In exchange for a payment of $6,000, a company agreed to prepare a site on which a contractor was committed to erect a building. The written agreement required the company to be finished on or before a specific date and contained a clause that penalized the company $500 for each day the company was late in meeting this deadline. The company was two days late in meeting the deadline. As a consequence of the delay, the contractor suffered $200 in damages. The contractor paid the company $5,000, and the company sued the contractor to collect the remaining $1,000 of the contract price. How much can the company recover in damages under this contract from the contractor?
Answers:
a. $1,000
b. $800
c. $200
d. $0