{"id":26917,"date":"2022-09-05T03:28:18","date_gmt":"2022-09-05T03:28:18","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/amjur\/damages-sect-504.html"},"modified":"2022-08-25T11:48:04","modified_gmt":"2022-08-25T11:48:04","slug":"damages-sect-504","status":"publish","type":"amjur","link":"https:\/\/reference.findlaw.com\/amjur\/damages-sect-504.html","title":{"rendered":"Am Jur 2d – Damages \u00a7 504"},"content":{"rendered":"
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IV. Liquidated Damages, A. Definitions, Distinctions, and Functions, \u00a7 504 – Generally<\/h2>\n

“Liquidated damages” are a set amount of money, or a certain formula, expressly stipulated in a contract as the amount of damages to be paid by a party that breaches the agreement.[1<\/a>] Liquidated damages can also be defined as the amount which has been ascertained by judgment or by specific agreement of the parties or which are susceptible of being made certain by mathematical calculation from known factors.[2<\/a>] The amount must be stipulated and agreed upon by the parties at the time the contract is entered[3<\/a>] and compensate for injuries in the event of contract breach.[4<\/a>]<\/p>\n

Damages are “liquidated” when the proper amount to be awarded can be determined with exactness from the cause of action as pleaded, i.e., from a pleaded agreement between the parties, by an arithmetical calculation, or by application of definite rules of law.[5<\/a>] Such clauses are permissible where they are neither unconscionable nor contrary to public policy.[6<\/a>] Parties are bound to the agreement unless it violates some principle of law.[7<\/a>]<\/p>\n

Liquidated damages provisions allow private parties to reform the fixed concept of compensatory damages for breach of contract, by providing relief in excess, or in lieu, of compensatory damages.[8<\/a>] Thus, the provision is used as an economical alternative to time-consuming and costly litigation for the allocation of damages before a breach occurs.[9<\/a>] The provision may discourage a party from breaching a contract,[10<\/a>] but it cannot be used as a penalty.[11<\/a>]<\/p>\n

The amount of liquidated damages, sometimes referred to as a liquidated claim or anticipatory damages,[12<\/a>] cannot be changed by the proof.[13<\/a>] Under the common law of contracts, liquidated damages reflect an ex ante<\/a> <\/span> agreement of the parties.[14<\/a>]<\/p>\n

Liquidated damages clauses do not limit a nondefaulting party’s remedies for a breach of contract but instead provide an agreed upon measure of damages.[15<\/a>]<\/p>\n

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All case links go to Westlaw and require login.<\/h2>\n<\/div>\n

1<\/a> \u00a0 Goldblatt v. C.P. Motion, Inc., 77 So. 3d 798 (Fla. 3d DCA 2011)<\/a> <\/span>; AGV Sports Group, Inc. v. Protus IP Solutions, Inc., 417 Md. 386, 10 A.3d 745 (2010)<\/a> <\/span>; Foreign Academic & Cultural Exchange Services, Inc. v. Tripon, 394 S.C. 197, 715 S.E.2d 331, 272 Ed. Law Rep. 658 (2011)<\/a> <\/span>; TXU Portfolio Management Co., L.P. v. FPL Energy, LLC, 328 S.W.3d 580 (Tex. App. Dallas 2010)<\/a> <\/span>, reh’g overruled, (Jan. 14, 2011) and review granted, (Feb. 17, 2012).
<\/span><\/p>\n

2<\/a> \u00a0 Sema v. Automall 46 Inc., 384 N.J. Super. 145, 894 A.2d 77 (App. Div. 2006)<\/a> <\/span>.
<\/span><\/p>\n

3<\/a> \u00a0 Guiliano v. Cleo, Inc., 995 S.W.2d 88 (Tenn. 1999)<\/a> <\/span>.
<\/span><\/p>\n

4<\/a> \u00a0 Barrie School v. Patch, 401 Md. 497, 933 A.2d 382, 225 Ed. Law Rep. 973 (2007)<\/a> <\/span>.
<\/span><\/p>\n

5<\/a> \u00a0 Morales Sand & Soil, L.L.C. v. Kendall Properties & Investments, 923 So. 2d 1229 (Fla. 4th DCA 2006)<\/a> <\/span>.
<\/span><\/p>\n

6<\/a> \u00a0 LeRoy v. Sayers, 217 A.D.2d 63, 635 N.Y.S.2d 217 (1st Dep’t 1995)<\/a> <\/span>.
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7<\/a> \u00a0 Antonios v. Gwinnett Clinic, Ltd., 294 Ga. App. 101, 668 S.E.2d 531 (2008)<\/a> <\/span>.
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8<\/a> \u00a0 Willard Packaging Co., Inc. v. Javier, 169 Md. App. 109, 899 A.2d 940 (2006)<\/a> <\/span>.
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9<\/a> \u00a0 Sandpiper Resorts Development Corp. v. Global Realty Investments, LLC, 904 F. Supp. 2d 971 (D. Ariz. 2012)<\/a> <\/span>; K-Con Bldg. Systems, Inc. v. U.S., 100 Fed. Cl. 8 (2011)<\/a> <\/span>.
<\/span><\/p>\n

10<\/a> \u00a0 Ladco Properties XVII v. Jefferson-Pilot Life Ins. Co., 531 F.3d 718 (8th Cir. 2008) (applying North Carolina law)<\/a> <\/span>.
<\/span><\/p>\n

11<\/a> \u00a0 Fuqua Const. Co., Inc. v. Pillar Development, Inc., 293 Ga. App. 462, 667 S.E.2d 633 (2008)<\/a> <\/span>.
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12<\/a> \u00a0 Lease Corp. of America Inc. v. Resnick, 288 A.D.2d 533, 732 N.Y.S.2d 266 (3d Dep’t 2001)<\/a> <\/span>.
<\/span><\/p>\n

13<\/a> \u00a0 Shin-Con Development Corp. v. I.P. Investments, Ltd., 270 S.W.3d 759 (Tex. App. Dallas 2008)<\/a> <\/span>.
<\/span><\/p>\n

14<\/a> \u00a0 Pichler v. UNITE, 542 F.3d 380 (3d Cir. 2008)<\/a> <\/span>.
<\/span><\/p>\n

15<\/a> \u00a0 Berggren v. Hill, 401 Ill. App. 3d 475, 340 Ill. Dec. 628, 928 N.E.2d 1225 (1st Dist. 2010)<\/a> <\/span>.
<\/span><\/p>\n

Read this complete Am Jur 2d section on Westlaw<\/a><\/b><\/div>\n","protected":false},"parent":0,"menu_order":0,"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":false,"_modified_date":"","_cloudinary_featured_overwrite":false},"class_list":["post-26917","amjur","type-amjur","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/reference.findlaw.com\/legal-api\/wp-json\/wp\/v2\/amjur\/26917","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/reference.findlaw.com\/legal-api\/wp-json\/wp\/v2\/amjur"}],"about":[{"href":"https:\/\/reference.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/amjur"}],"wp:attachment":[{"href":"https:\/\/reference.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=26917"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}