Copper Conduit,Inc.,and Dependable Electric Company sign an agree-ment that provides for the payment of "$1,000 by whichever party commits a material breach of the contract that creates damages difficult to esti-mate but approximately $1,000." This is
A)a liquidated damages clause.
B)a mitigation-of-damages clause.
C)a waiver-of-breach clause.
D)a penalty clause.

Question

Quizplus · Accepted Answer

The agreement describes a specific amount of damages that will be paid if a material breach of the contract occurs, which is characteristic of a liquidated damages clause.