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To be enforceable, an estimate of the damages from a breach must be difficult.
A liquidated damages clause establishes a predetermined quantity of money that must be paid as damages for disappointment to act under a contract. The liquidated damages is to be the parties' best estimate of the damages that will be caused by a breach at the time they sign the contract.
A liquidated damages clause iis unenforceable in 2 circumstances:
(1) if the damages streaming from a breach of the contract were ascertainable at the time of implementation;
or
(2) if the damages fixed were conspicuously undue to the potential losses.
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