A liquidated damages clause requiring payment of the entire $85,000 in dispute, which was settled in an agreement requiring payment of only $38,000, was held by a California appellate court to be an unenforceable penalty as there was no reasonable relationship to the damages actually suffered by the failure to make a timely payment of the settlement amount, notwithstanding an express waiver of any challenges to the liquidated damages in the settlement.

Purcell v. Schweitzer, No. D063435 (Cal. C.A. 4th Dist., February 24, 2014)

Related Posts

Map Shows Half of the U.S. Suffering Drought Conditions
June 8, 2014

It’s not just California’s problem. Nearly half of the contiguous U.S. is experiencing abnormally dry or drought conditions...

California Grumbling at U.S. News
March 22, 2014

Only three of California's 19 law schools accredited by the American Bar Association improved on the U.S. News & World...

California Mediation Confidentiality Statute Prevents Enforcement of Settlement in Federal Court
January 16, 2014

A federal court in California “reluctantly” held that even though the parties settled in mediation by accepting in writing...