Effects of Contracts - Damages; Stipulated Damages

Question 1

General Principles

Answer 1

secondary obligation for the purpose of enforcing the principal one.
- Parties are generally free to stipulate damages in advance
- •Known in the common law “liquidated” damages
- An “accessory” obligation
§ •Nullity of principal contract results in nullity of stipulated damages clause.
- •Obligor may demand stipulated damages or performance (but not both).
- •If performance is excused, no damages are owed.
- •The obligee need not prove damages.
- •The obligee is relieved from the duty to mitigate.