liquidated damages


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Related to liquidated damages: Unliquidated damages

liquidated damages

A sum specified in a contract whereby damages in the event of breach are to be determined. In a construction contract, liquidated damages usually are specified as a fixed sum per day for failure to complete the work, 1 within a specified time. If set at a level consistent with a reasonable forecast of actual harm to the owner, liquidated damage clauses will be upheld and will preclude use of standards for computation of damages that would otherwise be imposed by law. If the amount prescribed for liquidated damages is unreasonably high, the provision will be denominated an illegal “penalty” by the courts and held invalid; in such case, damages will be determined pursuant to otherwise applicable rules of law.
References in periodicals archive ?
As previously mentioned, it is widely accepted under common law and western jurisdictions, which are commonly employed in maritime contracts, that demurrage, in the context of a voyage charterparty, is a provision for liquidated damages.
While some other areas of the law allow for arbitrarily assigning dollar figures to unquantifiable events, automobile accidents, for example, liquidated damages doctrine insists that there be some nexus between the agreed upon damages and the foreseeable loss.
Commercial factors play a part, and the agreement of a liquidated damages sum may well be the product of negotiation or be reflective of the parties' agreement as to risk allocation.
The duty to mitigate damages, therefore, impacts the amount of avoidable costs that a firm may be able to use to justify the liquidated damages clause-75% in the authors' prior example.
This rule is the subject of considerable academic debate, and some states are in fact more liberal in their approach to liquidated damages than others.
Liquidated damages are available to plaintiffs who demonstrate a violation of the FLSA or a "willful" violation of the ADEA (235) for "an amount equal to the amount deemed to be unpaid [wages or compensation]," (236) though compensatory damages are generally unavailable under these statutes, (237) with certain exceptions.
Therefore, liquidated damages should be a reasonable estimate of actual damages.
Next, in response to Klyap's stop payment, on 26 February 1999 the district filed suit in state court to enforce the liquidated damages clause.
The plaintiff sought liquidated damages in the amount of $109,029.
A common, but sometimes misunderstood, provision in contracts is a liquidated damages clause.
Schleier(1)(*) that section 104(a)(2) of the Internal Revenue Code(2) does not authorize a former United Airlines pilot to exclude from his gross income the amount received in settlement of a claim for back pay and liquidated damages under the Age Discrimination in Employment Act of 1967.