A pre-agreed amount of compensation specified in the contract for breach. Under Section 74 of the Indian Contract Act, Indian courts can reduce this amount if it's disproportionate — unlike some other countries where the agreed amount is final.
Your freelance contract says 'if the designer fails to deliver on time, they shall pay ₹50,000 as liquidated damages.' If the total project fee is only ₹30,000, a court would likely reduce this as it's clearly disproportionate.
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