Legal Definitions - liquidated amount

LIQUIDATED AMOUNT

A liquidated amount is a figure that can be easily calculated based on the terms of an agreement.

Example 1: In a rental agreement, the security deposit may be a liquidated amount. If the agreement states that the security deposit is equal to one month's rent, then the amount can be easily calculated based on the monthly rent.

Example 2: In a contract between two businesses, there may be a clause that specifies a liquidated amount for damages in case of a breach of contract. If the clause states that the liquidated amount is $10,000, then the amount is readily computed and agreed upon by both parties.

The examples illustrate how a liquidated amount is a predetermined figure that can be easily calculated based on the terms of an agreement. This helps to avoid disputes and uncertainty in case of a breach of contract or other issues. By specifying a liquidated amount, both parties can agree on the amount of damages or compensation in advance, which can save time and money in legal proceedings.