American Protection Industries 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 installation contract limited its liability to $250 for any loss if the system failed to operate due to API's negligence. API's system was found to be defective. Who wins and why?