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  •  Meghraj agrees to pay Rs. 20,000 to Amit on or before January 18, 2022. However, he fails to make payment

 Meghraj agrees to pay Rs. 20,000 to Amit on or before January 18, 2022. However, he fails to make payment of the sum at the stipulated time due to some problem. And he agrees to pay Rs.30,000 as liquidated damages. So, the additional Rs.10,000 is,

Option: 1

A penalty.


Option: 2

A unliquidated damages.


Option: 3

Liquidated damages.


Option: 4

All of the above.


Answers (1)

best_answer

The additional Rs. 10,000 is a penalty because it is extravagant.A penalty clause imposes an exorbitant and punitive financial burden on the party in breach, far exceeding the actual damages incurred. Hence correct option is a.

Posted by

vinayak

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