Specific damages to be paid in case of breach, that the parties agree to in the contract in advance of a breach are called ____ damages:
A) compensatory
B) expectancy
C) liquidated
D) nominal
E) punitive

Question

Quizplus · Accepted Answer

Liquidated damages are specific damages that the parties agree to in advance of a breach. They are predetermined and specified in the contract and account for the estimated losses that the non-breaching party would suffer as a result of the breach. The purpose of liquidated damages is to provide certainty and predictability in the event of a breach, as opposed to leaving the calculation of damages up to a court to determine.

Specific Damages to Be Paid in Case of Breach, That