Final answer:
The amount stipulated in a contract for damages is often the earnest money deposit, showing a buyer's commitment in a transaction. Deposit insurance via the FDIC protects individual bank deposits up to $250,000, in case the bank goes bankrupt.
Step-by-step explanation:
The term 'Amount of damages stipulated in the contract' often refers to a sum of money specified in a contract that one party will pay to the other in the event of a breach of the contract. In many cases, this is represented by the earnest money deposit, which is a deposit made to a seller indicating the buyer's good faith, seriousness, and genuine interest in the property transaction. It's commonly used in real estate transactions.
Deposit insurance is a separate concept, which provides a safety net for depositors if a bank fails. The Federal Deposit Insurance Corporation (FDIC) ensures that depositors can recover their funds up to a certain limit. Currently, this insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category. This limit was increased from $100,000 to $250,000 in 2008.