Liquidated damages are monetary awards to compensate a party for an agreed-upon loss. So long as the parties agree it would be difficult to calculate an actual award of damages, that the amount of liquidated damages is reasonable, and that the award of liquidated damages is not punitive, a court would likely enforce the liquidated damages provision.
Because liquidated damage provisions relieve a party of the burden of proving actual damages, they should be carefully considered.
Equitable relief consists of non-monetary remedies, such as an injunction. If a party agrees to injunctive relief to enforce a contract term, a judge could order the party discontinue certain conduct. If the party disobeys, he/she could be held in contempt of court and jailed. Injunctive relief alters a legal presumption that breaches of contract can be remedied through monetary awards. TH
Patrick O’Rourke works in the Office of University Counsel, Department of Litigation, University of Colorado, Denver.