Parties to a contract may specify in advance the amount of damages that must be paid in case of breach. These liquidated damages
A)are generally payable in a liquid form (for example oil, or solvents, or alcoholic beverages).
B)are enforceable if they are a penalty designed to frighten parties into performance as agreed.
C)must be reasonable and not a penalty. They reflect the difficulty of assessing the actual or anticipated damages that would be caused by any future breach.
D)are most appropriate when actual damages will be easy to calculate.

Question

Parties to a contract may specify in advance the amount of damages that must be paid in case of breach. These liquidated damages​
A)are generally payable in a liquid form (for example oil, or solvents, or alcoholic beverages).
B)are enforceable if they are a penalty designed to frighten parties into performance as agreed.
C)must be reasonable and not a penalty. They reflect the difficulty of assessing the actual or anticipated damages that would be caused by any future breach.
D)are most appropriate when actual damages will be easy to calculate.

Quizplus · Accepted Answer

Liquidated damages must be a reasonable estimate of the anticipated or actual harm caused by a breach of contract, and they cannot function as a penalty. They are used when it's difficult to calculate actual damages.

Parties to a Contract May Specify in Advance the Amount