Liquidated Damages Lawyer

What Are Liquidated Damages?

Liquidated damages are the amount of monetary damages that contracting parties agree will be paid by the breaching party if the contract is breached.  This amount is written into the contract in a portion known as a liquidated damages clause.

Enforcement of Liquidated Damages Clauses

Courts will often enforce liquidated damages clauses if the damages for breach of the contract will be difficult to estimate.  However, a court will not enforce a liquidated damages clause if the clause is unfair or awards an excessive amount of money.  Likewise, a court will not award liquidated damages if the contract is based on fraud or mistake.  If a court determines that such a clause is unenforceable, the clause is void, and the non-breaching party may sue for other contract remedies.

Examples of Enforceable Liquidated Damages

• Reasonable down payments
• Reasonable proportions of the entire contract price (such as 10%)
• Damages that appear to be fairly calculated by the parties

How Can a Lawyer Help?

If you are drafting a contract, a commercial law lawyer will help guide you through the complicated legal process so that you will be able to protect your legal rights.  In the event that your contract has been breached, an attorney can help you get the remedy you deserve, and/or help protect you from unfair contract language.