Word formation
Change the word in brackets so that they make sense in
the sentences. You may need to make some
words negative. Be careful: one word does not need to be changed.
1.
At the time of
___________ (contract),parties to an ____________ (agree) often want to calculate
the damages one or both would incur upon breach of contract by the other.
2.
By stipulating such
damages before a breach, the _________ (injure)party can avoid the ____________
(substance)costs which often arise and the ____________ (difficult) of proving the
amount of its loss.
3.
Such clauses, when
___________ (reason) designed to compensate a party for its __________ (injure)
caused by a breach, are ___________ (enforce)
4.
On occasion, a
___________ (contract) party may attempt to ensure that the other party will perform
its promise by inserting a clause which imposes a ____________ (consider)
penalty for __________ (perform).
5.
A penalty ____________
(provide) is not intended to compensate the injured party for the expected loss
____________ (occasion) by the breach.
6.
A contractual penalty
clause is intended as a _____________ (deter) against a breach by specifying
damages which the parties know would
probably be much higher than could otherwise ___________ (ordinary) be recovered
by the ____________ (breach) party.
7.
A contractual penalty
for breach is ____________ (enforce) in many jurisdictions. A court may require
the ___________ (injure) party to prove its loss in accordance with general
principles _____________ (apply) to damages for breach of contract.
8.
___________
(consequence), Knowing the _____________ (distinct) between a provision for a
penalty and for liquidated damages when drafting a damages clause may be
critical to __________(enforce).
9.
The parties intended to
__________ (quantity the damages in advance of the __________ (lose)
10.
The amount
__________ (stipulate) in the provision
is ____________ (reason) in that it not greatly _____________(proportion) to
the presumed ____________ (injure) or loss.
11.
Elements a (and c)
are____________ (appear) __________(contradict).
12.
More recent decisions
have giver little or no ___________ (weigh) to the second element, i.e, the
subjective __________ (intend) of the parties.
13.
Rather, they take all
three elements into account, along with other facts, such as the ___________
(relate) ____________ (bargain) power of the parties, in determining the
____________ (reasonable) of the clause at issue.
14.
____________ (custom),
courts look to the time of contract to decide the reasonableness of stipulated
damages.
15.
It would be difficult
for the ____________ (breach) party to argue that the amount _________ (forecast)
in the liquidated damages clause was ___________ (reason).
16.
The Uniform Commercial
Code accepts a liquidated- damages clause if the amount stipulated was reasonable
___________ (consider) the actual loss.
