Question

Master Mfg., Inc. contracted with Accur Computer Repair Corp. to maintain Master's computer system. A liquidated damages clause in the contract provided that Accur pays $1,000 to Master for each day that Accur was late responding to a service request. On January 12, Accur was notified that Master's computer system failed. Accur did not respond to Master's service request until January 15. If Master sues Accur under the liquidated damage provision of the contract, Master will...

A) Recover $1,000 from Accur
B) Recover $3,000 from Accur
C) Recover $2,000 from Accur
D) Not be entitled to any damages

Answer 1

If Master sues Accur under the liquidated damage provision of the contract, Master will recover $2,000 from Accur.

Step-by-step explanation:

If Master sues Accur under the liquidated damage provision of the contract, Master will recover $2,000 from Accur.

The liquidated damages clause in the contract stated that Accur pays $1,000 to Master for each day that Accur was late in responding to a service request. Accur was notified on January 12 and did not respond until January 15, which is a delay of 3 days. Therefore, Master can recover $1,000 for each day of delay, totaling $2,000.

The correct answer is C) Recover $2,000 from Accur.