Question

Which of the following is generally true regarding a liquidated damages provision?

A. A provision for liquidated damages is illegal.

B. A provision for liquidated damages is void because of public policy.

C. A provision for liquidated damages is voidable because of public policy.

D. A provision for liquidated damages is enforceable so long as it is not punitive in nature.

E. A provision for liquidated damages will be enforced regardless of whether it is punitive in nature.

Answer

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