1. Review the "ADR Continuum" essay (see Course Content for Week 6). Then, briefly discuss two benefits and drawbacks of using eithermediationorarbitrationto resolve a buyer-sellerdispute under a procurement contract.

2. When referring to liquidated damages as a remedy for a breach, many contracts contain language that states: "...as liquidated damages, and not as a penalty...."

Questions:

• Explain the rationale behind such a reference.
• Provide an example of a liquidated damages formula that would, in your opinion, be a "penalty."