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American Protection Industries (API) installed a burglar alarm system for Wehrman’s Jewelry. Burglars broke through a wall from an adjacent store in order to enter and destroyed display cases while removing various pieces of jewelry. Either of these activities should have activated the alarm, but did not. The store owner sued API for $103,461 in stolen jewelry, alleging breach of contract to install a working alarm system. API defended that a liquidated damage provision in the installment contract system was found to be defective.
First, please define a liquidated damages provision. Next which side wins this case and why.
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