Understanding Liquidated Damages in Contracts

– Liquidated damages provisions are most applicable when damages are difficult to accurately project.
– Courts are more likely to enforce liquidated damages provisions when breach of contract may have led to significant and potentially inaccurate damage estimations.
– In cases where the breach may have led to a chain of losses, including lost profits, the “flat fee” nature of the provision is arguably more just and enforceable by the court. – Reasonable liquidated damages provisions are enforceable if the damages are reasonably proportionate to the breach of contract.
– If there is a significant difference in bargaining power between the parties entering into the agreement, the liquidated damages clause may be deemed unenforceable.
– Binnall Law Group, PLLC is a boutique commercial litigation firm in Alexandria, VA, with extensive experience advocating for clients involved in challenging commercial disputes.

https://www.binnall.com/insights-news/the-enforceability-of-a-liquidated-damages-provision/