Liquidated Damages

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When a breach of contract occurs, there must be a remedy of damages. This is the payment in one form or the other for a breach of contract by the breaching party, to the non-breaching party. There are various kinds of remedies, which include; Compensatory damages, Punitive damages, and Liquidated damages. In the law of contract, when a breach of contract occurs, the non-breaching party has to do all he/she can in order to minimize the damages caused by the breach. However, some contracts contain provisions that specify a certain sum of money that is payable by the breaching party incase he/she fails to perform his/her duties as required by the contract signed. This sum of money paid for a breach of contract is known as, liquidated damages. The liquidated damages payable after a breach of contract are based on a reasonable estimate of the value of the promised performance, in the breached contract. The identified parties of the contract always spell out liquidated damages earlier in a contract. Damages are liquidated in a contract if; the amount is reasonable, and considers the anticipated harm caused by the contract breach, if there is difficulty in proving the loss, and if, there is a difficulty of finding another adequate remedy for the breach of contract. Secondly, damages in a contract are liquidated if the injury is uncertain or is difficult to quantify. In addition, the damages are supposed to be structured to function as damages, and not as a punishment. If the above is not met, a liquidated damage will be considered as null, and void. On the other hand, liquidated damages may not apply after a breach of contract if the liquidated damages clause was not included in the formation, and before signing the contract. In addit... ... middle of paper ... ...entered into contract, in case there is a breach of contract. Works Cited Goetz, Charles J. And Scott, Robert E. Liquidated Damages, Penalties and the Just Compensation Principle: Some Notes on an Enforcement Model and a Theory of Efficient Breach. Columbia Law Review, 7.4 (1977): 554-594. Print. David, Brizzee. 1991. "Liquidated Damages and the Penalty Rule: A Re-assessment." Brigham Young University Law Review 34. 4 (1991): 1613. Print. Calamari, John D., and Perillo, Joseph M. Contracts. St. Paul, Minn.: West, 1987. Print. Daniszewski, Robert M., and Jeffrey W. Sacks. 1990. "One View Too Many." Boston Bar Journal 34Apr. 1990: 34. Print. Weiller, K. H. Rev. of Sport, Rhetoric, and Gender: Historical Perspectives and Media Representations, ed. Linda K. Fuller. Choice Apr. 2007: 1377. Print. Johnson, Mark J. Liquidated Damages. Business Credit 104. 3 (2002): 68

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