Bar Exam (Uniform) Quiz: Provision Revision

20 questions · exam conditions

0:00

Provision RevisionQuestion 1 of 20

You are representing a concert promoter. In light of recent global events, the promoter wants to ensure its standard performance contract includes a force majeure clause that would excuse its obligation to pay the artist if a concert must be canceled due to a government-ordered shutdown or a public health crisis. The current contract has this clause:

Original Provision: "Performance may be excused if rendered impossible by an Act of God, such as a hurricane, earthquake, or flood."

Which of the following revisions would best achieve the client's objective? Select one.

Revise to state: "Performance may be excused if rendered impossible by any event outside the reasonable control of the promoter, including but not limited to Acts of God, war, riot, terrorism, epidemic, pandemic, or any law, order, or regulation issued by a governmental authority."

Revise to state: "Performance may be excused for any reason whatsoever, provided the promoter gives the artist at least 24 hours' notice of cancellation."

Revise to state: "Performance may be excused if rendered impossible by an Act of God, war, or riot. The unforeseeability of such an event is a required element for this clause to be invoked."

Revise to state: "Performance may be excused if rendered commercially impracticable. In such an event, the promoter will refund the artist's deposit but will not be liable for any other damages."

← Back to quizzes

Bar Exam (Uniform) Quiz

Bar Exam (Uniform) Quiz: Provision Revision

Practice Provision Revision in Bar Exam (Uniform) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Provision Revision, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Uniform).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

Original Provision: "Performance may be excused if rendered impossible by an Act of God, such as a hurricane, earthquake, or flood."

Which of the following revisions would best achieve the client's objective? Select one.

Revise to state: "Performance may be excused if rendered impossible by any event outside the reasonable control of the promoter, including but not limited to Acts of God, war, riot, terrorism, epidemic, pandemic, or any law, order, or regulation issued by a governmental authority." (correct answer)
Revise to state: "Performance may be excused for any reason whatsoever, provided the promoter gives the artist at least 24 hours' notice of cancellation."
Revise to state: "Performance may be excused if rendered impossible by an Act of God, war, or riot. The unforeseeability of such an event is a required element for this clause to be invoked."
Revise to state: "Performance may be excused if rendered commercially impracticable. In such an event, the promoter will refund the artist's deposit but will not be liable for any other damages."

Explanation: The correct answer is A. The original clause is too narrow, as "Act of God" is often interpreted to exclude human-caused events or government actions. Revision A specifically adds the key terms the client is concerned about ("pandemic," "epidemic," "government order") while also using broad catch-all language ("any event outside the reasonable control"). Choice B is a termination for convenience clause, not a force majeure clause, and is likely too one-sided to be acceptable. Choice C adds a requirement of unforeseeability, which could make it harder to invoke the clause for a second-wave pandemic or a foreseeable government order. Choice D introduces the vague standard of "commercially impracticable," which is harder to prove than the objective triggers in A.

Question 2

You are general counsel for a developer of a high-end residential subdivision. The developer wants to include a restrictive covenant in the deeds for all lots to maintain a consistent architectural aesthetic. The specific goal is to control the exterior colors of the homes. The developer's initial draft includes this language:

Original Provision: "No home within the subdivision shall be painted in a color that is offensive or not in harmony with the surrounding homes."

Which of the following revisions would create the most legally enforceable and effective restriction to achieve the developer's goal? Select one.

Revise to state: "All exterior colors must be from a palette of 'earth tones.' Bright or garish colors are strictly prohibited."
Revise to state: "No exterior painting shall be undertaken without the prior written approval of the Architectural Control Committee (ACC). The ACC may approve or disapprove any proposed color in its sole and absolute discretion."
Revise to state: "Homeowners agree that the developer, or its assigns, shall have a permanent and irrevocable right to veto any exterior color choice."
Revise to state: "All exterior colors must be selected from a list of pre-approved colors attached as Exhibit A to these Covenants, or be otherwise submitted to and approved in writing by the Architectural Control Committee (ACC), which shall not unreasonably withhold its approval." (correct answer)

