Stipulated Damages Flashcards
(3 cards)
UCC § 2-718. Liquidation or Limitation of Damages; Deposits
Damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or non feasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty.
Wassenaar v. Towne
Is the injury caused by the breach that is difficult or incapable of accurate estimation at the time of contract?
Burden is on the individual claiming the harm is capable of estimation
Are stipulated damages a reasonable forecast of the harm caused by the breach? Judge reasonability at the time of contracting
Lake River Corp v. Carborundum Co.
Individuals are allowed to assume risks thus judges should not be paternalistic about liquidated-damages clauses
