Which of the following best explains 'liquidated damages'?
A) Written guarantee from a third-party guarantor.
B) The contractor guarantees the actual output or outcome of the work to be delivered.
C) Holding company secures payment for agreed sum in case business unit fails to make payments.
D) Sum that will be paid in case the contractor fails to deliver works according to the client's specifications.

Question

Which of the following best explains 'liquidated damages'? 
A) Written guarantee from a third-party guarantor. 
B) The contractor guarantees the actual output or outcome of the work to be delivered. 
C) Holding company secures payment for agreed sum in case business unit fails to make payments. 
D) Sum that will be paid in case the contractor fails to deliver works according to the client's specifications.

Quizplus · Accepted Answer

Liquidated damages refer to a sum of money that will be paid by the contractor in case they fail to deliver works according to the client's specifications. It is a predetermined amount agreed upon by the parties beforehand, and is designed to compensate the client for any losses or damages that may result from the contractor's failure to meet their obligations.

Which of the Following Best Explains 'Liquidated Damages