liquidated damages

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Liquidated damages

The amount payable for delays and sub-standard performance under a construction, equipment supply, or Operations & Maintenance contract.

Liquidated Damages

In some contracts, a set fee that one party must pay the other in cases of breach of contract. The amount of the liquidated damages is stated in the contract and is designed to compensate the grieved party when valuation of the breach would be difficult to ascertain.

liquidated damages

Damages agreed upon in advance by contracting parties.The parties will recite that if one or the other breaches the contract, it will be difficult to determine damages at that time.This is often true in situations where construction is delayed and a business cannot open on time or homeowners cannot take possession of their home when anticipated. Liquidated damages are used in a wide variety of cases, though, not just construction contracts.The parties will agree to an amount of damages, or a method of calculating damages, such as a certain amount per day. Most real estate sale contracts stipulate the earnest money deposit as the amount of liquidated damages.The catch with this system is that courts will not enforce penalties, which are illegal.If the liquidated damages do not bear some relationship to reality and the probable damages suffered by the innocent party, then courts will recharacterize them as penalties (completely unenforceable) or will reduce them to an amount deemed reasonable under the circumstances.

References in periodicals archive ?
The Arkansas general rule pertaining to liquidated damages is that an agreement for liquidated damages in advance of the breach of contract will be enforced if the amount is
The plaintiff sought liquidated damages in the amount of $109,029.
As a result, the court found that this was not the proper situation for the use of a liquidated damage provision.
Defective a performance liquidated damages Dealer~s to him reasons directly attributable to quality requirements of the natural gas violates, pay a defective a performance liquidated damages is obliged to.
Any attorney drafting contracts on a regular basis knows two different client goals for liquidated damages clauses.
Most commonly we associate liquidated damages with delay.
The recent completion of key performance items permanently and irrevocably removes any prospect of liquidated damages being applied to EOS by NMT.
The appellate court held that Luminant was not required to provide transmission capacity for the wind farms to generate power and that the liquidated damages provision requiring the wind farms to pay $50 per megawatt hour for the renewable energy and credits they failed to deliver is enforceable.
The bill also permits landlords to recover liquidated damages or early termination fees if they are provided for in the rental agreement.
In addition to the back wages, the owners of JBL Cal Apparel, Louis and Raymond Wang, also must pay another $59,787 in liquidated damages.
The ruling did not address the employment tax treatment of liquidated damages paid by an employer to an employee as part of a settlement.