Explanation: When evaluating restrictive covenants, courts apply two key tests: the restriction must have a clear, objective standard that can be enforced, and it must be reasonable in scope and application. Vague or overly broad restrictions are typically struck down as unenforceable. Answer D creates the most enforceable restriction because it provides both specificity and flexibility. The pre-approved color list gives homeowners clear guidance about what's automatically acceptable, while the ACC approval process offers a safety valve for other colors with an objective standard—the committee cannot "unreasonably" withhold approval. This balanced approach satisfies judicial preferences for restrictions that are both definite and fair. Answer A fails because terms like "earth tones" and "garish colors" are subjective and undefined. Courts regularly invalidate covenants with such vague language because reasonable people could disagree about what constitutes an "earth tone." Answer B grants the ACC unlimited discretion with no standards whatsoever. Courts disfavor "sole and absolute discretion" clauses as they can lead to arbitrary or discriminatory enforcement. Answer C is problematic because it grants control to the developer indefinitely, even after they've sold all lots and left the community. This creates an unworkable long-term enforcement mechanism and may violate the rule against perpetuities. Study tip: For restrictive covenant questions, look for the answer that balances specificity with reasonableness. Avoid options with purely subjective standards ("offensive," "garish") or unlimited discretion clauses. The best restrictions provide clear guidance while including reasonable approval processes with objective standards.

Question 3

You represent a client who owns a valuable parcel of undeveloped land. He wants to grant his long-time neighbor a right of first refusal (ROFR) to purchase the land if he ever decides to sell. The client's goal is to create a clear, enforceable process that does not unduly cloud the title or violate the Rule Against Perpetuities. The initial draft contains this provision:

Original Provision: "If the Owner ever decides to sell the Property, the Neighbor shall have the first right to purchase it on mutually agreeable terms."

Which revision best achieves the client's goal of creating a clear and enforceable ROFR? Select one.

Revise to state: "The Neighbor shall have a fixed-price option to purchase the Property for $500,000 at any time within the next 21 years."
Revise to state: "For the duration of the Neighbor's life, if the Owner receives a bona fide third-party offer to purchase the Property that he is willing to accept, Owner must first offer the Property to Neighbor on the same terms and conditions. Neighbor shall have 15 days to accept." (correct answer)
Revise to state: "If the Owner decides to sell the Property, the Neighbor may purchase it at a price equivalent to its then-current fair market value as determined by the Neighbor's chosen appraiser."
Revise to state: "The Owner shall not sell the Property to any third party without first obtaining the Neighbor's written consent, which the Neighbor can provide or withhold in his sole discretion."

Explanation: The correct answer is B. This revision creates a clear, workable process for a ROFR. It specifies the trigger (a bona fide third-party offer), the terms (matching the offer), and a clear timeline for exercise (15 days). By limiting the duration to the neighbor's life, it avoids violating the Rule Against Perpetuities. Choice A creates a fixed-price option, not a ROFR, and may not reflect future market value. Choice C is problematic because it allows the Neighbor to choose the appraiser, creating a conflict of interest. Choice D creates an unreasonable restraint on alienation by giving the neighbor an absolute veto, which is likely unenforceable.

Question 4

Your client is selling a 50-year-old commercial warehouse. The client has limited knowledge of the property's history and wants to minimize post-sale liability for its physical condition. The goal is to create a strong "as is" clause that will be upheld by courts. The purchase agreement currently states:

Original Provision: "The Buyer agrees to purchase the Property in its current 'as is' condition."

Which of the following revisions would most effectively limit the seller's liability regarding the property's condition? Select one.

Revise to state: "The Property is sold 'as is.' The Seller shall not be liable for any claims whatsoever, including claims of fraud or intentional misrepresentation regarding the property's condition."
Revise to state: "The Property is sold in its 'as is, where is' condition. The Seller makes no warranties, express or implied, regarding the condition of the Property."
Revise to state: "The Property is sold 'as is, where is, and with all faults.' Seller expressly disclaims all warranties, express or implied. Buyer acknowledges it has had an opportunity to inspect the Property and is not relying on any statements or representations made by Seller or its agents." (correct answer)
Revise to state: "The Buyer assumes all risk for the Property's condition. The Seller guarantees that the roof and foundation are free of any known defects."

