Select the best answer choice.

Regarding assigned case Watson v$.$ Ingram, $881$ P$\mathrm{.}2$d $247($Wash$.1994)$:

What does this court mean when it says that liquidated damages clauses allow the parties to "allocate and incorporate the risks $[$of the transaction$]$ in their negotiations"?

It means that the nature of liquidated damages is that they are designated during the formation of a contract.

It means that that parties to consider liquidated damages upon a specified breach while they are negotiating the contract.

It means that the colfract price and terms should reflect that the parties contemplated liquidated damages.

All of these answer choices are correct.