Asked by Kamri Smith on Jun 16, 2024
Verified
Arthur and Brian have entered into a contract with an enforceable liquidated damages provision that states that Ben's recovery will be $10,000 in the event of Arthur's breach.Arthur breaches the contract.Ben loses $50,000 in consequential damages as a result.Ben's recovery is limited to $10,000.
Liquidated Damages
The stipulation by the parties to a contract of the sum of money to be recovered by the aggrieved party in the event of a breach of the contract by the other party.
Consequential Damages
Losses that arise not directly from a breach of contract but as a foreseeable result of the breach, requiring compensation.
- Attain an understanding of how specific performance and liquidated damages provisions are applied in contractual agreements.
Verified Answer
AM
alana martinezJun 17, 2024
Final Answer :
True
Explanation :
When liquidated damages provisions are enforced,the amount of damages agreed on will be the injured party's exclusive damage remedy.Here,the liquidated damages provision makes it possible for Ben to recover only the $10,000 as stated.
Learning Objectives
- Attain an understanding of how specific performance and liquidated damages provisions are applied in contractual agreements.
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