A contract has a clause for liquidated damages for breach of contract by one party.
Which of the following statements is correct?
If the innocent party has suffered no loss, then the liquidated damages clause is a penalty clause and is,
therefore, unenforceable.
If the actual loss suffered by the innocent party from the breach is substantially less than the liquidated
damages, the innocent party may only recover the actual loss.
If the contract calls the clause "a penalty clause", the clause will not be enforceable.
A liquidated damages clause is enforceable regardless of whether, or how much loss, the innocent party has
suffered from the breach.