Question

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.

Answer 1

A contract clause which specifies the amount of damages to be paid in the event of a breach is called C. a liquidated damages clause.

A contract clause is a specific section that is added into a clause and addresses specific subject matters or topics. These clauses are normally added to make sure each section understands and performs their duties.