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Logan Gin Distillery is creating a contract for one of its new suppliers. It is a complicated item that they are ordering and if things go wrong, it would have an extremely negative impact on production, and therefore on revenue. However it is impossible to say what the cost of this would be if things were to go wrong. What type of clause should be included in the contract?
Suggested Answer: C
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DEF must deliver the pasta required by ABC is the correct answer. Specific performance is when the innocent party is rewarded by receiving what was initially negotiated - in this case the delivery of pasta. It's basically a posh way of saying that the court mandates you to do what the contract says. See p. 129 for information on Specific Performance.
38 comments · newest first
SC
Scarlet
11 months ago
What even is a penalty clause? Sounds harsh!
BU
Bulah
11 months ago
I think unliquidated damages might be better, more flexible.
TA
Tamala
12 months ago
Wait, can you really predict damages like that? Seems tricky.
AN
Annice
12 months ago
Totally agree, liquidated damages make sense here!
SO
Sonia
1 year ago
Liquidated damages are usually the way to go for this.
KA
Kayleigh
1 year ago
Service credits seem more related to service agreements rather than product supply, so I don't think that's the right choice either.
RE
Renato
1 year ago
I feel like penalty clauses are generally not enforceable, so that might not be the best option for Logan Gin Distillery.
LE
Leota
1 year ago
I'm not entirely sure, but I think unliquidated damages might apply here since the costs are uncertain.
NA
Nadine
1 year ago
I remember discussing liquidated damages in class, especially when it comes to contracts where the costs of a breach are hard to quantify.
LA
Lashandra
1 year ago
A service credit? I don't think that would really apply here. This seems more like a situation where the company needs some kind of financial protection if the supplier messes up. I'm leaning towards the liquidated damages option.
JO
Joaquin
1 year ago
Hmm, I'm a bit confused on this one. Is a penalty clause the same as liquidated damages? I'll have to review my notes to make sure I understand the differences between the options.
NA
Nada
1 year ago
This seems like a tricky one. I'm not sure if I fully understand the difference between liquidated and unliquidated damages, but I think a liquidated damages clause might be the best option here since the cost of things going wrong is impossible to determine.
LE
Leota
1 year ago
Okay, I think I've got this. Since the potential cost of things going wrong is unknown, a liquidated damages clause would be the way to go. That way, the contract can specify an agreed-upon amount of compensation if the supplier fails to deliver as promised.
AL
Alise
1 year ago
Okay, let me see here. I know it has something to do with Activiti, so I'll need to review my notes on that. Hopefully, the answer is in there somewhere.
FE
Felicidad
1 year ago
Hmm... I'm not totally sure. I know credit card statements reveal a lot, but which specific detail matters most here? Need to read carefully.
CA
Catalina
2 years ago
D) service credit? Really? What is this, a rewards program for bad performance? I'll stick with A) liquidated damages, thank you very much.
AI
Aide
1 year ago
C) penalty clause might be too harsh, liquidated damages seem more reasonable.
TO
Tony
1 year ago
B) unliquidated damages could be risky, better to go with a safer choice.
SH
Shawna
1 year ago
A) liquidated damages are a safer option in case things go wrong.
LA
Lashaunda
2 years ago
Definitely A) liquidated damages. It's the only way to ensure the distillery is properly compensated if things go sideways. Plus, it's a fancy legal term, so it must be the right answer.
DE
Delila
2 years ago
Hmm, I'm leaning towards C) penalty clause. That way, the supplier knows there will be serious consequences if they mess up. Gotta keep them on their toes, you know?
EL
Elvera
1 year ago
D) service credit
CO
Colene
1 year ago
C) penalty clause
KI
King
1 year ago
B) unliquidated damages
KE
Kenny
1 year ago
A) liquidated damages
JO
Josefa
1 year ago
D) service credit
EM
Emmett
1 year ago
C) penalty clause
ST
Stephania
1 year ago
B) unliquidated damages
BR
Britt
1 year ago
A) liquidated damages
VA
Vanda
2 years ago
I'm not sure about this one. I was thinking B) unliquidated damages might be the way to go since the impact is so uncertain. But I could be wrong.
EL
Elouise
2 years ago
I think the answer is A) liquidated damages. This seems like the most appropriate clause to include in the contract since the cost of things going wrong is impossible to predict.
RA
Rachael
1 year ago
That's true, having a clear clause will help protect both parties involved.
MI
Michael
1 year ago
I think B) unliquidated damages might also be a good option to consider.
MA
Marica
1 year ago
It's important to have a clause that specifies the damages in case of any issues.
LE
Leota
2 years ago
I agree, A) liquidated damages would be the best option in this case.
YV
Yvette
2 years ago
I disagree, I think we should go for a penalty clause to deter the supplier from breaching the contract.
FE
Fernanda
2 years ago
I agree with Tracey, having a fixed amount for damages would provide certainty in case of breach.
TR
Tracey
2 years ago
I think we should include a liquidated damages clause in the contract.