Bobby and Fredrick specify in their contract that for every day Bobby's construction company does not complete Fredrick's new house, Bobby will deduct $1000. This is known as a ________ damages clause.
A) punitive
B) compensatory
C) nominal
D) consequential
E) liquidated

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. In this case, the $1000 deduction for each day the construction is delayed is an example of liquidated damages.

Bobby and Fredrick Specify in Their Contract That for Every