Metro Facilities, Inc., contracts to sell a parking lot to Nouveau Property Company. The contract provides that if Metro does no

Question

3 years ago

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Metro Facilities, Inc., contracts to sell a parking lot to Nouveau Property Company. The contract provides that if Metro does no

t close the deal by September 15, it must pay Nouveau one-half of the contract price. This provision is not enforceable because it is

Social Studies

1 answer:

german · Answer 1 · 2022-02-03T21:56:13+03:00

Answer:

A penalty clause is a correct answer to this question.

Explanation:

A penalty clause differs from a clause on liquidated damages by not being tied to an estimate of potential actual damages. A provision stipulating an excessive monetary fee against a principal debtor in an agreement.

Courts usually do not impose such a provision, but may impose liquidated liability provisions when they provide a reasonable estimate of real damages.So penalty clause is the right answer .