The fact that a party enters into a contract with knowledge of special liability if it fails to perform
A)has a direct effect on the amount of damages that will be awarded against it.
B)has no material effect on the amount of damages that will be awarded against it.
C)has the effect of rendering the contract a nullity in the event of a breach.
D)has a minimal effect on the amount of damages that will be awarded against it.
E)none of the above

Question

Quizplus · Accepted Answer

If a party enters into a contract with knowledge of special liability if it fails to perform, it means that they are aware of the consequences of breaching the contract. This can have a direct effect on the amount of damages that will be awarded against them, as the court may consider their knowledge when calculating damages. For example, if a contractor enters into a contract for construction work with a liquidated damages clause that specifies a daily penalty for delays, and the contractor is aware of this clause but still causes substantial delays, the court may award significant damages based on the contractor's knowledge of the clause.

The Fact That a Party Enters into a Contract with Knowledge