liquidated damage clause in New York

1985As a general rule, where the delays are caused by the mutual fault of the parties, a liquidated damage clause is abrogated and each party must resort to an action to recover its actual damages (Mosler Safe Co. v Maiden Lane Safe Deposit Co., 199 NY 479 ; Babylon Assoc. v County of Suffolk, 101 AD2d 207 ).

1984But where the delays are caused by the mutual fault of the parties, the liquidated damage clause is abrogated and the party must resort to recovery for actual damages (Mosler Safe Co. v Maiden Lane Safe Deposit Co., 199 NY 479 ; Village of Canton v Globe Ind. Co., 201 App Div 820 ; Holland Torpedo Boat Co. v Nixon, 61 Misc 469 ).

1998Finally, “ ‘where there is doubt as to whether a provision constitutes an unenforceable penalty or a proper liquidated damage clause, it should be resolved in favor of a construction which holds the provision to be a penalty’ ” (Pyramid Centres & Co. v Kinney Shoe Corp., supra, at 627, quoting Willner v Willner, 145 AD2d 236, 240-241 ).

1997Moreover, “where there is doubt as to whether a provision constitutes an unenforceable penalty or a proper liquidated damage clause, it should be resolved in favor of a construction which holds the provision to be a penalty” (Willner v Willner, 145 AD2d 236, 240-241 ; see, City of New York v Brooklyn & Manhattan Ferry Co., 238 NY 52, 56 ; Vernitron Corp. v CF 48 Assocs., 104 AD2d 409 ).

1997Moreover, “where there is doubt as to whether a provision constitutes an unenforceable penalty or a proper liquidated damage clause, it should be resolved in favor of a construction which holds the provision to be a penalty” (Willner v Willner, 145 AD2d 236, 240-241 ; see, City of New York v Brooklyn & Manhattan Ferry Co., 238 NY 52, 56 ; Vernitron Corp. v CF 48 Assocs., 104 AD2d 409 ).

1989However, where there is doubt as to whether a provision constitutes an unenforceable penalty or a proper liquidated damage clause, it should be resolved in favor of a construction which holds the provision to be a penalty (City of New York v Brooklyn & Manhattan Ferry Co., 238 NY 52, 56 ; Vernitron Corp. v CF 48 Assocs., 104 AD2d 409 ; National Telecanvass Assocs. v Smith, 98 AD2d 796 , supra; see also, Schiffman v Deluxe Caterers, 100 AD2d 846 ).

1985Co., 34 NY2d 470, 472-473 .) If the amount stipulated in the liquidated damage clause is manifestly disproportionate to the actual damage, then its purpose is not to 'provide fair compensation but to secure performance by the compulsion of the very disproportion.’ (Truck Rent-A-Center v Puritan Farms 2nd, 41 NY2d 420, 424 .) Thus, the rule has evolved that when the damages flowing from the breach of a contract are easily ascertainable; or the damages fixed are plainly disproportionate to the injury, the stipulated sum will be treated as a penalty (Mosler Safe Co. v Maiden Lane Safe Deposit Co.

1984Co., 34 NY2d 470, 472-473 .) If the amount stipulated in the liquidated damage clause is manifestly disproportionate to the actual damage, then its purpose is not to “provide fair compensation but to secure performance by the compulsion of the very disproportion.” (Truck Rent-A-Center v Puritan Farms 2nd, 41 NY2d 420, 424 .) Thus, the rule has evolved that when the damages flowing from the breach of a contract are easily ascertainable, or the damages fixed are plainly disproportionate to the injury, the stipulated sum will be treated as a penalty (Mosler Safe Co. v Maiden Lane Safe Deposit Co.

1984(See Seidlitz v Auerbach, 230 NY 167, 172 .) In light of these principles, we conclude that the liquidated damage clause is valid.

1976Under such circumstances, reliance on the liquidated damage clause was impermissible since the damages flowing from a breach of this contract can be easily established (Seidlitz v Auerbach, 230 NY 167, 173 ; Weinstein & Sons v City of New York, 264 App Div 398, 400 , affd 289 NY 741 ).

1984But where the delays are caused by the mutual fault of the parties, the liquidated damage clause is abrogated and the party must resort to recovery for actual damages (Mosler Safe Co. v Maiden Lane Safe Deposit Co., 199 NY 479 ; Village of Canton v Globe Ind. Co., 201 App Div 820 ; Holland Torpedo Boat Co. v Nixon, 61 Misc 469 ).

1984But where the delays are caused by the mutual fault of the parties, the liquidated damage clause is abrogated and the party must resort to recovery for actual damages (Mosler Safe Co. v Maiden Lane Safe Deposit Co., 199 NY 479 ; Village of Canton v Globe Ind. Co., 201 App Div 820 ; Holland Torpedo Boat Co. v Nixon, 61 Misc 469 ).

2005In refusing to proceed, defendants were merely asserting their contractual right to a reasonably quick closing that did not involve a mortgage, and the consequences of failing to appear at the scheduled closing with the necessary cash should have been known to plaintiff, who acknowledged in the contract that he was a “sophisticated real estate investor” represented by “knowledgeable counsel” (cf. 1029 Sixth, LLC v Slip-On Shoes, Inc., 9 AD3d 142, 148-149 [2004], appeal dismissed 4 NY3d 795 [2005]).

1998It does not avail respondent to argue that the subject contract provision is a liquidated damage clause that, as a matter of New York substantive law, is unenforceable absent proof of petitioner’s actual loss (see, Matter of Silverman [Benmor Coats], 61 NY2d 299, 307-308 ).

