an amount of money agreed upon by both parties to a contract which one will pay
to the other upon breaching (breaking or backing out of) the agreement or if a lawsuit
arises due to the breach. Sometimes the liquidated damages are the amount of a deposit
or a down payment, or are based on a formula (such as 10% of the contract amount).
The non-defaulting party may obtain a judgment for the amount of liquidated damages,
often based on a stipulation (clear statement) contained in the contract, unless
the party who has breached the contract can make a strong showing that the amount
of liquidated damages was so "unconscionable" (far too high under the circumstances)
that it appears there was fraud, misunderstanding or basic unfairness.
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