On April 15, Don Construction contracted to build a house for Jessup. The contract price was $55,000.

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On April 15, Don Construction contracted to build a house for Jessup. The contract price was $55,000. The agreement contained a provision stating that the builder would deduct $1,000 a day from the contract price for each day the house was not completed after August 15. It was not completed until September 15. Don Construction refused to deduct $30,000 from the contract price. Jessup refused to sue. Don Construction sued, claiming that the $1,000 a day was a penalty clause, not a liquidated damages clause. What was the result? Explain.


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The Legal Environment of Business A Critical Thinking Approach

ISBN: 978-0132664844

6th Edition

Authors: Nancy K Kubasek, Bartley A Brennan, M Neil Browne

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