Liquidated Damage Clauses – H1B Employee Contracts What is a Liquidated Damages Clause Many (if not most) contracts, including those between an employee and their employer, contain a liquidated damages clause. Such a clause stipulates what the penalty will be in the event that a party breaches the contract. Because, however, breach of contract is not a crime and in many instances is, in fact, encouraged, liquidated damages clauses may only compensate the non-breaching party, and may not impose penalties for the breach. Indeed, the Restatement (Second) of Contracts states: “Damages for breach…
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