Question

A commercial building construction company and Sub Shop, Inc. have a contract, which calls for the construction company to build a building with the completion by May 1. If the building is not completed by that date, the contract calls for the construction company to pay $150 per day in damages. The $150 per day is:

Answer 1

Answer:

liquidated damages

Explanation:

Based on the information provided within the question it can be said that the $150 per day is called liquidated damages. This term refers to a set amount of money that both parties agree upon when signing a contract. This money is then paid out by the company being contracted if they breach the contract, such as is the case in this situation by not completing construction by the due date. The amount specified is meant to reflect the damages that the contractor would have to deal with if the contract is not met accordingly.

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