Pattaern Inc. enters into a contract to deliver 10,000 units of raw materials to Phobas Inc. Pattaern delivers the raw materials two days after the delivery date. Pattaern offers to pay damages based on a clause in the contract. What type of damages is being paid by Pattaern?

Question

Quizplus · Accepted Answer

Pattaern offering to pay damages based on a clause in the contract suggests that the parties agreed upon a fixed amount of damages that Pattaern would be liable for if they failed to deliver the raw materials on time. Such pre-agreed damages are known as liquidated damages.