Detailed Answer
(a) A liquidated damage clause is a contractual provision
which states the amount of damages that will occur if a party
breaches the contract. The liquidated damage clause is enforceable
if the amount is reasonable in light of the anticipated or actual
harm caused by the breach. Excessive liquidated damages
will not be enforceable in court even if both parties have agreed
in writing. A clause providing for excessive damages is a penalty
and the courts will not enforce a penalty. Materiality does not
impact the enforceability of liquidated damage provisions.