Legal Concept Explained
Liquidated Damages
“A fixed penalty fee agreed upon in advance if someone misses a deadline or breaches a specific rule.”
Formal Legal Definition
A pre-agreed financial amount set forth in a contract that a breaching party must pay as compensation if they violate a specific term (such as missing a strict software delivery deadline).
How It Appears in Actual Contracts
'In the event of unexcused project delivery delay beyond thirty (30) days, Vendor shall pay liquidated damages of $1,000 per business day of delay, up to a maximum of 10% of the total contract value.'
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