Liquidated Damages

Liquidated damages are a predetermined amount of money that a breaching party must pay if they fail to perform their contractual obligations.

How It Works in Contracts

Enforceable when actual damages would be difficult to calculate and the amount is reasonable. Courts may refuse to enforce if disproportionate.

Examples

$500 per day for late construction delivery
1% of contract value per week of software delay
Forfeiture of deposit if buyer fails to close real estate

Related Terms

Related Resources

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Frequently Asked Questions

What is contract lifecycle management?: Contract lifecycle management (CLM) is the process of managing contracts from creation through execution, compliance, and renewal. Snifty Contracts automates this with AI-powered data extraction, approval workflows, and renewal alerts.
How much does Snifty Contracts cost?: Snifty Contracts offers two plans: Essential at $99/month (or $82.50/month billed annually) and Professional at $199/month (or $166/month billed annually). Both include a 7-day free trial.
How long does it take to set up Snifty Contracts?: Snifty Contracts can be set up in under 60 minutes. Simply sign up, upload your contracts, and the AI automatically extracts key details like parties, dates, and values.
Can Snifty Contracts send renewal reminders?: Yes. Snifty Contracts automatically sends configurable email reminders before contract renewal dates. You can customize reminder schedules per contract or set organization-wide defaults.