In any legal contract in Florida, two main types of damages can be awarded to one party: liquidated damages and specific performance. But what’s the difference between the two? And when is it best to use one over the other? Keep reading to find out more.
Liquidated damages are a type of damage that is specifically listed in a legal contract. They are intended to compensate one party for any losses that may be incurred as a result of the other party’s breach of contract.
Specific performance is an order from the court requiring one party to perform their obligations under the contract. Unlike liquidated damages, specific performance can be awarded even if there is no actual loss suffered by the injured party just to ensure that the parties to a contract are held accountable for their actions.
When is it appropriate to use liquidated damages?
Liquidated damages are typically used when there is a high risk of breach by one or more of the parties involved in the contract. For example, suppose you are an entrepreneur who has entered into a contract with another business and that business breaches the agreement. In that case, it can be difficult to determine exactly how much money you have lost as a result. Liquidated damages can provide a way to recover some of those losses, even if they are difficult to quantify.
When is it appropriate to use specific performance?
Specific performance is typically used in situations where the injured party would be unable to receive adequate relief through the award of liquidated damages. For example, if you enter into a contract with someone to build you a custom-made swimming pool and they fail to deliver, and you go through real estate litigation, there may not be any other legal remedy available to you other than an order for specific performance.
So if you are involved in a contract dispute, it is important to do your research and consult with relevant personnel to determine which type is best for you. Each is appropriate under specific situations.