Which of the following best describes "liquidated damages"?

Liquidated damages refer to a specific amount of money that parties agree upon in a contract as compensation in the event of a breach. This predetermined figure is established at the time of forming the contract, intended to provide a clear and agreed-upon measure of damages should one party fail to fulfill their contractual obligations. The key aspect of liquidated damages is that they provide certainty and help parties understand potential liabilities without needing to calculate actual damages after a breach occurs. This is particularly useful in contractual situations where it may be difficult to estimate the losses that could arise from a breach.

Other options focus on various concepts often related to breach and remedies but do not accurately define liquidated damages. For instance, compensation calculated after a breach (option A) and damages awarded after court proceedings (option D) may refer to different types of damages in general, such as compensatory damages or punitive damages, that are not predetermined. Injunctive relief (option C) is a legal remedy that requires a party to do or refrain from doing specific acts, which does not align with the idea of financial compensation stipulated in advance.