SFX Paintball Games,Inc.,and Truck & Trailer Delivery Corporation 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

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This is a liquidated damages clause because it specifies a predetermined amount of damages to be paid in the event of a material breach that is difficult to estimate. It does not impose a penalty or nominal damages, and it does not aim to mitigate damages.