Liquidated damages refer to a predetermined sum of money that is payable by one party to the other in the event of a breach of contract. There are several synonyms for liquidated damages, including penalty clauses, damage provisions, compensation clauses, and forfeiture clauses. Penalty clauses refer to a sum of money intended to punish the breaching party for failing to meet the contract's terms. Damage provisions enhance the rights of the non-breaching party by obligating the breaching party to pay a pre-determined amount. Compensation clauses compensate the non-breaching party in full or in part for the damages resulting from the breach. Forfeiture clauses entail the loss of a specified amount of money or property in the event of a breach of contract.