A contractor and Southampton, Inc. have a contract, which calls for the contractor to build a building with the completion by June 15. If the building is not completed by that date, the contract calls for the contractor to pay $100 per day in damages. The $100 per day is:
A) punitive damages.
B) nominal damages.
C) liquidated damages.
D) an illegal penalty.

Question

Quizplus · Accepted Answer

Liquidated damages are a predetermined amount of money that must be paid as damages for failure to perform under a contract when the actual damages are uncertain or difficult to quantify. In this case, the $100 per day for not completing the building by the specified date is an example of liquidated damages.

A Contractor and Southampton, Inc