liquidated damages

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Related to Liquidated damages clause: Penalty clause

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 ?
It is also advisable to include both liquidated damages clauses and injunctive rights to provide additional defenses against an attack by a brand competitor looking to capitalize on the venue's visibility.
Liquidated damages clauses are often expressed as a percentage of the overall value of the sale or service in question.
by considering that the liquidated damages clause has been terminated simultaneously with the termination of the HMA.
Courts will enforce a liquidated damages clause if the damages are difficult to calculate at the time of signing the lease, even if they are easy to calculate once the breach actually takes place.
But if the amount of actual damages that would probably be suffered by the firm is readily ascertainable when the contract is made, or the amount fixed as liquidated damages is conspicuously disproportionate to the foreseeable loss, the liquidated damages clause will not be enforced; instead, it will be characterized as a penalty (Bates and Central Irrigation Supply).
A contract's price term is thus an implied-in-fact liquidated damages clause that establishes the liquidated amount as an alternative performance.
Include liquidated damages clause in license agreement.
2 ("A party to a contract may enforce a penalty clause or a liquidated damages clause to the extent that it is reasonable in all of the circumstances that the clause should be enforced" at s.
44) A liquidated damages clause must be formulated to compensate the nonbreaching party, rather than to impose a penalty on the would-be breacher.
check] Check for and calculate the expected payout from a reimbursement or liquidated damages clause.
a liquidated damages clause, but this was reversed at the Court of
7) The contract contained a liquidated damages clause providing that if the contractor failed to complete the project on time, then the government would be entitled to damages in the amount of either $4,351 or $200 per day (depending up the line item number) for each day of delay.