Liquidated Damages
/ˈlɪkwɪdeɪtɪd ˈdæmɪdʒɪz/
Definitions
- (n.) Pre-agreed sum payable as compensation for breach of contract when actual damages are difficult to quantify.
The contract specified liquidated damages of $10,000 for each day of delayed performance.
Related terms
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Commentary
Liquidated damages must represent a genuine pre-estimate of loss to be enforceable; otherwise, they may be deemed a penalty and void.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.