A contract states in advance that a specified reasonable sum will be payable if a...

The provision describes liquidated damages, making B correct. A liquidated-damages clause establishes in advance the amount or measure of damages that will apply if a defined breach occurs. In real estate, earnest-money or deposit provisions can sometimes operate as liquidated-damages mechanisms depending on the language of the agreement and applicable law.

The Massachusetts Board ' s Contract Law curriculum specifically lists liquidated damages among purchase-and-sale default provisions and notes that such damages must be reasonable. That qualification matters because contract law distinguishes an enforceable liquidated-damages provision from an impermissible penalty designed primarily to punish breach.

Specific performance is different. It is an equitable remedy asking the court to require a party to perform the contractual obligation—for example, to complete a unique real-estate conveyance where monetary relief is inadequate. Estoppel prevents a party from taking a position inconsistent with certain prior conduct or representations when the legal requirements are met. “General damages” is a broader remedial concept and does not describe an amount fixed by agreement before breach.

Study Guide Reference: Contracts — default provisions and remedies for breach; liquidated damages and specific performance.