Example
For example, suppose Neal Townsend agrees to lease a store-front to Richard Odness, from which Richard intends to sell jewelry. If Neal breaches the contract by refusing to lease the store-front at the appointed time, it will be difficult to determine what profits Richard will have lost because the success of newly created small businesses is highly uncertain. This, therefore, would be an appropriate circumstance for Richard to insist upon a liquidated damages clause in case Neal fails to perform.
In the case of construction contracts, courts have occasionally refused to enforce liquidated damages provisions, choosing to follow the Doctrine of Concurrent Delay when both parties have contributed to the overall delay of the project.
Read more about this topic: Liquidated Damages
Famous quotes containing the word example:
“Our intellect is not the most subtle, the most powerful, the most appropriate, instrument for revealing the truth. It is life that, little by little, example by example, permits us to see that what is most important to our heart, or to our mind, is learned not by reasoning but through other agencies. Then it is that the intellect, observing their superiority, abdicates its control to them upon reasoned grounds and agrees to become their collaborator and lackey.”
—Marcel Proust (1871–1922)