Liquidated damages

General
Liquidated damages is a contractual provision under which the parties agree to a stipulated amount of damages to be paid by a party for a breach of that agreement.

Sample Contract Clause

 * “If [Party #1] breaches the foregoing obligation [describe obligation], [Party #1] shall pay to [Party #2] as liquidated damages the sum of [amount]. The parties agree that the amount stated as liquidated damages is reasonable under the circumstances existing at the time that this agreement was executed.”