Liquidated Damages Clause
(MD)

Summary

This liquidated damages clause template may be used in a commercial contract governing by Maryland law to fix the amount of damages arising from a future breach of the contract. This template includes practical guidance and drafting notes. Liquidated damages are damages agreed upon by the contracting parties at the time of contract formation and before any breach has occurred, to compensate the injured party in the event of a breach. They remove the non-breaching party's burden of having to establish with reasonable certainty the amount of its actual damages in the event the other party breaches the contract. Liquidated damages are one of several forms of damages for breach of a commercial contract. For more information regarding liquidated damages, see Damages for Breach of Commercial Contract (MD), UCC Damages and Remedies, and Mitigation of Damages in Sale of Goods Contracts. For non-jurisdictional liquidated damages clauses, see Liquidated Damages (Sale of Goods) Clauses.