Permissible Damages Following Breach of Commercial Tenant Agreements
In their New York Court of Appeals Roundup, Linton Mann III and William T. Russell Jr. discuss a recent decision in which the court unanimously reaffirmed the principle that "parties are free to agree to a liquidated damages clause provided that the clause is neither unconscionable nor contrary to public policy." However, the judges split 4-3 on the issue of whether the relevant damages clause in a commercial lease was unenforceable as a matter of law because it was so grossly disproportionate to the ascertainable amount due upon full performance.
December 15, 2020 at 12:45 PM
8 minute read
In The Trustees of Columbia University in the City of New York v. D'Agostino Supermarkets, the Court of Appeals unanimously reaffirmed the principle that "parties are free to agree to a liquidated damages clause provided that the clause is neither unconscionable nor contrary to public policy." However, the judges split 4-3 on the issue of whether the relevant damages clause in a commercial lease was unenforceable as a matter of law because it was so grossly disproportionate to the ascertainable amount due upon full performance.
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