Stipulated damages

STIPULATED DAMAGES, contracts. The sum agreed by the parties to be paid, on a breach of a contract, by the party violating his engagement to the other.
     2. It is difficult to distinguish, in some cases, between stipulated damages and a penalty; (q.v.) 3 Chitty's Commer. Law, 627; 2 Bos. & Pull. 346. The effect of inserting stipulated damages, either at law or equity, a pears to be, that both parties must abide by the stipulation, and the prescribed sum must be given. Holt, C. N. P. 46 Newl. Contr. 313; see 5 Taunt. Rep. 247. Vide Damages, Liquidated.