A contract clause which specifies the amount of damages to be paid in the event of a breach is called
A)a covenant of damages clause.
B)a reliance interest of damages clause.
C)a liquidated damages clause.
D)an incidental damages clause.

Question

Quizplus · Accepted Answer

A liquidated damages clause specifies a predetermined amount of damages to be paid in the event of a breach of contract. This is commonly used in contracts where it would be difficult to quantify the actual damages caused by a breach. A covenant of damages clause and reliance interest of damages clause are not common contractual terms. An incidental damages clause deals with damages that arise incidentally from a breach of contract, such as expenses incurred to remedy the breach.

A Contract Clause Which Specifies the Amount of Damages to Be