Liquidated Damages Clauses

Liquidated damages clauses are specific terms in a contract that outline a predetermined amount of money one party will pay to the other if they fail to fulfill their obligations. These clauses aim to provide clarity and avoid disputes over what constitutes a reasonable compensation for delays or breaches. Instead of measuring actual damages, the parties agree in advance on an amount, making it easier to enforce if things go wrong. This helps both sides understand their risks and consequences before entering into the agreement.