Reference no: EM133725093

Problem

Joey and Chandler were roommates and they had made a contract with the Keep You Safe Corporation where the corporation would provide a burglar alarm security for Chandler and Joeys' apartment. The contract stated that the maximum liability of the alarm company was the actual loss sustained or $150, whichever was the lesser, and that the provision was agreed to "as liquidated damages and not as a penalty." One day, Joey was trying to sell an entertainment center he made; however, the man declined to purchase it. Three days later, the man ended up breaking into Joey and Chandlers' apartment and stole all their furniture. Chandler called the Keep You Safe Corporation to report the loss, and the corporation reimbursed them for $150. Subsequently, Chandler and Joey sued the Keep You Safe Corporation for the loss of approximately $8,500, claiming that the corporation had been negligent. The corporation claimed that its maximum liability was $150; however, Chandler and Joey claimed that the amount was invalid because it did not bore any relationship to the loss that could have been foreseen when the contract was made or that in fact had been sustained. Answer the following questions. Discuss if Keep You Safe Corporation breached the contract. Discuss the remedy Chandler and Joey were entitled to under the contract.