Compensation, usually a monetary
judgment, awarded to one party in a contract
who suffers harm or loss that is the result of
negligence or breach of contract on the part
of another party. See also: Liquidated
Damages, Penalty Charge.
Damages (usually in the
form of money) to be paid by a party who
breaches all or part of a contract with another
party. The amount of damages is agreed upon
by all parties to a contract. These damages
may be applied on a daily basis for as long as
the breach is in effect, but they may not be
imposed as an arbitrary penalty. The key to
establishing liquidated damages is
reasonableness; it is incumbent upon the
buyer to demonstrate, through quantifiable
means, that damages did occur. See also:
Penalty Charge, Damages.
that are awarded in a civil case to punish the
defendant for willful or gross misconduct.