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Corporate Matters: Should a Liquidated Damages Clause be Included in a Contract?

Volume 3 No 10    /    Read Article

By Simon H. Prisk

A liquidated damage clause in a contract is an attempt by the parties to estimate damages in the event of non-performance or breach of the contract. It represents a way to compensate the aggrieved party for an act of the other party to the agreement. To be enforceable, the amount of the liquidated damages must not be a penalty. Simon H. Prisk explains when these clauses should be used, whether a clause may have a problem regarding its enforcement, and what standards are used for making that determination.    See more →