated damages that would be caused by any future breach.
• D)are most appropriate when actual damages will be easy to calculate.

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Definitions:

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