REMEDIES: DAMAGES FOR BREACH OF CONTRACT Flashcards
DAMAGES FOR BREACH OF CONTRACT: LIQUIDATED DAMAGES AND PENALTIES
THESE ARE DAMAGES TO BE RECOVERED BY ONE PARTY WITHOUT PROOF OF ACTUAL LOSS IN THE EVENT THE OTHER PARTY BREACHES THE CONTRACT.
WHAT IS THE TEST FOR A LIQUIDATED DAMAGES CLAUSE TO BE ENFORCEABLE?
THERE IS A TWO PRONG TEST THAT MUST BE MET AT THE TIME OF CONTRACTING.
- THE AMOUNT OF LIQUIDATED DAMAGES WAS REASONABLE, BEARING SOME RELATION TO THE DAMGES THAT MIGHT BE SUSTAINED, AND
- ACTUAL DAMAGES WERE UNCERTAIN IN AMOUNT AND WOULD BE DIFFICULT TO PROVE.
UCC AND RESTATEMENT ADD A THIRD PRONG. UCC AND RESTATEMENT REFUSE TO ENFORCE A CLAUSE UNDER WHICH THE LIQUIDATED DAMAGES ARE DISPROPORTIONATE TO THE ACTUAL DAMAGES INCURRED BY A PARTY.
A FEW COURTS WON’T ENFORCE THE CLAUSE IF THE PARTY DOES NOT SUFFER ANUY DAMAGES AS A CONSEQUENCE OF THE BREACH.
IF THE LIQUIDATED DAMAGES CLAUSE IS UNENFORCEABLE, RECOVERY IS LIMITED TO ANY ACTUAL DAMAGES THAT A PARTY CAN PROVE.
FL POINT OF LAW ON LIQUIDATED DAMAGES AND PENALTIES - WHAT IS THE FLORIDA RULE ON ENFORCEMENT OF A LIQUIDATED DAMAGES PROVISION?
A CONTRACT THAT PROVIDES FOR EITHER LIQUIDATED DAMAGES OR A LAWSUIT TO ASCERTAIN ACTUAL DAMAGES IS NOT PERMISSIBLE IN FL.
THE CHOICE BETWEEN THE TWO DESTROYS THE CHARACTER OF THE FORFEITURE AS AGREED DAMAGES AND THE FORFEITURE BECOMES A PENALTY.
BREACH OF CONTRACT AND DAMAGES - PUNITIVE DAMAGES -
ARE THESE AVAILABLE IN A CONTRACT ACTION?
RARELY AVAILABLE IN CONTRACT ACTIONS. SOME STATES PERMIT THESE DAMAGES WHEN THE CONDUCT CONSTITUTING THE BREACH IS ALSO A TORT FOR WHICH PUNITIVE DAMAGES CAN BE RECOVERED.
BREACH OF CONTRACT AND DAMAGES - HOW DOES FL HANDLE PUNITIVE DAMAGES IN A CONTRACT ACTION?
FLORIDA FOLLOWS THE RESTATEMENT WITH REGARD TO RECOVERY OF PUNITIVE DAMAGES IN A CONTRACT ACTION. IF THERE IS AN UNDERLYING TORT WHERE PUNTIVIES WOULD BE RECOVERABLE, THEN PUNITIVE DAMAGES WOULD BE RECOVERABLE.
WHAT IS THE FLORIDA RULE ON AWARDING ATTORNEY FEES IN A BREACH OF CONTRACT ACTION?
IN FLORIDA, AS IN MOST JURISDICTIONS, AN AWARD OF ATTORNEY FEES IS NOT PERMITTED IN A CONTRACT ACTION UNLESS AUTHORIZED BY STATUTE OR BY THE CONTRACT ITSELF.
IF A CONTRACT CONTAINS A PROVISION ALLOWING ATTORNEY FEES TO A PARTY WHEN THE PARTY IS REQUIRED TO TAKE ACTION TO ENFORCE THE CONTRACT, THE COURT MAY ALSO ALLOW REASONABLE ATTORNEY FEES TO THE OTHER PARTY WHEN THAT PARTY PREVAILS IN ANY ACTION WHETHER AS PL OR D WITHOUT RESPECT TO THE CONTRACCT.
BREACH OF CONTRACT AND DAMAGES - SPECIFIC PERFORMANCE
WHAT ARE THE LIMITATIONS ON THE REMEDY OF SPECIFIC PERFORMANCE?
EVEN IF THE REMEDY IS INADEQUATE, SPECIFIC PERFORMANCE WILL NOT BE GRANTED WHEN THE CT CANNOT SUPERVISE ENFORCEMENT.
CTS RARELY GRANT SPECIFIC PERFORMANCE OF CONTRACTS FOR PERSONAL SERVICES, ALTHOUGH THEY MAY RESTRAIN THE BREACHING PARTY FROM WORKING FOR ANOTHER WHEN THE CONTRACT CONTAINS A NON-COMPETE CLAUSE (LUMLEY DOCTRINE)
BREACH OF CONTRACT AND REMEDIES: ENFORCEMENT OF COVENANTS, NON-COMPETITON, NON SOLICITATION AND NON-DISCLOSURE/CONFIDENTIALITY
FL POINT OF LAW ON RESTRICTIVE COVENANTS:
IN FL, THE VIOLATION OF AN ENFORCEABLE RESTRICTIVE COVENANT CREATES A PRESUMPTION OF IRREPARABLE INJURY TO THE PARTY SEEKING ENFORCEMENT OF THE COVENANT.
A RESTRICTIVE COVENANT MUST BE EXPRESSLY CONTAINED IN A SIGNED CONTRACT.
COVENANT MUST BE REASONABLE IN TIME, GEOGRAPHIC AREA AND LINE OF BUSINESS. WHEN NOT PREDICATED UPON THE PROTECTION OF TRADE SECRETS OR AS A RESULT OF A SALE OF A BUSINESS, A RESTRAINT OF SIX MONTHS OR LESS IS PRESUMED TO BE REASONABLE.
THE PARTY SEEKING ENFORCEMENT OF THE RESTRICTIVE COVENANT MUST ALSO PLEAD AND PROVE IT HAS A LEGITIMATE BUSINESS INTEREST THAT JUSTIFIES THE NON-COMPETE CLAUSE. A LEGITIMATE BUSINESS INTEREST INCLUDES THE PROTECTION OF TRADE SECRETS OR CONFIDENTIAL BUSINESS INFORMATION, AS WELL AS GOODWILL ASSOCIATED WITH A SPECIFIC GEOGRAPHIC LOCATION OR A SPECIFIC MARKETING OR TRADE AREA.
