A section of a contract that provides that, in the event of default, the purchaser is entitled to $10,000 from the seller is known as a:
A) rescission provision.
B) "time is of the essence" provision.
C) specific performance provision.
D) liquidated damage provision.

Question

A section of a contract that provides that, in the event of default, the purchaser is entitled to $10,000 from the seller is known as a:
A) rescission provision.
B) "time is of the essence" provision.
C) specific performance provision.
D) liquidated damage provision.

Quizplus · Accepted Answer

A liquidated damage provision is a section of a contract that specifies the amount of damages that will be awarded to the non-breaching party in the event of a breach of contract. In this case, the provision provides that the purchaser will be entitled to $10,000 from the seller in the event of default.

A Section of a Contract That Provides That, in the Event