The parties to a contract may specify a reasonable amount to be paid in the event of a future breach of the contract, which is called______ damages.

A) consequential
B) liquidated
C) punitive
D) compensatory

Liquidated damages are a predetermined form of compensation set at the time of forming a contract, to be paid if one party breaches the contract. This is in contrast to punitive or compensatory damages, which are determined after the breach occurs, and consequential damages, which relate to indirect losses from a breach.