White Paper

6 Pages
  • 6 Pages

Use of Terms and Conditions in Purchase Agreements: Liquidated Damages

 

Understand why a penalty can’t be disguised as liquidated damages.

The benefits of a liquidated damages provision designed to spell out the damages available in the event of a breach, promoting certainty and eliminating the litigation expense of proving damages, are obvious. But these provisions often are not enforced. This white paper reviews how these provision can be enforced and discusses the Two Prong Test and tips on setting liquidated damages.