Which of the following is true of liquidated damages?
A) A small amount is awarded by the court to the plaintiff for a breach of contract which causes no financial injury to the plaintiff.
B) Damages awarded by the court arising from unusual losses, which the parties knew would result from breach of contract.
C) Damages awarded by the court to put the plaintiff in the same position as if the contract had been performed.
D) Damages specified in the contract, where real damages for breach of contract are likely to be uncertain.
E) Courts will enforce these "liquidated" damages to penalize the defendant.

Question

Quizplus · Accepted Answer

Where real damages for breach of contract are likely to be uncertain, parties sometimes specify in the contract what the damages should be. Courts will enforce these "liquidated" damages unless they seem to penalize the defendant instead of merely compensating the plaintiff for uncertain losses.

Which of the Following Is True of Liquidated Damages