Liquidation refers to the settlement or agreement of an amount of money or debt. It is similar to when you and your friend come to an agreement on the amount they owe you for borrowing your toy. Once both parties agree on the sum, the debt is liquidated and resolved.
Liquidated refers to the process of settling or determining an amount or debt, usually by agreement. For example, a company may need to sell some of its assets to pay off its liquidated debt. Similarly, a landlord and tenant may agree to liquidate the security deposit to cover damages, meaning they use the deposit to settle or determine the amount needed.
When a debt is liquidated, it means that the amount owed has been determined and agreed upon, and is now due for payment.
In some cases, a liquidated debt can be disputed if there is evidence that the amount owed is incorrect or if there was a mistake in the calculation.
A liquidated damages clause in a contract specifies the amount of money that must be paid if one party breaches the contract. This amount is predetermined and agreed upon by both parties.
Generally, liquidated damages clauses are enforceable in court as long as they are reasonable and not considered a penalty.
A liquidated damages clause can be challenged in court if it is found to be unreasonable or if it is determined to be a penalty rather than a genuine estimate of damages.
Liquidated damages are predetermined and specified in a contract, while unliquidated damages are not predetermined and must be determined by a court or arbitrator.
Liquidated damages clauses can be included in most types of contracts, but there are certain limitations and requirements that must be met for them to be enforceable.
Liquidated damages are typically calculated based on a reasonable estimate of the actual damages that would be incurred in the event of a breach of contract.
If a party fails to pay liquidated damages as specified in a contract, the other party may have the right to pursue legal action to enforce the payment.
Liquidated damages can be waived or modified after a contract is signed, but both parties must agree to the change in writing for it to be legally binding.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 16th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/liquidated/
- Modern Language Association (MLA):Liquidated. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/liquidated/.
- Chicago Manual of Style (CMS):Liquidated. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/liquidated/ (accessed: May 09 2024).
- American Psychological Association (APA):Liquidated. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/liquidated/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts