The amount of liquidated damages included in a contract that would be upheld by a court:
A)must be reasonable in light of the inconveniences or lack of feasibility of obtaining an adequate remedy.
B)may be so high as to be punitive to the breaching party.
C)may be regarded as a penalty.
D)All of the above.
E)None of the above.

Question

Quizplus · Accepted Answer

Liquidated damages should be reasonable and proportionate to the actual loss suffered by the non-breaching party. Courts will not enforce liquidated damages clauses that are punitive or act as penalties. Therefore, option B and C are incorrect.

The Amount of Liquidated Damages Included in a Contract That