Agreed Damages Clause

An Agreed Damages Clause is a provision in a contract that specifies a predetermined amount of money that one party will pay to the other if they breach the contract. This clause aims to simplify the process of determining damages, avoiding lengthy legal disputes. Instead of the injured party needing to prove actual losses, they can rely on the agreed amount. This brings clarity and ensures that both parties understand the consequences of not fulfilling their contractual obligations, helping to reduce uncertainty and encourage compliance.