Multiple choice

Gippy contracts with Diljeet to deliver possession of a house under construction within a period of six months; failing which he would pay the monthly rental of Diljeet. The monthly rental payable by Gippy for Diljeet is in the nature of _________.

  1. penalty

  2. liquidated damages

  3. exemplary damages

  4. special damages

Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The amount fixed is considered to be a penalty, if it is not based upon a reasonable calculation of actual loss, but is fixed by a way of punishment and as a threat.