What is "liquidated damages"

Liquidate \Liq"ui*date\ (l[i^]k"w[i^]*d[=a]t), v. t. [imp. & p. p. Liquidated (-d[=a]`t[e^]d); p. pr. & vb. n. Liquidating.] [LL. liquidatus, p. p. of liquidare to liquidate, fr. L. liquidus liquid, clear. See Liquid.]

1. (Law) To determine by agreement or by litigation the precise amount of (indebtedness); or, where there is an indebtedness to more than one person, to determine the precise amount of (each indebtedness); to make the amount of (an indebtedness) clear and certain.

   A debt or demand is liquidated whenever the amount due is agreed on by the parties, or fixed by the operation of law.
   --15 Ga. Rep. 321.

   If our epistolary accounts were fairly liquidated, I believe you would be brought in considerable debtor.
   --Chesterfield.

2. In an extended sense: To ascertain the amount, or the several amounts, of, and apply assets toward the discharge of (an indebtedness).
   --Abbott.

3. To discharge; to pay off or settle, as an indebtedness.

   Friburg was ceded to Zurich by Sigismund to liquidate a debt of a thousand florins.
   --W. Coxe.

4. To make clear and intelligible.

   Time only can liquidate the meaning of all parts of a compound system.
   --A. Hamilton.

5. To make liquid. [Obs.]

6. To convert (assets) into cash.

7. To kill; -- used mostly of governments or organizations killing their enemies; as, Stalin liquidated many of the Kulaks.

8. To dissolve (an organization); to terminate (an activity).

   Liquidated damages (Law), damages the amount of which is fixed or ascertained.
   --Abbott.

n. (context legal English) An amount owed to a plaintiff in a lawsuit by the defendant that is determined by operation of law, such as the unpaid amount in a breach of contract.

Liquidated damages (also referred to as liquidated and ascertained damages) are damages whose amount the parties designate during the formation of a contract for the injured party to collect as compensation upon a specific breach (e.g., late performance).

When damages are not predetermined/assessed in advance, then the amount recoverable is said to be 'at large' (to be agreed or determined by a court or tribunal in the event of breach).