Contracts & ExecutionQuestion 177 of 1632
A contract sets liquidated damages of $400 per day for late completion. The contractor finishes 12 days late. Assuming the clause is enforceable, how much may the owner deduct?
a.$400
b.$4,800
c.$1,200
d.$12,000
Explanation
Liquidated damages accrue per day of delay: $400 x 12 days = $4,800. An enforceable clause fixes this amount in advance so actual damages need not be separately proven.
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