Section 18.17 Liquidated Damages

• Library: Tort Law 2016

4. (§18.17) Liquidated Damages

The amount of damages is often a contentious issue in litigation. A liquidated damages clause in a contract purports to change this result by establishing ahead of time the amount of damages in the event of a breach. A liquidated damages clause can be a useful way for contracting parties to allocate risk. When a clause fixing a damage amount "represents a reasonable forecast of harm caused by a breach of contract, and the harm is of the type that is difficult to accurately...