Asked by Kaitlynn Whitworth on Jul 08, 2024
Verified
When would the amount of liquidated damages agreed to by both parties in a contract be considered unconscionable?
A) If the amount is reasonable.
B) If the amount of losses was easy to estimate while drafting the contract.
C) If the amount were too small compared to the possible losses.
D) If the amount were too big to be considered penal.
Liquidated Damages
A predetermined amount of money that must be paid as compensation for failure to fulfill a contractual obligation.
Unconscionable
Refers to something that is extremely unfair or unjust, often to the extent that it shocks the conscience.
- Analyze and apply the criteria for determining the enforceability of liquidated damages provisions.
Verified Answer
VK
Visaalashi kalaivananJul 14, 2024
Final Answer :
C
Explanation :
If the amount were too small,say $1,it might be considered unconscionable and therefore not enforceable.
Learning Objectives
- Analyze and apply the criteria for determining the enforceability of liquidated damages provisions.