This a definition of liquidated damages. Calculated in advance of the event occurring ie pre-contract
and thus agreed by the parties in advance. Meaningful advance calculations (estimates) must be
available to enforce legally.
The term and the spirit of 'penalty clause' is discouraged in English law - damages should be aimed at
returning the damaged party back into the position they would have been in, had a wrong not been
done.
Unliquidated damages can only be awarded by a court after the event, and should not be relied up-
on.
An example of a quantum meruit award can be found in the British Steel v Cleveland Bridge (1984)
case - a rare occurrence, and again something which must not be relied upon.
