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Under Section 74, where a sum is named in the contract as payable on breach, the aggrieved party is entitled to:
AReasonable compensation not exceeding the sum named
BTwice the actual loss
COnly the actual loss plus interest in every case
DThe whole named sum automatically
Answer & Solution
Correct answer: A. Reasonable compensation not exceeding the sum named
Section 74 allows reasonable compensation not exceeding the stipulated sum, whether the stipulation is a penalty or liquidated damages; the court may award less.
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