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Liquidated damages, also referred to as liquidated and ascertained damages (LADs), [1] are damages whose amount the parties designate during the formation of a contract [2] for the injured party to collect as compensation upon a specific breach (e.g., late performance). [3] This is most applicable where the damages are intangible.
For example, A contracts with B on January 1 to sell 500 quintals of wheat and to deliver it on May 1. Subsequently, on April 15, A writes to B and says that he will not deliver the wheat. B may immediately consider the breach to have occurred and file a suit for damages for the scheduled performance even though A has until May 1 to perform.
The example of this damage is when the plaintiff has a contract in purchasing defendant's house under their agreement, and the defendant must pay back the deposit money as liquidated damages since there exists a breach of a contract by the defendant.
If retailers did sell below the list price, they would have to pay £5 per tyre in liquidated damages to Dunlop. Dunlop thus was the third party to a contract between Selfridge and Dew. When Selfridge sold the tyres at below the agreed price, Dunlop sued it for breach of contract by injunction and claimed damages. Selfridge argued that Dunlop ...
A legal remedy, also referred to as judicial relief or a judicial remedy, is the means with which a court of law, usually in the exercise of civil law jurisdiction, enforces a right, imposes a penalty, or makes another court order to impose its will in order to compensate for the harm of a wrongful act inflicted upon an individual.
Penal damages are liquidated damages which exceed reasonable compensatory damages, making them invalid under common law.While liquidated damage clauses set a pre-agreed value on the expected loss to one party if the other party were to breach the contract, penal damages go further and seek to penalise the breaching party beyond the reasonable losses from the breach. [1]
The Hudson Formula derives from Hudson's Building and Engineering Contracts and is used for the assessment of delay damages in construction claims.. The formula is: (Head Office overheads + profit percentage) ÷ 100 x contract sum ÷ period in weeks x delay in weeks
Special damages compensate the claimant for the quantifiable monetary losses he has suffered. [13] For example, extra costs, repair or replacement of damaged property, lost earnings (both historically and in the future), loss of irreplaceable items, additional domestic costs, and so on. [14] They are seen in both personal and commercial actions.