Alternatives To Liquidated Damages
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FAQ
Ingly, it frequently makes sense for both parties to reach an agreement in advance on what those damages would be. The parties must not only agree on the amount of liquidated damages, but they must also agree on the form of the liquidated damage clause including what triggers payment.
Sample liquidated damages clause: In the event of delay in [type of project] completion, the [performing party] shall pay liquidated damages to [the owner] in the amount of [dollar amount per day/week, etc.] [or] ["X" percent of the total contract price per day/week, etc.].
Liquidated damages are not designed to punish contractors, and thus cannot be an amount that could be considered excessive or punitive. For example, $20-$25 per day for each $100,000 of the contract price would be considered a reasonable amount.
4.4If Party B shall pay liquidated damages for breach of this Agreement or violation of the Platform Rules, Party A is entitled to request Party B to pay the liquidated damages. If Party B refuses or fails to pay, Party A is entitled to deduct the corresponding amount from the deposit.
