An Arizona contract drafter is reviewing a proposed liquidated damages clause. Which proposed requirement is not a typical component of that clause?
Correct Answer
C) A requirement for court approval of the damage amount
Liquidated damages clauses do not require court approval of the damage amount - they are predetermined by the parties. Option A is correct because liquidated damages clauses specify the amount or calculation method. Option B is correct because they define when damages apply. Option D is correct because they include agreement that the damages reasonably compensate for breach.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
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