Introduction Generally speaking, liquidated damages are a sum of money specified in some contracts that are to be paid by one party to another as a compensation for intangible losses suffered by the latter due to breach of contract by the former. Since many a times damages are difficult to be estimated or computed, parties agree either for a specific amount or a percentage of the contract value to be payable by the defaulting party. Although liquidated damages are accepted in most of the jurisdictions, the extent to which such damages are allowed depend on provisions in the relevant regulations, the case law, or the discretion of courts. However, it is almost a settled practice that courts differentiate between liquidated