When Betty Baker's supplier of organic whole rye grain fails to make contracted deliveries to Betty she has to go on a four-day road trip visiting farms in distant counties to line up an adequate substitute source of supply. These expenses may be recouped by Betty as liquidated damages.

Question

Quizplus · Accepted Answer

Liquidated damages are pre-determined damages specified in a contract for breach, not for recouping expenses like those incurred from a road trip to find a substitute supplier.

When Betty Baker's Supplier of Organic Whole Rye Grain Fails