When a contract names a sum payable upon breach, a court awarding compensation generally considers:
Correct answer: A. Reasonable compensation not exceeding the named sum
- A. Reasonable compensation not exceeding the named sum
- B. The named sum automatically in every case
- C. Only the claimant's personal estimate of loss
- D. Punishment of the breaching party as the main objective
Explanation
Under the Contract Act, the named amount sets an upper limit, while the court awards reasonable compensation according to the circumstances. The stipulated sum is not automatically recoverable merely because it appears in the contract.
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Civil law governs disputes involving private rights, including contracts, property, family relations, torts and compensation. The subject explains breach of duty, civil liability, damages, specific relief, injunctions and other remedies, while distinguishing private claims between individuals from criminal proceedings brought to punish offences against the state.
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