Explanation: The correct answer is C. This is the most comprehensive and legally robust "as is" clause. It uses standard legal terms ("with all faults"), explicitly disclaims all warranties, and critically, includes an acknowledgement of the buyer's inspection and non-reliance. This non-reliance language is key to defeating future claims that the buyer was misled. Choice A attempts to disclaim liability for fraud, which is against public policy and unenforceable. Choice B is better than the original but lacks the crucial non-reliance language. Choice D is contradictory; it claims to be an as-is sale while simultaneously creating an express warranty about the roof and foundation.

Question 5

Original Provision: "No home within the subdivision shall be painted in a color that is offensive or not in harmony with the surrounding homes."

Which of the following revisions would create the most legally enforceable and effective restriction to achieve the developer's goal? Select one.

Revise to state: "All exterior colors must be from a palette of 'earth tones.' Bright or garish colors are strictly prohibited."
Revise to state: "No exterior painting shall be undertaken without the prior written approval of the Architectural Control Committee (ACC). The ACC may approve or disapprove any proposed color in its sole and absolute discretion."
Revise to state: "Homeowners agree that the developer, or its assigns, shall have a permanent and irrevocable right to veto any exterior color choice."
Revise to state: "All exterior colors must be selected from a list of pre-approved colors attached as Exhibit A to these Covenants, or be otherwise submitted to and approved in writing by the Architectural Control Committee (ACC), which shall not unreasonably withhold its approval." (correct answer)

Question 6

Your client, a tech startup, wants to include a non-compete clause in the employment agreement for its chief software architect. The client's goal is to prevent the architect from immediately taking her knowledge of their proprietary code to a direct competitor, while ensuring the clause is narrow enough to be enforceable. The proposed clause reads:

Original Provision: "For a period of five years after the termination of employment, Employee shall not, directly or indirectly, work for any company in the software industry anywhere in the world."

Which of the following revisions would most improve the likelihood of the clause being enforced by a court? Select one.

Revise to state: "For a period of 18 months after termination, Employee shall not perform software architecture services for any company whose primary business is developing competing database management software within North America." (correct answer)
Revise to state: "For a period of five years after termination, Employee shall not perform software architecture services for any company whose primary business is developing competing database management software within the same state."
Revise to state: "For a period of 18 months after termination, Employee shall not work in any capacity for any company in the technology sector, including hardware and software, anywhere in the world."
Revise to state: "Employee agrees that the restriction not to work for any company in the software industry worldwide for five years is reasonable and necessary to protect the Company's legitimate business interests."

Explanation: The correct answer is A. Courts require non-compete agreements to be reasonable in duration, geographic scope, and the scope of restricted activity. The original clause is grossly overbroad on all three fronts. Choice A narrows all three elements to a more reasonable level: a shorter duration (18 months), a more limited geographic scope (North America), and a specific activity (software architecture for direct competitors). Choices B and C each fix one element but leave another grossly overbroad (B has an unreasonable 5-year duration; C has a worldwide scope and covers the entire tech sector). Choice D simply adds a conclusory statement of reasonableness, which does not cure the substantive overbreadth of the clause.

Question 7

Your client, a specialty software company, is entering into a critical licensing agreement with a large, publicly-traded corporation. A key concern for your client is that the corporation could be acquired by one of your client's direct competitors, who would then gain access to the licensed software. The client wants to prevent this. The draft agreement has a standard anti-assignment clause:

Original Provision: "Neither party may assign this Agreement or any of its rights hereunder without the prior written consent of the other party."

Which revision would best protect your client from having the license effectively transferred to a competitor through a corporate acquisition? Select one.

