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If the compensation to be paid on breach of contract is the genuine pre-estimate of the prospective damages, it is known as:
- a)Special damages
- b)Penalty
- c)Unliquidated damages
- d)Liquidated damages
Correct answer is option 'D'. Can you explain this answer?
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If the compensation to be paid on breach of contract is the genuine pr...
Explanation:
Liquidated damages:
- Liquidated damages refer to the specific sum of money agreed upon by the parties to a contract as the amount of compensation that will be paid in the event of a breach.
- The amount specified as liquidated damages must be a genuine pre-estimate of the loss likely to be suffered as a result of the breach.
- The purpose of including liquidated damages in a contract is to provide certainty and avoid the need for lengthy and costly litigation to determine the amount of damages.
Special damages:
- Special damages, also known as consequential damages, are damages that result indirectly from a breach of contract.
- Unlike liquidated damages, special damages are not predetermined and are usually awarded by a court after considering the specific circumstances of the breach.
Penalty:
- A penalty clause in a contract imposes a punitive sum of money that must be paid in the event of a breach.
- Courts generally disfavor penalty clauses and may strike them down as unenforceable if they are deemed to be excessive or disproportionate to the actual damages suffered.
Unliquidated damages:
- Unliquidated damages refer to damages that have not been predetermined or agreed upon by the parties in the contract.
- In the absence of a liquidated damages clause, unliquidated damages are determined by the court based on the actual loss suffered by the non-breaching party.
In conclusion, liquidated damages are a specific sum of money agreed upon by the parties as the compensation for breach of contract, provided that the sum represents a genuine pre-estimate of the prospective damages.
Liquidated damages:
- Liquidated damages refer to the specific sum of money agreed upon by the parties to a contract as the amount of compensation that will be paid in the event of a breach.
- The amount specified as liquidated damages must be a genuine pre-estimate of the loss likely to be suffered as a result of the breach.
- The purpose of including liquidated damages in a contract is to provide certainty and avoid the need for lengthy and costly litigation to determine the amount of damages.
Special damages:
- Special damages, also known as consequential damages, are damages that result indirectly from a breach of contract.
- Unlike liquidated damages, special damages are not predetermined and are usually awarded by a court after considering the specific circumstances of the breach.
Penalty:
- A penalty clause in a contract imposes a punitive sum of money that must be paid in the event of a breach.
- Courts generally disfavor penalty clauses and may strike them down as unenforceable if they are deemed to be excessive or disproportionate to the actual damages suffered.
Unliquidated damages:
- Unliquidated damages refer to damages that have not been predetermined or agreed upon by the parties in the contract.
- In the absence of a liquidated damages clause, unliquidated damages are determined by the court based on the actual loss suffered by the non-breaching party.
In conclusion, liquidated damages are a specific sum of money agreed upon by the parties as the compensation for breach of contract, provided that the sum represents a genuine pre-estimate of the prospective damages.
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If the compensation to be paid on breach of contract is the genuine pr...
If the compensation to be paid on breach of contract is the genuine pre-estimate of the prospective damages, it is known as Liquidated damages.
Liquidated damages (also referred to as liquidated and ascertained damages) are damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach (e.g., late performance). If the amount fixed by all parties is a genuine estimate of the loss by a future breach of contract, then it is liquidated damages. Thus, all parties to the contract agree that the amount is fair compensation for the breach.
Liquidated damages (also referred to as liquidated and ascertained damages) are damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach (e.g., late performance). If the amount fixed by all parties is a genuine estimate of the loss by a future breach of contract, then it is liquidated damages. Thus, all parties to the contract agree that the amount is fair compensation for the breach.
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If the compensation to be paid on breach of contract is the genuine pre-estimate of the prospective damages, it is known as:a)Special damagesb)Penaltyc)Unliquidated damagesd)Liquidated damagesCorrect answer is option 'D'. Can you explain this answer?
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