Stock Solution is a “stock photo agency” that leases photographic transparencies produced by professional photographers for use in media advertising. Between October 1, 1994, and May 31, 1995, Stock Solution delivered Axiom 107 color transparencies to be used in Axiom’s advertising. The contracts provided that in the event the transparencies were not returned by the specified “return date,” Axiom would pay the following fees:
(1) An initial “service charge” of $30,
(2) “Holding fee[s]” in the amount of “$5.00 per week per transparency”,
(3) “Service fees” at a rate of “one and one-half percent per month” on unpaid balances of invoices beginning 30 days after invoice date, and
(4) Reimbursement for loss or damage of each “original transparency” in the amount of $1,500.
Axiom failed to return 37 of the 107 transparencies in breach of the contracts. Of the 37 missing transparencies, 36 were original color transparencies and 1 was a duplicate color transparency. Stock Solution filed suit seeking damages
(1) For the 36 missing original color transparencies, the agreed liquidated value of $54,000 plus sales tax of $3,294;
(2) For the 1 missing duplicate color transparency, $1 plus sales tax of $0.06;
(3) Holding fees on the 37 missing transparencies in the amount of $23,914.83;
(4) Service fees and charges as provided for in the contracts; and
(5) Attorney fees.
Discuss whether the liquidated damage clause was enforceable under the law. [Bair v Axiom Design, LLC, 20 P3d 388 (Utah)]