Revise to state: "This Agreement is personal to the parties and may not be assigned under any circumstances, and any attempted assignment shall be void."
Revise to state: "Neither party may assign this Agreement without the other's prior written consent, such consent not to be unreasonably withheld."
Revise to state: "Neither party may assign this Agreement, voluntarily or by operation of law, without the other's consent. A change of control of the licensee corporation shall be deemed an assignment for purposes of this clause." (correct answer)
Revise to state: "The licensee corporation agrees that it will not merge with or be acquired by any company listed as a competitor on Exhibit A to this Agreement."

Explanation: The correct answer is C. The original provision might not be triggered by a merger or acquisition, which can be considered a transfer "by operation of law" rather than a voluntary assignment. Revision C closes this loophole by explicitly stating that a "change of control" is deemed an assignment, thus triggering the consent requirement. Choice A is too rigid and may be seen as an unreasonable restraint. Choice B weakens the clause by adding the "not to be unreasonably withheld" standard without addressing the change of control issue. Choice D is a "no-merger" promise, which is an extraordinary restriction on a public company's corporate activity that it would almost certainly reject; C is a more standard and achievable solution.

Question 8

You represent an author who is granting a publisher the exclusive right to distribute her new book. In return, the publisher has agreed to promote the book. The author is concerned that the publisher might do the bare minimum, so she wants a contractual provision that creates a clear, enforceable obligation to market the book effectively. The draft agreement states:

Original Provision: "The Publisher agrees to use its best efforts to market and promote the Book."

Which revision would best address the author's concern by creating a more objective and enforceable obligation? Select one.

Revise to state: "The Publisher agrees to use its good faith, commercially reasonable, and diligent best efforts to market and promote the Book throughout the Territory."
Revise to state: "The Publisher shall market the Book in a manner consistent with its marketing of other books by authors of similar stature."
Revise to state: "The Publisher warrants and represents that its marketing efforts will result in the sale of at least 20,000 copies of the Book within the first 12 months of publication."
Revise to state: "The Publisher commits to spend a minimum of $50,000 on marketing activities for the Book in the first year, including securing at least three paid media placements and sending review copies to at least 100 industry reviewers." (correct answer)

Explanation: When you encounter contract drafting questions about performance obligations, focus on the distinction between subjective standards (which are hard to enforce) and objective, measurable standards (which create clear legal obligations). Vague language like "best efforts" gives courts little guidance and makes enforcement difficult. Why D is correct: This option transforms a subjective obligation into concrete, measurable requirements. By specifying a minimum spending amount ($50,000), a specific number of media placements (three), and review copies (100), it creates objective benchmarks that can be easily verified and enforced. A court can determine whether the publisher met these specific obligations without having to interpret subjective concepts like "best efforts." Why the other options fail: Option A simply adds more subjective language ("good faith," "commercially reasonable," "diligent") without creating measurable standards—it's still essentially unenforceable. Option B creates a comparative standard that's difficult to measure since determining "authors of similar stature" and comparing marketing efforts remains subjective and hard to prove. Option C focuses on results (sales numbers) rather than the publisher's efforts, which could be affected by factors beyond the publisher's control, like market conditions or the book's quality. Study tip: In contract drafting questions, always favor provisions with specific, measurable obligations over those using subjective language. Look for concrete numbers, deadlines, and verifiable actions rather than terms like "reasonable," "best efforts," or "good faith" when the goal is enforceability.

Question 9

Your client, a manufacturing company, is engaging a consultant to help improve its production process. The client will be sharing highly sensitive trade secrets. The client needs a confidentiality clause that provides robust protection but is also professionally standard and enforceable. The consultant has proposed the following:

Original Provision: "Consultant agrees to keep all information learned from the Company strictly confidential forever."

Which of the following revisions would best serve the client's legal and business objectives? Select one.

