Question

Metro Holdings Inc. contracts to sell a commercial parking garage to New Property LLC. The contract provides that if Metro does not close the deal by a certain date, it must pay the buyer one-half of the value of the property. This provision is not enforceable if it is
a. meant to pay for additional work in the event of damage.
b. a reasonable estimate of the loss on the breach.
c. designed to penalize Metro.
d. intended to quickly provide cash to New Property.

Answer 1

The provision is not enforceable if it is a reasonable estimate of the loss on the breach.

Option - b

Explanation:

There are a few solutions for rupture of agreement, for example, grant of harms, explicit execution, rescission, and restitution. In courts of restricted purview, the fundamental cure is an honor of harms.

Since explicit execution and rescission are evenhanded cures that don't fall inside the purview of the officer courts, they are not canvassed in this instructional exercise.  

The count of compensatory harms relies upon the kind of agreement that was broken and the sort of misfortune that was caused. Some broad rules are:  

Standard measure, The standard proportion of harms is a sum that would permit the no breaching gathering to purchase a substitute for the advantage that would have been gotten if the agreement had been performed.

In situations where the expense of the substitute is theoretical, the no breaching gathering may recoup harms in the measure of the expense caused in playing out that gathering's commitments under the agreement.