If the parties to a contract stipulate an amount that will be paid in the event of a breach (a liquidated damages clause),the courts will always enforce it.

Question

Quizplus · Accepted Answer

The courts will enforce a liquidated damages clause only if it meets certain criteria, such as being a reasonable estimate of the damages that would result from a breach and not being punitive in nature. If the clause is found to be unreasonable or punitive, the courts may not enforce it.

If the Parties to a Contract Stipulate an Amount That