Define liquidated damages.

Define liquidated damages.

• A. The actual measured compensation
• B. Costs for attorney fees only
• C. Moneys paid by the contractor to the owner for every day the project is late. They represent actual anticipated losses the owner will incur if the project is not completed on time.
• D. Punitive damages

Answer: (C)

Liquidated damages are a pre-set amount that one party agrees to pay the other if a contract is breached, typically tied to the time delay. The best choice describes money paid by the contractor to the owner for each day the project is late, representing the anticipated losses if the work isn’t completed on time. This reflects a forward-looking estimate of damages agreed in advance to avoid arguing about actual losses after the breach. It’s not merely the actual damages measured after the fact, not limited to attorney fees, and not punitive damages.

Liquidated damages are a pre-set amount that one party agrees to pay the other if a contract is breached, typically tied to the time delay. The best choice describes money paid by the contractor to the owner for each day the project is late, representing the anticipated losses if the work isn’t completed on time. This reflects a forward-looking estimate of damages agreed in advance to avoid arguing about actual losses after the breach. It’s not merely the actual damages measured after the fact, not limited to attorney fees, and not punitive damages.