Liquidated Damage Checklist - Washington

Liquidated Damage Checklist is a legal document that was released by the Washington State Department of Enterprise Services - a government authority operating within Washington.

FAQ

Q: What are liquidated damages?
A: Liquidated damages are a predetermined amount of money that parties agree to as compensation for a specified breach of contract.

Q: When are liquidated damages typically used?
A: Liquidated damages are commonly used in contracts to provide a remedy for a party in the event of a breach.

Q: How are liquidated damages determined?
A: The amount of liquidated damages is usually determined based on a reasonable estimate of the actual damages that may be incurred as a result of the breach.

Q: Are liquidated damages enforceable in Washington?
A: Yes, liquidated damages are generally enforceable in Washington if they are a reasonable estimate of the anticipated damages and not a penalty.

Q: What happens if liquidated damages are considered a penalty?
A: If liquidated damages are deemed to be a penalty rather than a reasonable estimate of damages, they may be invalidated by a court.

Q: Can liquidated damages be reduced by a court?
A: Yes, a court may reduce the amount of liquidated damages if it finds that the agreed-upon amount is excessive or unfair.

Q: Do liquidated damages need to be agreed upon in writing?
A: While it is generally recommended to have the agreement for liquidated damages in writing, oral agreements may also be enforceable in certain circumstances.

Q: Are there any limitations on liquidated damages in Washington?
A: Yes, Washington law imposes a limitation on residential leases, where liquidated damages cannot exceed an amount equal to two months' rent.