Under what circumstances will a liquidated damages provision be upheld by a court?

Question

Quizplus · Accepted Answer

The Answer is A liquidated damages provision will be upheld by a court only if the actual damages incurred by a party are difficult to calculate and thus a reasonable agreed-upon sum has been arrived at in the contract. If a contract for sale and purchase gives the nonbreaching party the option of recovering liquidated damages for bringing suit for monetary damages, the liquidated damages provision will not be upheld.

Under What Circumstances Will a Liquidated Damages Provision Be Upheld