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DSST Business Law II Exam Prep

Category - DSST Business Law II

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The Uniform Commercial Code (UCC) permits parties to a sales contract to establish in their sales contract the damages that will be paid upon a breach of contract. Such pre-established damages are referred to as:
  1. Contract damages.
  2. Punitive damages.
  3. Nominal damages.
  4. Liquidated damages.
  5. Actual damages.
Explanation
Answer: D. Such pre-established damages are referred to as liquidated damages. Liquidated damages replace actual damages. However, they must have some relationship to the amount of the loss of the non-breaching party.
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