What term describes damages awarded by a court that were not pre-agreed in the contract?

• A. Liquidated damages
• B. Unliquidated damages
• C. Specific performance
• D. Declaratory judgement

Answer: (B)

Damages that aren’t pre-set in the contract are unliquidated damages. A liquidated damages clause fixes a specific amount to be paid if a breach occurs, representing the parties’ agreed estimate of potential losses. When there’s no such clause, or it’s unenforceable, the court awards actual damages based on proven losses, which are unliquidated.

Specific performance is a remedy that orders the party to fulfill the contract rather than paying money, and a declaratory judgment is a court ruling that interprets rights or contract provisions without awarding damages.