Nolo's Plain-English Law Dictionary
Need Professional Help? Talk to a Lawyer
Enter Your Zip Code to Connect with a Lawyer Serving Your Area
- Liquidated Damages
- In a contract, an amount of money agreed upon by both parties that a party who breaches the contract will pay to the other party. Liquidated damages clauses may not be enforced by judges when they appear in consumer contracts, because they are often used to punish the party who breaks the contract, rather than to compensate the other side for its actual damages.