Based upon the case information given only on this page how would the following questions be answerwd.
1) What evidence could the Plaintiff have presented that might have changed the outcome of the case?
2) The courts place burden of providing the unreasonableness of a liquidated-damage clause on the breaching party. which stakeholder benefit? which stakeholder are at a disadvantage?
CASE 14-3 FACTS: The plaintiff hired the defendant to renovate his Concion contract but failed to do initial demolition resorting to litigation, by setting the measure of damages at work gmined under the contract. The contract contained the outset, before a breach even occurs. Such provisions are The owner further agrees that if he shall cancel this Contract for any reason whatsoever, then he shall the contractor as fired and liquidated damages, withow prof of loss, the sum of money equal to Thirty Five Per The courts place the burden of proving the unreasonableness of a liquidated-damage clause on the breaching party. Which stakeholders benefit by this approach? Which stakeholders are dis. resolution of a breach-of-contract dispute and give the per- ties an opportunity to resolve the damage question without S. BROOKE PURLL, INC., TIA PURLL CONSTRUCTION V. PATRICK DARRELL VAILES DISTRICT OF COLUMBIA COURT OF APPEALS 850 A.2d 1135 (2004) house and paid him a $5,000 initial payment under the a close staring: crn (35%) of the full contract price hereinabove stated Furthermore, if it becomes necessary for the Contrac for to file suit or take other legal action on this contract because of a breach on the part of the party of the second part, the party of the second part agrees to pay reason- able attorney fees and court cost, especially appropriate when the parties enter into a contract in which the damages are uncertain in amount and cannot be easily ascertained. Thus, the courts tend to uphold these clauses unless they are clearly unreasonable. The liquidated sum must simply bear a reasonable relation to the dam- ages foreseeable at the time the contract was made. The burden of proof is on the breaching party to demonstrate that the damage clause is disproportionate to the foresee- able damages In this case, the plaintiff provided no such evidence. The plaintill sued the defendant contractor for return of testified without contradiction that two-thirds of the con The full contract price was $103.148.71. The contractor his deposit, and the defendant counterclaimed for $36,102 tract price represented materials and labor and one-third and attorney fees, the amount that would be required under represented his profit. The contractor explained that he the liquidated-damage clause. The trial court held that consulted the Ames Construction Guide for the D.C. met- the plaintiff had breached the contract, but it found the ropolitan area, which was customarily used in the indus- liquidated damage clause to be an unenforceable penalty try for pricing construction jobs, in establishing his price. clause and awarded the contractor $1,722. The defendant Thus, there was no evidence that the clause was unreason- appealed. able. The trial court had inappropriately struck the clause down because the contractor had failed to introduce evi- ISSUE: Was the clause imposing a payment of 35 percent dence of his out-of-pocket expenses, such proof is not of the contract value for breach by the owner a penalty required to uphold a liquidated-damage clause. clause or a valid liquidated-damage clause? DECISION AND REMEDY: The lower court's decision REASONING: Today, the trend is toward furthering free was reversed, in favor of the defendant contractor. dom of contract through the enforcement of stipulated- damage provisions as long as they do not clearly disregard SIGNIFICANCE OF THE CASE: This case illustrates the principle of compensation. Such clauses simplify the the preference for upholding liquidated-damage clauses. CRITICAL THINKING What evidence could the plaintiff have presented that might have changed the outcome of this case? ETHICAL DECISION MAKING advantaged by it? 283
