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.

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"We paid for some stipulated damages. But the judgment call was that it was really disadvantageous to us.
But if the stipulated damages sum (which could even be less than the actual damages) might reasonably have been anticipated at the time of contracting, the provision will likely be upheld.
Because many small businesses may not be able to fully document their individual losses, class members can receive up to $2,500 in stipulated damages by showing that they were a viable business.<br />Judge James Dever gave the agreement preliminary approval on May 2, and a final approval hearing is set for Sept.
This edition also contains expanded material on electronic contracting, a reorganized remedies chapter, and revised and reorganized material on areas including promissory estoppel and stipulated damages. ([umlaut] Ringgold, Inc., Portland, OR)
* Awaits sentencing after pleading guilty on June 28, 2011 to one count of mail fraud with stipulated damages of between $2.5 million and $7.5 million in U.S.
And it would allow state judges to make a determination that returning stipulated damages to victims is "not practicable" and send the money directly to the legal aid fund, a potential due process violation, they said.
Indeed, as suggested below, a contract might provide for a set of contingent, stipulated damages. Thus, like conditions, stipulated damages are tools that a promisor may use to allocate risks.
To begin with, a central problem with penalty doctrine, at least in its traditional form, is that it determines the enforceability of stipulated damages clauses without reference to other terms of the contract.
Second, I replicate this effect with a penalty clause, showing that subjects prefer to breach a contract with a liquidated-damages clause even when it is more costly (e.g., the damages are higher) than paying the expectation-level damages in a contract without stipulated damages. In the third experiment, I find that subjects' willingness to breach a contract with a liquidated-damages clause is driven by the belief that the clause changes the promisee's subjective probability of breach.
In such an eventuality, he said, a party could be absolved of his contractual liability without that party having to pay the stipulated damages in the event of a violation.
optimal structure of stipulated damages. See, e.g., Aaron S.