Construction company C and landlord L negotiate to build an office building for occupancy on September 1.

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Construction company C and landlord L negotiate to build an office building for occupancy on September 1. Landlord L wants to sign up commercial renters to occupy the building on September 1. Unforeseeable causes often delay construction projects. C is willing to take this risk. C proposes a price of $10 million and a liquidation clause requiring C to pay L $1,500 per day for completing the building late. You are a lawyer hired by L to help on the contract. L tells you in private that he will actually lose $1,000 per day of delay, not $1,500 per day. How would you explain to L that he might benefit from proposing to reduce liquidated damages from $1,500 to $1,000 per day?

Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....
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Law and economics

ISBN: 978-0132540650

6th Edition

Authors: Robert cooter, Thomas ulen

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