Which of the following statements isnottrue of liquidated damages?

A. They must be reasonably related to the damages that may be suffered if the contract is not fulfilled.
B. They may not be designed to serve as a penalty to deter a party from breaching a contract.
C. They are a form of compensatory damages.
D. They may be designed to serve as a penalty to deter a party from breaching a contract.


Answer: D

Legal Studies & Paralegal

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