In India, the law on liquidated damages is provisioned under Section 74 of the Contract Act, 1872 (for short ‘Act’). The provision has been interpreted variedly by the courts since its enactment. The earliest interpretation was laid down by the Apex Court in the case of Fateh Chand v. Balkishan Das [(1964) 1 SCR 515] (Fateh Chand Case), which is discussed in the instant article.