During an Arizona file audit in Coconino County, a broker says a liquidated-damages clause always means the nonbreaching party can recover any larger actual loss later as well. Which statement should the broker communicate?
Correct Answer
B) a true liquidated-damages provision is meant to set the agreed remedy within the clause's scope rather than guarantee unlimited extra recovery
Under Arizona contract law; current AAR contract concepts, a true liquidated-damages provision is meant to set the agreed remedy within the clause's scope rather than guarantee unlimited extra recovery.
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Related Topics & Key Terms
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Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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