Liquidated Damages

AAA

DEFINITION of 'Liquidated Damages'

Present in certain legal contracts, this provision allows for the payment of a specified sum should one of the parties be in breach of contract.

INVESTOPEDIA EXPLAINS 'Liquidated Damages'

This is meant as a fair representation of losses in situations where actual damages are difficult to ascertain. These liquidated damages are meant to be fair rather than punitive.

RELATED TERMS
  1. Ethical Investing

    Using one's ethical principles as the main filter for securities ...
  2. Onerous Contract

    A type of contract where the costs involved with fulfilling the ...
  3. Liquidation

    1. When a business or firm is terminated or bankrupt, its assets ...
  4. Contra Proferentem Rule

    A rule in contract law which states that any clause considered ...
  5. Cumis Counsel

    Legal counsel chosen by the insured when the insurer has a conflict ...
  6. TSA PreCheck

    This program allows travelers deemed low-risk by the Transportation ...
Related Articles
  1. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  2. Options & Futures

    Moral Hazards: A Bump In The Contract Road

    Learn how this phenomenon can cause a party in an agreement to behave differently than expected.
  3. Options & Futures

    Housing Deals That Fall Through

    Find why buyers back out and what you can do if you're left holding the bag.
  4. Home & Auto

    Protect Your Company From Employee Lawsuits

    Understanding employment practices liability insurance is easy, once you know the basics.
  5. Taxes

    Is It Smart To Get Dual Citizenship?

    Does it ever make sense to be a citizen of the U.S. and somewhere else? Yes, so you can work minus a visa – not so much, if you get drafted into the army.
  6. Retirement

    Expat In America: Visas To Retire In the U.S.

    It isn't easy for non-citizens to retire in the United States unless a family member is already a citizen. But some visas will allow for longer visits
  7. Mutual Funds & ETFs

    The Impact of the Janus Market Timing Ruling

    A look at the impact of the Janus Supreme Court ruling on market timing.
  8. Options & Futures

    Get To Know These Crucial US Options Market Regulations

    How are options regulated in the U.S and which organizations are involved in options market regulations?
  9. Economics

    The Impact Of Ending The US Embargo On Cuba

    Many argue that ending the US embargo on Cuba will not only make US consumers happy, but also help the US economy and bring more freedoms to Cuba.
  10. Economics

    Popular Places Where U.S. Citizens Need A Visa

    A U.S. passport will get you into many countries, but not everywhere. Here's how to visit five of the most popular destinations that require visas.

You May Also Like

Hot Definitions
  1. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  2. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  3. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  4. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
  5. Preference Shares

    Company stock with dividends that are paid to shareholders before common stock dividends are paid out. In the event of a ...
  6. Accrued Interest

    1. A term used to describe an accrual accounting method when interest that is either payable or receivable has been recognized, ...
Trading Center