liquidated damages

Popular Terms
Sum of money (agreed-to and written into a contract) specified as the total amount of compensation an aggrieved party should get, if the other party breaches certain part(s) of the contract. The contract also establishes what actions or failures to act constitute a breach. For the agreement to be legally enforceable, the nature of the contract should be such that it is difficult to determine actual damages, and the amount of damages should be reasonable under the circumstances. Otherwise law may regard the specified amount as a fine (included in the contract primarily to force its proper performance) and not a compensation for injury.
In such cases, the damages are deemed 'unliquidated damages' and are assessed by a court according to the merits of the case.

Use 'liquidated damages' in a Sentence

I was required to receive liquidated damages from the company because I had suffered a great loss at their hand.
17 people found this helpful
The firm was compensated adequately for the accident in the form of liquidated damages so all party's were happy in the end.
15 people found this helpful
The contract for the business partners included liquidated damages to compensate either party should one default on their initial agreement.
14 people found this helpful




Email Print Embed