liquidated damages

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Related to Liquidated damages clause: Penalty clause

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 ?
Although there are any number of breaches that can give rise either to a penalty clause or a liquidated damages clause, the two most common categories of tenant misconduct are: when the tenant leaves too early--when the tenant abandons the tenancy; and when the tenant stays too long--when the tenant holds over after the natural conclusion of the lease.
even if a damages clause is not a liquidated damages clause in the
There exists no uniform approach to distinguish a liquidated damages clause from a penalty clause.
A "time is of the essence clause"--In contracts where the liquidated damages clause is invalid, the courts will allow an owner to invoke this clause to recover damages, provided the property owner can demonstrate an accurate calculation of consequential damages.
Owners seeking consequential damages in those situations when the contractor does complete the project, but not within the specified schedule, can and should protect their interests using a traditional liquidated damages clause.
As a result of the issuance of a registration rights agreement that included a liquidated damages clause, which linked to an effective registration of such securities, the value of these warrants is now reflected as a financial instrument in the current liabilities section of the restated Condensed Consolidated Balance Sheet.
Can a liquidated damages clause help insure timely completion of a construction project?
was not reinstated on appeal, damages would include the assessment of the statutory interest rate of 9% to any actual damages suffered by Haymarket rather than enforcing Haymarket's excessive liquidated damages clause.
In our redecent design/build contract for the IBM 504 Building in Fishkill, New York, not only did we accept responsibility for design and construction of the electro-mechanical systems, but we also agreed to a stiff liquidated damages clause for failure to turnover the first floor of the building in just nine months.
Recovery Of Liquidated Damages Clause,Cartel Formation And Special Conditions For Etendering Please Refer Ecor Documents In Site.
In some states, liquidated damages clauses (fiat fees charged in the event of breach) are legal, but in other states they are not.