Revise to state: "Consultant agrees not to disclose any information, except that which is already public knowledge, that is compelled for disclosure by law, or that was independently developed by Consultant without use of Company's information."
Revise to state: "Consultant agrees that any disclosure of Company information shall result in liquidated damages of $1 million, which is agreed to be a penalty for breach."
Revise to state: "Consultant agrees not to disclose any information designated in writing as 'Confidential' by the Company. This obligation shall survive for five years after the termination of this agreement. This does not apply to information that becomes public knowledge through no fault of Consultant or is required to be disclosed by court order." (correct answer)
Revise to state: "Consultant agrees that any and all information is the sole property of the Company and may not be used for any purpose. This obligation is binding on the Consultant's heirs and assigns in perpetuity."

Explanation: The correct answer is C. This provision is superior because it defines what constitutes confidential information (that which is marked as such), sets a clear duration for the obligation, and includes standard, necessary exceptions (carve-outs) for publicly available information and legally compelled disclosure. This balance makes it strong yet enforceable. Choice A provides carve-outs but fails to define what information is confidential or set a duration. Choice B adds a damages clause that is explicitly an unenforceable penalty. Choice D is overbroad, lacks standard carve-outs, and may be difficult to enforce in perpetuity for all information, as opposed to just trade secrets.

Question 10

Original Provision: "Consultant agrees to keep all information learned from the Company strictly confidential forever."

Which of the following revisions would best serve the client's legal and business objectives? Select one.

Revise to state: "Consultant agrees not to disclose any information, except that which is already public knowledge, that is compelled for disclosure by law, or that was independently developed by Consultant without use of Company's information."
Revise to state: "Consultant agrees that any disclosure of Company information shall result in liquidated damages of $1 million, which is agreed to be a penalty for breach."
Revise to state: "Consultant agrees not to disclose any information designated in writing as 'Confidential' by the Company. This obligation shall survive for five years after the termination of this agreement. This does not apply to information that becomes public knowledge through no fault of Consultant or is required to be disclosed by court order." (correct answer)
Revise to state: "Consultant agrees that any and all information is the sole property of the Company and may not be used for any purpose. This obligation is binding on the Consultant's heirs and assigns in perpetuity."

Question 11

You represent a landowner who has agreed to grant an access easement to her neighbor. The client wants to ensure the easement is used only for access to the neighbor's single-family home and does not grant the neighbor exclusive control over the easement area. The current draft proposes this language:

Original Provision: "Grantor hereby grants to Grantee a perpetual easement for ingress and egress over the western 20 feet of Grantor's property."

Which of the following revisions would best protect the client's interests as described? Select one.

Revise to state: "Grantor hereby grants to Grantee an exclusive and perpetual easement for any and all purposes over the western 20 feet of Grantor's property."
Revise to state: "Grantor hereby grants to Grantee a non-exclusive easement over the western 20 feet of Grantor's property, for the sole purpose of ingress and egress to serve the single-family residence on Grantee's adjoining parcel." (correct answer)
Revise to state: "Grantor hereby grants to Grantee a temporary license, revocable at will by Grantor, for ingress and egress over the western 20 feet of Grantor's property."
Revise to state: "Grantor hereby grants to Grantee an easement for ingress and egress over the western 20 feet of Grantor's property, provided Grantee pays an annual fee of $500."

Explanation: The correct answer is B. It achieves both of the client's goals by specifying that the easement is "non-exclusive" (meaning the client can also use the area) and limiting its purpose to ingress and egress for the neighbor's single-family home. Choice A is directly contrary to the client's interests, making the easement exclusive and for all purposes. Choice C changes the permanent property right (an easement) into a temporary, revocable one (a license), which is not what the parties agreed to. Choice D adds a fee but fails to address the client's primary concerns about exclusivity and scope of use.

Question 12

Original Provision: "The Buyer agrees to purchase the Property in its current 'as is' condition."

Which of the following revisions would most effectively limit the seller's liability regarding the property's condition? Select one.

