Smart Computer Services had a service contract with Johnson College to maintain all of the college computers used for instructional services. The college depended heavily on its computer system being maintained properly at all times. A liquidated damage clause in the contract provided that Smart Computers pay $500 to Johnson College for each day that Smart was late responding to a service call
On October 10, Smart was notified that Johnson College's computer system failed. Smart, however, did not respond to the college's request until October 15 . If Johnson College sues Smart Computer Services under the liquidated damages provision of the contract, Johnson College will
a. win, unless the liquidated damage provision was determined to be a penalty.
b. win because, regardless of the circumstances, the liquidated damages provision is valid.
c. lose, because Smart's breach is only a minor.
d. lose, because the liquidated damages clause in the Smart/Johnson College contract was against public policy.
A
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