Multiple choice

If the sum fixed by the parties represents a genuine pre-estimate of the probable damages that is likely to result from the breach, it is

  1. liquidated damages

  2. penalty

  3. special damages

  4. general damages

  5. unliquidated damages
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A Correct answer
Explanation

Liquidated damages are damages whose amount is designated during the formation of a contract for the injured party to collect as compensation upon a specific breach.

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