Liquidated Damages
Liquidated damages are pre-agreed compensation amounts specified in a contract, payable upon breach without need to prove actual loss.
| Purpose | Rationale |
| Certainty | Amount predetermined |
| Avoid litigation | No need to prove damages |
| Incentivize performance | Clear consequences for breach |
| Risk allocation | Both parties understand exposure |
| Dubai Application | Context |
| Developer delays | AED 10 per day per sqm typical |
| Buyer default | Deposit forfeiture clause |
| Construction contracts | Per-day delay penalties |
| Enforceability | Must be genuine pre-estimate of loss |
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