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Related to Liquidated: Liquidated damages

DAMAGES, LIQUIDATED, contracts. When the parties to a contract stipulate for the payment of a certain sum, as a satisfaction fixed and agreed upon by them, for the not doing of certain things particularly mentioned in the agreement, the sum so fixed upon is called liquidated damages. (q.v.) It differ from a penalty, because the latter is a forfeiture from which the defaulting party can be relieved. An agreement for liquidated damages can only be when there is an engagement for the performance of certain acts, the not doing of which would be an injury to one of the parties; or to guard against the performance of acts which, if done, would also be injurious. In such cases an estimate of the damages may be made by a jury, or by a previous agreement between the parties, who may foresee the consequences of a breach of the engagement, and stipulate accordingly. 1 H. Bl. 232; and vide 2 Bos. & Pul. 335, 350-355; 2 Bro. P. C. 431; 4 Burr, 2225; 2 T. R. 32. The civil law appears to agree with these principles. Inst. 3, 16, 7; Toull. liv. 3, n. 809; Civil Code of Louis. art. 1928, n. 5; Code Civil, 1152, 1153.
     2. It is to be observed, that the sum fixed upon will be considered as liquidated damages, or a penalty, according to the intent of the parties, and the more use of the words "penalty," &c "forfeiture," or "liquidated damages," will not be regarded is at all decisive of the question, if the instrument discloses, upon the whole, a different intent. 2 Story, Eq. Sec. 1318; 6 B.& C. 224; 6 Bing. 141; 6 Iredell, 186; 3 Shepl. 273; 2 Ala. 425; 8 Misso. 467.
     3. Rules have been adopted to ascertain whether such sum so agreed upon shall be considered a penalty or liquidated damages, which will be here enumerated by considering, first, those cases where it has been considered as a penalty and, secondly, where it has been considered as liquidated damages.
     4.-1. It has been treated as penalty, 1st. where the parties in the agreement have expressly declared the sum intended as a forfeiture or a penalty, and no other intent can be collected from the instrument. 2 B. & P, 340, 350, 630; 1 McMullan, 106; 2 Ala. 425; 5 Metc. 61; 1 H. Bl. 227; 1 Campb. 78; 7 Wheat. 14; 1 Pick. 451; 4 Pick. 179; 3 Johns. Cas. 297. 2d. Where it is doubtful whether it was intended as a penalty or not, and a certain debt or damages, less than the penalty, is made payable on the face of the instrument. 3 C. & P. 240; 6 Humph. 186. 3d. Where the agreement was made, evidently, for the attainment of another object, to which the sum specified is wholly collateral. 11 Mass. 76; 15 Mass. 488; 1 Bro. C. C. 418. 4th. Where the agreement contains several matters, of different degrees of importance, and yet the sum named is payable for the breach of any, even the least. 6 Bing. 141; 5 Bing. N. C. 390; 7 Scott, 364; sed vide, 7 John. 72; 15 John. 200. 5th. Where the contract is not under seal, and the damages are capable of being certainly known and estimated. 2 B. & Al. 704; 6 B. & C. 216; 1 M. & Malk. 41; 4 Dall. 150; 5 Cowen, 144.
     5.-2. The sum agreed upon has been considered as liquidated damages, 1st. Where the damages are uncertain, and are not capable of being ascertained by any satisfactory and known rule. 2 T. R. 32; 1 Alc. & Nap. 389; 2 Burr, 2225; 10 Ves. 429; 3 M. & W. 545; 8 Mass. 223; 3 C. & P. 240; 7 Cowen 307; 4 Wend. 468. 2d. Where, from the tenor of the agreement, or from the nature of the case, it appears that the parties have ascertained the amount of damages by fair calculation and adjustment. 2 Story, Eq. Juris. Sec. 1318; 10 Mass. 459; 7 John. 72; 15 John. 200; 1 Bing. 302; 7 Conn. 291; 13 Wend. 507; 2 Greenl. Ev. Sec. 259; 11 N. H. Rep. 234; 6 Blackf. 206; 26 Wend. 630; 17 Wend. 447; 22 Wend. 201; 7 Metc. 583; 2 Ala. 425; 2 Shepl. 250.
     Vide, generally, 7 Vin. Ab. 247; 16 Vin. Ab. 58; 2 W. Bl. Rep. 1190;. Coop. Just. 606; 1 Chit. Pr. 872; 2 Atk. 194; Finch. 117; Prec. in Ch. 102; 2 Bro. P. C. 436; Fonbl. 151, 2, note; Chit. Contr. 836; 11 N. Hamp. Rep. 234.

LIQUIDATED. That which is made clear, certain, and manifest; as, liquidated damages, ascertained damages liquidated debt, an ascertained debt, as to amount. A debt is liquidated when it is certain what is due, and how much is due, cum certum est an et quantum debeatur; for although it may appear that something is due, if it does not also appear how much is due, the debt is not liquidated. An unliquidated claim is one which one of the parties to the contract cannot alone render certain. 5 M. R. 11; 1 N. S. 130; 6 N S. 715; 6 N. S. 10, 13 L. R. 275; 7 L. R. 134, 599. Such a claim cannot be set off. 2 Dall. 237; S. C. 1 Yeates' R. 571; 10 Serg. & Rawle, 14; see Poth. Ob. n. 628; Dig. 50, 17, 24; Id. 42, 1, 64; Id. 1, 45, 112; Id. 46, 5, 11; Code, 7, 47. Dom. Lois Civ. l. 4, t. 2, s. 2, n. 2; Arg. Inst. 1. 4, c. 7; 7 Toull. n. 369; 6 Duv. Dr. Civ. Fr. n. 304.

References in periodicals archive ?
If a company is liquidated because of the expiry of the duration of the company, the General Meeting, at least 3 months before such expiry, must adopt the decision to liquidate the company and elect the liquidator, or adopt the decision to extend the duration and amend the Articles of Association of the company.
The income is treated as ordinary to the liquidated partner, but the related accrued expense is not.
It is important that the owner exercise good judgment when determining the number of months to be covered under liquidated damages, based on actual experience relating to construction delays.
Trinity's standard form lease, which apparently was not subject to negotiation, required each tenant to deposit one month's rent, which it then held as liquidated damages in the event the tenant moved out before the lease ended.
It is also remarkable for its enforcement of a penal liquidated damages provision that doubled the firm's actual fees.
The Tax Court said the liquidated damages were excludable under the Supreme Court's test in the Burke case.
The contractor argued that the liquidated damages provision should not be enforced because, among other things, (1) the liquidated damages constituted an improper penalty and (2) the owner's rights to claim such damages had been waived by virtue of the certifications of the contractor's requisitions for payment by the owner's architect in the period subsequent to the contract-mandated period.
The Ninth and the Seventh Circuit Courts of Appeals recently came to opposite conclusions regarding the excludability of back pay and liquidated damages received to settle claims under the Age Discrimination in Employment Act (ADEA).
First, under current accounting rules, the assets of a business being liquidated are required to be evaluated for impairment using different criteria than used for continuing operations.
In addition to the dividend on the Series F Depositary Shares, Intermedia will pay liquidated damages to holders of the Series F Depositary Shares on April 15, 1999.
Once it is determined that liquidated damages are owed, VDOT will give written notice to the contractor, the Association and the trustee.
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