Liquidated damages are considered reasonable if the amount is not so large as to be a penalty or so small as to be unconscionable.

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Liquidated damages are considered reasonable when the amount is not excessive or too low. If the amount is too high or too low, it may be considered a penalty or unconscionable, respectively. Therefore, it is important to ensure that liquidated damages are reasonable and proportionate to actual damages that may be incurred.

Liquidated Damages Are Considered Reasonable If the Amount Is Not