ABC Electrical Inc.has a contract with a building contractor that provides that in the event of breach,ABC will be entitled to damages of $10 000.Which of the following best describes this type of contract term?
A) a liquidated damages clause
B) a condition precedent
C) an exemption clause
D) a limitation of liability clause

Question

Quizplus · Accepted Answer

A liquidated damages clause specifies a predetermined amount of money that must be paid as damages for failure to perform under a contract. This clause is used when actual damages may be difficult to calculate.