In the case of Arrowhead School District v$.$ Klyap, the Supreme Court of Montana explained that for a liquidated damages provision to be enforceable according to the RESTATEMENT $356$ and other treatises, "damages must be in relation to the damages the parties anticipated when the contract was executed or in relation to actual damages resulting from the breach."

A The Supreme Court of Montana then held that "while the $20\%$ liquidated damages clause is definitely harsher than most, it is still within Klyap's reasonable expectations and is not unduly