Liquidate \Liq"ui*date\ (l[i^]k"w[i^]*d[=a]t), v. t. [imp. & p. p. Liquidated (-d[=a]`t[e^]d); p. pr. & vb. n. Liquidating.]

[LL. liquidatus, p. p. of liquidare to liquidate, fr. L. liquidus liquid, clear. See Liquid.]

1. (Law) To determine by agreement or by litigation the precise amount of (indebtedness); or, where there is an indebtedness to more than one person, to determine the precise amount of (each indebtedness); to make the amount of (an indebtedness) clear and certain.

A debt or demand is liquidated whenever the amount due is agreed on by the parties, or fixed by the operation of law. --15 Ga. Rep. 321.

If our epistolary accounts were fairly liquidated, I believe you would be brought in considerable debtor. --Chesterfield.

2. In an extended sense: To ascertain the amount, or the several amounts, of, and apply assets toward the discharge of (an indebtedness). --Abbott.

3. To discharge; to pay off, as an indebtedness.

Friburg was ceded to Zurich by Sigismund to liquidate a debt of a thousand florins. --W. Coxe.

4. To make clear and intelligible.

Time only can liquidate the meaning of all parts of a compound system. --A. Hamilton.

5. To make liquid. [Obs.]

Liquidated damages (Law), damages the amount of which is fixed or ascertained. --Abbott.

Source: Webster's Revised Unabridged Dictionary (1913)