Revise to state: "The Property is sold 'as is.' The Seller shall not be liable for any claims whatsoever, including claims of fraud or intentional misrepresentation regarding the property's condition."
Revise to state: "The Property is sold in its 'as is, where is' condition. The Seller makes no warranties, express or implied, regarding the condition of the Property."
Revise to state: "The Property is sold 'as is, where is, and with all faults.' Seller expressly disclaims all warranties, express or implied. Buyer acknowledges it has had an opportunity to inspect the Property and is not relying on any statements or representations made by Seller or its agents." (correct answer)
Revise to state: "The Buyer assumes all risk for the Property's condition. The Seller guarantees that the roof and foundation are free of any known defects."

Question 13

Original Provision: "Performance may be excused if rendered impossible by an Act of God, such as a hurricane, earthquake, or flood."

Which of the following revisions would best achieve the client's objective? Select one.

Revise to state: "Performance may be excused if rendered impossible by any event outside the reasonable control of the promoter, including but not limited to Acts of God, war, riot, terrorism, epidemic, pandemic, or any law, order, or regulation issued by a governmental authority." (correct answer)
Revise to state: "Performance may be excused for any reason whatsoever, provided the promoter gives the artist at least 24 hours' notice of cancellation."
Revise to state: "Performance may be excused if rendered impossible by an Act of God, war, or riot. The unforeseeability of such an event is a required element for this clause to be invoked."
Revise to state: "Performance may be excused if rendered commercially impracticable. In such an event, the promoter will refund the artist's deposit but will not be liable for any other damages."

Question 14

Which of the following revisions would most improve the likelihood of the clause being enforced by a court? Select one.

Revise to state: "For a period of 18 months after termination, Employee shall not perform software architecture services for any company whose primary business is developing competing database management software within North America." (correct answer)
Revise to state: "For a period of five years after termination, Employee shall not perform software architecture services for any company whose primary business is developing competing database management software within the same state."
Revise to state: "For a period of 18 months after termination, Employee shall not work in any capacity for any company in the technology sector, including hardware and software, anywhere in the world."
Revise to state: "Employee agrees that the restriction not to work for any company in the software industry worldwide for five years is reasonable and necessary to protect the Company's legitimate business interests."

Question 15

Original Provision: "The Publisher agrees to use its best efforts to market and promote the Book."

Which revision would best address the author's concern by creating a more objective and enforceable obligation? Select one.

Revise to state: "The Publisher agrees to use its good faith, commercially reasonable, and diligent best efforts to market and promote the Book throughout the Territory."
Revise to state: "The Publisher shall market the Book in a manner consistent with its marketing of other books by authors of similar stature."
Revise to state: "The Publisher warrants and represents that its marketing efforts will result in the sale of at least 20,000 copies of the Book within the first 12 months of publication."
Revise to state: "The Publisher commits to spend a minimum of $50,000 on marketing activities for the Book in the first year, including securing at least three paid media placements and sending review copies to at least 100 industry reviewers." (correct answer)

Question 16

Original Provision: "If the Owner ever decides to sell the Property, the Neighbor shall have the first right to purchase it on mutually agreeable terms."

Which revision best achieves the client's goal of creating a clear and enforceable ROFR? Select one.

Revise to state: "The Neighbor shall have a fixed-price option to purchase the Property for $500,000 at any time within the next 21 years."
Revise to state: "For the duration of the Neighbor's life, if the Owner receives a bona fide third-party offer to purchase the Property that he is willing to accept, Owner must first offer the Property to Neighbor on the same terms and conditions. Neighbor shall have 15 days to accept." (correct answer)
Revise to state: "If the Owner decides to sell the Property, the Neighbor may purchase it at a price equivalent to its then-current fair market value as determined by the Neighbor's chosen appraiser."
Revise to state: "The Owner shall not sell the Property to any third party without first obtaining the Neighbor's written consent, which the Neighbor can provide or withhold in his sole discretion."

Question 17

Original Provision: "Neither party may assign this Agreement or any of its rights hereunder without the prior written consent of the other party."

Which revision would best protect your client from having the license effectively transferred to a competitor through a corporate acquisition? Select one.

