Liquidated Damages are the predetermined amount of money that is the damages whose amount the parties designate during the performance of a contract for losses incurred party to collect as compensation upon the contract. The Liquidated Damages involve the exchange of money or the promise of performance have a liquidated damages stipulation. (e.g., late completion, lower performance, etc.)
Reference Definition by Investopedia.com: Liquidated damages are presented in certain legal contracts as an estimate of otherwise intangible or hard-to-define losses to one of the parties. It is that provision allows for the payment of a specified sum should one of the parties be in breach of contract.
Related Definitions in the Project: The Project Contract; Project Management
