Liquidated damages:
A) are only available in some states
B) need not be related to actual losses that could be suffered
C) must be less than the actual losses that could be suffered
D) are usually much higher than the actual losses that could be suffered
E) none of the other choices are correct

Question

Quizplus · Accepted Answer

Liquidated damages are a contractual provision agreed upon by the parties involved, specifying a predetermined amount of money that must be paid as damages in the event of a breach of contract. They are not limited to specific states, must be a reasonable estimation of actual losses (not unrelated, less, or much higher), and are used to provide certainty and avoid litigation over the amount of damages.

Liquidated Damages