Liquidated Damages.docx - Liquidated Damages Definition...

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Liquidated Damages - Definition : Liquidated damages are damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach. When damages are not predetermined/assessed in advance, then the amount recoverable is said to be 'at large' - Damage claims must be o reasonably certain o foreseeable o and mitigated - Parties may also limit expectation by K through “liquidated damages” - BUT liquidated damages can NOT be penal R2K 356 (1) : - Damages for breach by either party may be liquidated in the agreement - But only at an amount that is reasonable in light of o The anticipated or o Actual loss - Caused by the breach and the difficulties of proof of loss

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