Legal Definitions - liquidated claim

A liquidated claim refers to a demand for a specific, fixed amount of money that is either already agreed upon, clearly stated in a contract, or can be precisely calculated using an objective standard or formula. The amount is not subject to estimation or a judge's discretion to determine its value, unlike claims for general damages like pain and suffering. Essentially, it's a claim where the exact monetary value is known or easily knowable.

• Example 1: Unpaid Rent

  Imagine a tenant who has a lease agreement stating they must pay $1,200 in rent on the first of each month. If the tenant fails to pay rent for two consecutive months, the landlord has a liquidated claim for $2,400 ($1,200 x 2 months). The amount is fixed and easily calculable based on the clear terms of the lease agreement, leaving no ambiguity about the sum owed.

• Example 2: Overdue Invoice for Services Rendered

  A web developer completes a project for a client, and their signed contract clearly specifies a total fee of $7,500 for the work. Upon completion, the developer sends an invoice for this amount, but the client fails to pay. The developer's demand for $7,500 is a liquidated claim because the exact sum was pre-determined and agreed upon by both parties in the contract, making it a specific and easily ascertainable amount.

• Example 3: Breach of a Promissory Note

  Consider a situation where someone borrowed $5,000 from a bank, signing a promissory note that clearly outlines the principal amount, an annual interest rate of 6%, and a fixed repayment schedule. If the borrower defaults and misses a payment, the bank's claim for the outstanding principal plus the precisely calculated accrued interest is a liquidated claim. Both the principal and the interest are determinable based on the explicit terms of the promissory note, leaving no room for subjective valuation of the debt.