A liquidated damages clause typically requires a party who breaches a contract to pay a certain amount to the nonbreaching party.

Question

Quizplus · Accepted Answer

A liquidated damages clause is a contractual provision that requires the party who breaches the contract to pay a certain amount of money to the nonbreaching party as compensation for the damages caused by the breach. The amount of damages agreed upon must be a reasonable estimate of the actual damages that the nonbreaching party would suffer in the event of a breach.

A Liquidated Damages Clause Typically Requires a Party Who Breaches