Lake River Corp. v. Carborundum Co.: Difference between revisions

From wikilawschool.net. Wiki Law School does not provide legal advice. For educational purposes only.
No edit summary
No edit summary
 
(One intermediate revision by the same user not shown)
Line 1: Line 1:
{{Infobox Case Brief
{{Infobox Case Brief
|court=U.S. Court of Appeals, 7th Circuit
|citation=769 F.2d 1284 (7th Cir. 1985)
|citation=769 F.2d 1284 (7th Cir. 1985)
|date=1985
|subject=Contracts
|subject=Contracts
}}
}}
'''Facts''': Plaintiff agreed to build a new bagging system for Defendant under a contract with a liquidated damages clause. Defendant breached, and Plaintiff wanted damages according to the liquidated damages clause.
'''Facts''':  


'''Holding''': Held for Defendant.
Plaintiff agreed to build a new bagging system for Defendant under a contract with a liquidated damages clause. Defendant breached, and Plaintiff wanted damages according to the liquidated damages clause.


'''Reasons''': Although Plaintiff is entitled to damages, the liquidated damages clause is unreasonable in that it is disproportionate to the actual loss.


'''Rule''': Damages = contract price - amount saved by non-shipment.
'''Issue''':
 
Whether a modern court should refuse to enforce a penalty clause where the signatory is a substantial corporation, well able to avoid improvident commitments.
 
 
'''Holding''':
 
Held for Defendant.
 
 
'''Reasons''':
 
Although Plaintiff is entitled to damages, the liquidated damages clause is unreasonable in that it is disproportionate to the actual loss.
 
 
'''Rule''':
 
Damages = contract price - amount saved by non-shipment.

Latest revision as of 02:25, February 2, 2020

Lake River Corp. v. Carborundum Co.
Court U.S. Court of Appeals, 7th Circuit
Citation 769 F.2d 1284 (7th Cir. 1985)
Date decided 1985

Facts:

Plaintiff agreed to build a new bagging system for Defendant under a contract with a liquidated damages clause. Defendant breached, and Plaintiff wanted damages according to the liquidated damages clause.


Issue:

Whether a modern court should refuse to enforce a penalty clause where the signatory is a substantial corporation, well able to avoid improvident commitments.


Holding:

Held for Defendant.


Reasons:

Although Plaintiff is entitled to damages, the liquidated damages clause is unreasonable in that it is disproportionate to the actual loss.


Rule:

Damages = contract price - amount saved by non-shipment.

Retrieved from "https://www.wikilawschool.net/w/index.php?title=Lake_River_Corp._v._Carborundum_Co.&oldid=30299"