Clients & Friends,
Here is an interesting recent case on liquidated provided by John Perten of Sheehan Phinney Bass & Green PA.
In a decision recently handed down by the MA appeals court, the Court reiterated the analysis on how to determine whether a liquidated damage clause will be upheld as enforceable or stricken down as an unenforceable penalty. Though this case does not break any new ground, it is a good reminder that if liquidated damage clauses are to be enforceable, you must look to the time of contracting to determine whether the potential damages are difficult to ascertain and whether the sum included within the Contract as calculated represents a "reasonable forecast of damages expected to occur in the event of a breach."
The case involves the breach of a development agreement. Please click on the attachment below for the courts decision on the Nantasket Beach front Condominiums, LLC v. Hull Redevelopment Authority case. It is well worth the read.