Economists believe that if the legal remedy for breach is expectation damages, the idea of efficient breach allows us to forecast when parties will choose to breach a contract. On the other hand, the economic premise of rational wealth-maximizing actors fails to reflect significant nonmonetary values and incentives that impact behavior in predictable ways. People act following shared community norms, such as the moral norm of honoring pledges, when interpersonal duties are informal or underspecified. However, when the parties specify or otherwise formalize punishments for uncooperative behavior, it becomes more strategic and self-interested. The remedy for breach is made apparent with a liquidated-damages clause. This article will highlight the issues about the cure for breach in cases where liquidate damages clause is exploited, focusing on the Common law and precedents by eminent judges, including Pakistan’s legislation.

1. Introduction
2. Whether Liquidated Damages Ended upon the Termination ofthe Contract?
3. When Liquidated Damages Become Penalty?
4. The Concept of Liquidated Damages in Pakistan.
5. Role of Cap in Liquidated Damages Clause
6. Conclusion
References

• Kashif Imran Zadi(Assistant Professor in Law; Acting Director at School of Law and Policy of the University)
• Ahmad Abdul Rehman Khan(Advocate of High Court.)
• Usman Hameed(Professor/Dean of Law School at the Bahria University)
• Khushbakht Qaiser(Assistant Professor at School of Law and Policy of the University)
• Zarfishan Qaiser(Assistant Professor at University Law College of the University)