If a liquidated damages clause is found to be a penalty,the non-breaching party may then recover actual damages.

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If a liquidated damages clause is found to be a penalty, the non-breaching party may then choose to recover actual damages instead. This is because a penalty clause is unenforceable and does not accurately reflect the true damages suffered by the non-breaching party. However, if the liquidated damages clause is found to be a valid and enforceable provision, the non-breaching party may only recover the amount specified in the clause, rather than actual damages.

If a Liquidated Damages Clause Is Found to Be a Penalty,the