General legal information about contract terms in the UK, not legal advice.
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Liquidated damages

Liquidated damages are a fixed sum payable for a specific breach, such as delay, agreed in advance. They avoid the need to prove actual loss.

Prepared by a retired English qualified solicitor (LLB, LLM) · reviewed · applies across the UK unless stated · how we draft

In more detail

They are enforceable if they protect a legitimate interest and are not out of all proportion to it; otherwise they may be struck down as a penalty.

In Scotland

Scots law applies the same test for penalties.

Put it into a contract

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Reviewed 2026-09-24. General legal information, not legal advice.