Revise to state: "This Agreement is personal to the parties and may not be assigned under any circumstances, and any attempted assignment shall be void."
Revise to state: "Neither party may assign this Agreement without the other's prior written consent, such consent not to be unreasonably withheld."
Revise to state: "Neither party may assign this Agreement, voluntarily or by operation of law, without the other's consent. A change of control of the licensee corporation shall be deemed an assignment for purposes of this clause." (correct answer)
Revise to state: "The licensee corporation agrees that it will not merge with or be acquired by any company listed as a competitor on Exhibit A to this Agreement."

Question 18

You are representing a construction company that is negotiating a contract to build an office building. The client wants to include a liquidated damages clause for delays caused by the company. The client's goal is to have an enforceable provision that reasonably compensates the owner for delays without being deemed an unenforceable penalty. The initial draft contains the following clause:

Original Provision: "In the event of a delay in project completion attributable to the Contractor, the Contractor shall pay the Owner a penalty of $5,000 for each day of delay."

Which of the following revisions to the provision would best achieve the client's goal of creating an enforceable liquidated damages clause? Select one.

Revise to state: "Contractor shall pay Owner liquidated damages of $5,000 for each day of delay. This amount is punitive and intended to ensure timely performance."
Revise to state: "Contractor shall be liable for any and all actual and consequential damages resulting from any delay, the amount of which will be proven at trial."
Revise to state: "The parties agree that damages from delay are difficult to ascertain. Therefore, Contractor shall pay Owner $5,000 per day of delay as liquidated damages, which the parties agree is a reasonable forecast of actual damages and not a penalty." (correct answer)
Revise to state: "In the event of a delay, Contractor shall pay Owner a fee, not to exceed $5,000 per day, in an amount to be determined by the Owner in its sole discretion based on the harm suffered."

Explanation: The correct answer is C because it addresses the two key requirements for an enforceable liquidated damages clause: (1) that actual damages are difficult to calculate at the time of contracting, and (2) that the specified amount is a reasonable forecast of the potential damages. Using the term "penalty," as in the original and in choice A, is likely to render the clause unenforceable. Choice B removes the liquidated damages concept entirely, defeating the client's goal of pre-agreed damages. Choice D is too uncertain and gives one party sole discretion, making it likely unenforceable.

Question 19

Original Provision: "In the event of a delay in project completion attributable to the Contractor, the Contractor shall pay the Owner a penalty of $5,000 for each day of delay."

Which of the following revisions to the provision would best achieve the client's goal of creating an enforceable liquidated damages clause? Select one.

Revise to state: "Contractor shall pay Owner liquidated damages of $5,000 for each day of delay. This amount is punitive and intended to ensure timely performance."
Revise to state: "Contractor shall be liable for any and all actual and consequential damages resulting from any delay, the amount of which will be proven at trial."
Revise to state: "The parties agree that damages from delay are difficult to ascertain. Therefore, Contractor shall pay Owner $5,000 per day of delay as liquidated damages, which the parties agree is a reasonable forecast of actual damages and not a penalty." (correct answer)
Revise to state: "In the event of a delay, Contractor shall pay Owner a fee, not to exceed $5,000 per day, in an amount to be determined by the Owner in its sole discretion based on the harm suffered."

Question 20

Original Provision: "Grantor hereby grants to Grantee a perpetual easement for ingress and egress over the western 20 feet of Grantor's property."

Which of the following revisions would best protect the client's interests as described? Select one.

Revise to state: "Grantor hereby grants to Grantee an exclusive and perpetual easement for any and all purposes over the western 20 feet of Grantor's property."
Revise to state: "Grantor hereby grants to Grantee a non-exclusive easement over the western 20 feet of Grantor's property, for the sole purpose of ingress and egress to serve the single-family residence on Grantee's adjoining parcel." (correct answer)
Revise to state: "Grantor hereby grants to Grantee a temporary license, revocable at will by Grantor, for ingress and egress over the western 20 feet of Grantor's property."
Revise to state: "Grantor hereby grants to Grantee an easement for ingress and egress over the western 20 feet of Grantor's property, provided Grantee pays an annual fee of $500."