Why is a single fixed sum payable for any breach, however minor, often treated as a penalty?
QUESTION
What weight does the parties' label of 'liquidated damages' or 'penalty' carry?
QUESTION
Under the Restatement (Second), when is a liquidated damages clause enforceable?
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ANSWER
When the amount is reasonable in light of the anticipated or actual loss and the difficulty of proving loss. Reasonableness may be measured either at formation or by the loss actually caused.