Damages that will be paid upon a breach of contract,but that are established in advance are defined as ________ damages.

Question

Quizplus · Accepted Answer

The damages that are established in advance and will be paid upon a breach of contract are called liquidated damages. These damages are often included in contracts to provide certainty for both parties in the event of a breach. It is different from punitive damages which are intended to punish the breaching party, or actual damages which are the real losses suffered by the non-breaching party as a result of the breach. Incidental damages, on the other hand, are additional expenses incurred by the non-breaching party as a result of the breach such as storage, transportation or advertising expenses.

Damages That Will Be Paid Upon a Breach of Contract,but