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I have had a parking ticket issued in a private car park for staying too long(I spent 1 1/2hr in Maplins).Fortunately the guy was there and agreed to cancel it when I complained.Looking at the ticket it says if I do not pay in 10 days they would charge £3 per day 'by way of liquidated damages'.Does anyone know what this means exactly?
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If all else fails, try Google ...this makes some sense:
www.lectlaw.com/def/l045.htm
Essentially it's a late payment charge.
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This is atrem used on the contracting of goods and or service. The precise explanation is "Genuine pre estimate of cots incurred as a result of the suppliers/contractors delay in delivery" This is important as only The Court can impose DAMAGES. It is in effcet a late delivery/payment cahrge but cant be described as such.
Hope this helps
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"liquidated damages" are where two parties to a contract agree an accurate pre-estimate to be paid in the event of a certain type of breach - normally late performance. Usually in the form of £/day or £/week and frequently capped (also called an exclusion clause). Has to be an accurate pre-estimate to be allowed by law, if not could be challenged and thrown out by a court but then you would be faced with unliquidated damages.
"unliquidated damages" are the sort available under common law "put me where I would have been if you had not committed the breach" and are limited only by the loss suffered.
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Motormark and Ian are spot on, Liquidated Damages are a genuine pre estimate of damages that both parties are aware of prior to entering the contract.
Most Construction Contracts have them (they're called Liquidated and Ascertained Damages or LAD's for short) and the Damages would be for example in a refurbishment of student accomodation the cost of provising alternative accomodation.
In this case though, it's hard to know what the £3 per day represents - loss of interest possibly? In any case, the damages should be known to both parties before you enter into the contract i.e. park in their facility, so are the Liquidated Damages displayed on their Terms and Conditions at the ticket machine? If not, how could you have been aware of them and therefore there may an argument for disputing them. But that's for the lawyers on here.
But then again, it's only £3 per day.
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The important distinction is between liquidated damages and a penalty clause. The courts will not enforce penalty clauses, but will enforce liquidated damages clauses. To be a liquidated damages clause (and not an unenforceable penalty) the clause has to be a genuine pre-estimate of the innocent parties losses as a result of the breach.
You often see these clauses in the context of late payment. A contractual rate of interest on a late debt is fine, but not if it is excessive (in which case it becomes a penalty)
You didn't say what the parking fine was, but the daily rate charge probably adds up to a horrendous APR. I think this is probably a penalty.
Interestingly, it is unenforceable for a supplier to have a term which says that there will be a 10% surcharge on late payments, but is is perfectly fine for a supplier to put his prices up 10% and then offer a 10% discount for early payment (this would be an incentive, not a penalty)
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Liquidated damages - literally what it says -
Damages; the losses, expenses, effort, time, costs, etc. I estimate I will suffer
liquidated; turned into an amount of cash.
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