Asked by Jimmy Christiansen on Jun 11, 2024
Verified
Bobby and Fredrick specify in their contract that for every day Bobby's construction company does not complete Fredrick's new house, Bobby will deduct $1000. This is known as a ________ damages clause.
A) punitive
B) compensatory
C) nominal
D) consequential
E) liquidated
Liquidated Damages
A predetermined amount of money that must be paid as compensation for failure to fulfill a contract or meet certain conditions.
Punitive Damages
Financial compensation awarded to a plaintiff that goes beyond what is necessary to compensate for losses, intended to punish the defendant for egregious wrongdoing.
- Acquire knowledge about the diverse categories of damages including compensatory, punitive, nominal, liquidated, and consequential, and their implementation in instances of contract violations.
Verified Answer
BJ
Billy J HamiltonJun 13, 2024
Final Answer :
E
Explanation :
A liquidated damages clause specifies a predetermined amount of money that must be paid as damages for failure to perform under a contract. In this case, the $1000 deduction for each day the construction is delayed is an example of liquidated damages.
Learning Objectives
- Acquire knowledge about the diverse categories of damages including compensatory, punitive, nominal, liquidated, and consequential, and their implementation in instances of contract violations.
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