liquidated damages

Liquidated damages provisions can be a useful way to ensure that you have a remedy if the other party to a contract fails to live up to its end of the bargain. When things go south in a commercial relationship, proving that a breach of the contract has occurred is only half the battle; the other half is proving damages, which can often be difficult. (The third half is executing on the judgment, but that’s a subject for a different blog.) A liquidated damages clause can help solve that problem.

Liquidated damages are a stated sum of money damages (or a formula for determining the damages) that the parties stipulate to in advance. [click to continue…]

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