What type of clause should be included in the contract?

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?
A . liquidated damages
B. unliquidated damages
C. penalty clause
D. service credit

Answer: C

Explanation:

Unliquidated damages would be the best to include as there is no way of identifying a figure for liquidated damages. This would be the safest thing for the buyer to do. P.108 – section on Unliqui-dated Damages.