If a liquidated damages clause demands an unusually large sum that is not related to reasonably-anticipated actual damages, the clause will be held to be void as a(n):

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An unusually large sum demanded by a liquidated damages clause that is not related to reasonably-anticipated actual damages is considered a penalty. A penalty is not legally enforceable and the parties may be better off agreeing to actual damages instead.

If a Liquidated Damages Clause Demands an Unusually Large Sum