1995The second counterclaim sounding in fraud fails as it merely is an improper attempt to recast the breach of contract claim in terms of fraud (see, Tesoro Petroleum Corp. v Holborn Oil Co., 108 AD2d 607 , appeal dismissed 65 NY2d 637 ).

1992(Burnside Bargain Store v Carmel, 156 AD2d 248, 249 ; see also, Chimart Assocs. v Paul, 66 NY2d 570 , supra.) Similarly, each agreement contains a liquidated damage clause setting forth the seller’s agreed upon remedy in the event the purchaser breached the agreement.

1991(Matter of Dunn, 205 NY 398, 402 .) "He [an attorney] is an officer of the court and is judged as such, and technical contracturai rights must yield to his duty as such officer.” (Matter of Friedman, 136 App Div 750, 752 , affd 199 NY 537 .) "Contracts between attorney and client, as a matter of public policy, are of special interest and concern of the courts.

1991(Matter of Dunn, 205 NY 398, 402 .) "He [an attorney] is an officer of the court and is judged as such, and technical contracturai rights must yield to his duty as such officer.” (Matter of Friedman, 136 App Div 750, 752 , affd 199 NY 537 .) "Contracts between attorney and client, as a matter of public policy, are of special interest and concern of the courts.

1991(Matter of Dunn, 205 NY 398, 402 .) "He [an attorney] is an officer of the court and is judged as such, and technical contracturai rights must yield to his duty as such officer.” (Matter of Friedman, 136 App Div 750, 752 , affd 199 NY 537 .) "Contracts between attorney and client, as a matter of public policy, are of special interest and concern of the courts.

1991Corp., 38 NY2d 516 ) then a fortiori, the presence of a liquidated damage clause in a retainer agreement will meet with heightened caution, as the attorney-client relationship is "so personal and confidential” that it is subjugated to principles that "would not prevail in the case of ordinary contracts”.

1989However, where there is doubt as to whether a provision constitutes an unenforceable penalty or a proper liquidated damage clause, it should be resolved in favor of a construction which holds the provision to be a penalty (City of New York v Brooklyn & Manhattan Ferry Co., 238 NY 52, 56 ; Vernitron Corp. v CF 48 Assocs., 104 AD2d 409 ; National Telecanvass Assocs. v Smith, 98 AD2d 796 , supra; see also, Schiffman v Deluxe Caterers, 100 AD2d 846 ).

1989Concrete Corp. v Brady & Co. ( 104 AD2d 181, 183-184 , affd 66 NY2d 970 ), as follows: "If the amount stipulated in the liquidated damage clause is manifestly disproportionate to the actual damage, then its purpose is not to 'provide fair compensation but to secure performance by the compulsion of the very disproportion.’ * * * Thus, the rule has evolved that when the damages flowing from the breach of a contract áre easily ascertainable, or the damages fixed are plainly disproportionate to the injury, the stipulated sum will be treated as a penalty * * * but, where they are uncertain, or diff

1989In addition, the Supreme Court properly enforced the liquidated damage clause set forth in the original agreement since it is clear that the parties contemplated the fulfillment of an entire indivisible contract (Barden & Robeson Corp. v Timmerman, 116 AD2d 814, 816 ; Tantleff v Truscelli, 110 AD2d 240, 244 , affd 69 NY2d 769 ).

1989In addition, the Supreme Court properly enforced the liquidated damage clause set forth in the original agreement since it is clear that the parties contemplated the fulfillment of an entire indivisible contract (Barden & Robeson Corp. v Timmerman, 116 AD2d 814, 816 ; Tantleff v Truscelli, 110 AD2d 240, 244 , affd 69 NY2d 769 ).

1989Furthermore, the sellers are entitled to plaintiff’s down payment pursuant to the liquidated damage clause of the contract (see, Maxton Bldrs. v Lo Galbo, 68 NY2d 373, 381-382 ).

1989Concrete Corp. v Brady & Co. ( 104 AD2d 181, 183-184 , affd 66 NY2d 970 ), as follows: "If the amount stipulated in the liquidated damage clause is manifestly disproportionate to the actual damage, then its purpose is not to 'provide fair compensation but to secure performance by the compulsion of the very disproportion.’ * * * Thus, the rule has evolved that when the damages flowing from the breach of a contract áre easily ascertainable, or the damages fixed are plainly disproportionate to the injury, the stipulated sum will be treated as a penalty * * * but, where they are uncertain, or diff

1989In addition, the Supreme Court properly enforced the liquidated damage clause set forth in the original agreement since it is clear that the parties contemplated the fulfillment of an entire indivisible contract (Barden & Robeson Corp. v Timmerman, 116 AD2d 814, 816 ; Tantleff v Truscelli, 110 AD2d 240, 244 , affd 69 NY2d 769 ).

1986We concur with Special Term’s decision that the Coles are not entitled to a rescission of the contract of sale on the ground that it was void due to Ernest Lawas’ incompetency at the time it was signed on his behalf by his wife under a power of attorney. * The case of Bankers Trust Co. v Martin ( 51 AD2d 411 ) is dispositive.

1985As a general rule, where the delays are caused by the mutual fault of the parties, a liquidated damage clause is abrogated and each party must resort to an action to recover its actual damages (Mosler Safe Co. v Maiden Lane Safe Deposit Co., 199 NY 479 ; Babylon Assoc. v County of Suffolk, 101 AD2d 207 ).