liquidated damages clause
- liquidated damages clause
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USA
A contractual provision requiring a party in breach to pay a pre-determined amount to the other party as compensation for the breaching party's failure to perform a specific task or comply with a particular duty or obligation. Parties typically negotiate a liquidated damages provision into a contract where it may be difficult to either:
• Determine the actual value of services to be performed.
• Estimate the damages that a non-breaching party may suffer if a specific term is breached.
See also
Practical Law Dictionary. Glossary of UK, US and international legal terms.
www.practicallaw.com.
2010.
Look at other dictionaries:
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