liquidated damage clause in Florida

1985Later, the Supreme Court in Hutchison v. Tomkins, 259 So.2d 129 (Fla. 1972), receded from the rationale of Pembroke v. Caudill, and adopted the reasoning of Hyman v. Cohen, 73 So.2d 393 (Fla. 1954): [I]n Hyman the Court concluded that it was necessary for the damages to be readily ascertainable at the time of the drawing of the contract in order for a liquidated damage clause to constitute a penalty.

1977That rationale was expressed as follows: The better result ... is to allow the liquidated damage clause to stand if the damages are not readily ascertainable at the time the contract is drawn, but to permit equity to relieve against forfeiture if it appears unconscionable in light of the circumstances existing at the time of breach. 259 So.2d 129 at 132 .

1985The Florida Supreme Court stated in Pembroke v. Caudill, 160 Fla. 948 , 37 So.2d 538 (1948), that when damages were readily ascertainable at the time of breach, then a liquidated damage clause would be construed as a penalty.

1985The Florida Supreme Court stated in Pembroke v. Caudill, 160 Fla. 948 , 37 So.2d 538 (1948), that when damages were readily ascertainable at the time of breach, then a liquidated damage clause would be construed as a penalty.

1985Later, the Supreme Court in Hutchison v. Tomkins, 259 So.2d 129 (Fla. 1972), receded from the rationale of Pembroke v. Caudill, and adopted the reasoning of Hyman v. Cohen, 73 So.2d 393 (Fla. 1954): [I]n Hyman the Court concluded that it was necessary for the damages to be readily ascertainable at the time of the drawing of the contract in order for a liquidated damage clause to constitute a penalty.

1980Although not specifically related to the facts before it, we believe the following language was intended for the instruction of the bench and bar: The better result, in our judgment, as Hyman [ v. Cohen, 73 So.2d 393 (Fla.)] contemplates, is to allow the liquidated damage clause to stand if the damages are not readily ascertainable at the time the contract is drawn, but to permit equity to relieve against the forfeiture if it appears unconscionable in light of the circumstances existing at the time of breach.

2001In Public Health Trust of Dade County v. Romart Construction Inc., 577 So.2d 636 (Fla. 3d DCA 1991), this Court reversed a trial court's refusal to enforce a liquidated damage clause similar to the one at issue here.

1997In Lefemine v. Baron, 573 So.2d 326 (Fla. 1991), the supreme court invalidated a liquidated damage clause within a real estate contract that permitted the seller to choose between retaining a prepaid security deposit or bringing an action for actual damages.

1990Although we do not take issue with this general principle, we find that the facts of this ease are governed by Alvis v. Investment I, Inc., 504 So.2d 508 (Fla. 2d DCA 1987) and Makris v. Williams, supra. Alvis and Makris turn on the finding that deposits are actually made where there is a representation that such deposit has in fact been made.

1990Although we do not take issue with this general principle, we find that the facts of this ease are governed by Alvis v. Investment I, Inc., 504 So.2d 508 (Fla. 2d DCA 1987) and Makris v. Williams, supra. Alvis and Makris turn on the finding that deposits are actually made where there is a representation that such deposit has in fact been made.

1988Hutchison v. Tompkins, 259 So.2d 129 (Fla. 1972); McNorton v. Pan American Bank of Orlando, 387 So.2d 393 (Fla. 5th DCA 1980).

1987Moreover, a liquidated damage clause will not be enforced "if circumstances demonstrate that it would be unconscionable to allow the seller to retain the sum in question as liquidated damages." Berndt, 465 So.2d at 1265 .

1985Hutchison ; Bruce Builders, Inc. v. Goodwin, 317 So.2d 868 (Fla. 4th DCA 1975).

1978Fletcher v. Laguna Vista Corporation, 275 So.2d 579 (Fla. 1st DCA 1973)." * * * * * * "Count II of the amended complaint is not subject to dismissal on the basis of the liquidated damage clause of the contract attached as Exhibit A. See Poinsettia Dairy Products v. Wessell Co., 166 So. 306 (Fla. 1936); Stenor, Inc. v. Lester, 58 So.2d 673 (Fla. 1952); and Nicholas v. Miami Burglar Alarm Co., Inc., 266 So.2d 64 (3d DCA 1972)." We agree with those principles.

1978Fletcher v. Laguna Vista Corporation, 275 So.2d 579 (Fla. 1st DCA 1973)." * * * * * * "Count II of the amended complaint is not subject to dismissal on the basis of the liquidated damage clause of the contract attached as Exhibit A. See Poinsettia Dairy Products v. Wessell Co., 166 So. 306 (Fla. 1936); Stenor, Inc. v. Lester, 58 So.2d 673 (Fla. 1952); and Nicholas v. Miami Burglar Alarm Co., Inc., 266 So.2d 64 (3d DCA 1972)." We agree with those principles.

1978Fletcher v. Laguna Vista Corporation, 275 So.2d 579 (Fla. 1st DCA 1973)." * * * * * * "Count II of the amended complaint is not subject to dismissal on the basis of the liquidated damage clause of the contract attached as Exhibit A. See Poinsettia Dairy Products v. Wessell Co., 166 So. 306 (Fla. 1936); Stenor, Inc. v. Lester, 58 So.2d 673 (Fla. 1952); and Nicholas v. Miami Burglar Alarm Co., Inc., 266 So.2d 64 (3d DCA 1972)." We agree with those principles.

1978Fletcher v. Laguna Vista Corporation, 275 So.2d 579 (Fla. 1st DCA 1973)." * * * * * * "Count II of the amended complaint is not subject to dismissal on the basis of the liquidated damage clause of the contract attached as Exhibit A. See Poinsettia Dairy Products v. Wessell Co., 166 So. 306 (Fla. 1936); Stenor, Inc. v. Lester, 58 So.2d 673 (Fla. 1952); and Nicholas v. Miami Burglar Alarm Co., Inc., 266 So.2d 64 (3d DCA 1972)." We agree with those principles.

1964Some recent cases, such as the case of Horton v. Cook, 181 Ark. 806 , 27 S.W.2d 1017 , 69 A.L.R. 709 , have deviated from the rules stated in the above quoted 69 A.L.R. annotation and have held, that in the event of a student’s inability to attend the school for medical reasons, the liquidated damage clause does not apply, the reasoning being that the performance of the contract was prevented by a cause beyond the control of either party and not in the contemplation of the parties.

1964Some recent cases, such as the case of Horton v. Cook, 181 Ark. 806 , 27 S.W.2d 1017 , 69 A.L.R. 709 , have deviated from the rules stated in the above quoted 69 A.L.R. annotation and have held, that in the event of a student’s inability to attend the school for medical reasons, the liquidated damage clause does not apply, the reasoning being that the performance of the contract was prevented by a cause beyond the control of either party and not in the contemplation of the parties.