Florida Business Litigation Lawyer Blog
Liquidated damages are an agreed fixed amount of money that parties enter into in a contract where they said if another party breaches it, this is going to be the amount they agree upon in damages. Liquidated damages frequently exceed what the law permits and there are legal limitations as to what a liquidated damage provision will allow.
It has to have a nexus or a relationship to what the real damages would be and it’s not supposed to be a penalty. Frequently you’ll have liquidated damage provisions that are not enforceable and they’re really designed to be a penalty and they will not be enforceable in court.