Matt, Who Owned an Appliance Store, Contracted with Stella to Supply

Multiple Choice

Matt, who owned an appliance store, contracted with Stella to supply all the new equipment for Stella's new restaurant. Stella wanted all the equipment by October 15th in order to get the restaurant started in time for the holidays. Matt and Stella entered into an agreement by which Matt would pay Stella $300 per day for every day he was late in providing the appliances. Which of the following is a true statement regarding the section of the agreement involving the late charges?

A) It is known as a liquidated damages provision which will be enforced by a court so long as it is not so far out of reasonable range as to be punitive in nature.
B) It is known as a penalty provision which will be enforced by a court so long as the plaintiff can establish proof of compensatory damages in at least the amount of recovery requested.
C) It is known as a punitive damages provision which will be enforced by a court only if wrongdoing or fraud on the part of the defendant can be established.
D) It is known as a consequential damages provision which will be enforced by a court only if incidental damages can be established.
E) It is known as an invalid provision which will not be enforced.