Which One of the Following Statements Accurately Describes the Effect

question 33

Multiple Choice

Which one of the following statements accurately describes the effect of a liquidated damages clause on a plaintiff's claim in a breach of contract action?

• A) This clause conclusively determines the amount of damages that the court can award.
• B) This clause requires the injured party to take all reasonable steps to mitigate (lessen) his losses.
• C) Liquidated damages only apply to losses caused by excess water, such as floods or tidal waves.
• D) The plaintiff will likely be awarded a judgment for all the damages that "naturally and directly flow" from the breach.
• E) The court will likely award the amount set out in the clause if it considers that to be a genuine estimate by the parties of the likely consequences of the breach.

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Definitions:

Reliability

The degree to which a system, component, or process performs its required functions under stated conditions for a specified period of time.

Components In Series

An electrical configuration where components are connected along a single path, so the same current flows through all of them.

Preventive Maintenance

Routine maintenance, inspections, and servicing performed on equipment, machinery, or systems to prevent unexpected failures or breakdowns.

Product Reliability

The likelihood that a product will perform its intended function without failure over a specified period.