Service Agreement Liquidated Damages

The seller has credited the customer – % of the royalty for liquidated damages for each business day between the due date and each subsequent date on which the seller delivers the Software up to 30 business days maximum. These liquidated damages are the client`s exclusive remedy for any delay of 30 business days or less, but do not exclude other corrective measures for other injuries, including and without restriction for delays of more than 30 business days. A similar problem was raised in M-J Polymers Limited -v- Imerys Minerals Limited. This was a «Take or Pay» clause contained in an agreement on the supply of dispersants. The purchaser was required to pay for minimum quantities of materials, even if he had not ordered them. One of the many issues on which the court had to rule was whether this clause constituted a sanction. Counsel could not find direct authority on this issue, so the judge was required to decide de novo. He explained that the clause «is not the ordinary candidate for such a rule,» but the Sanctions Act could eventually apply. However, according to Makdessi, the general view is that the clauses to be taken or the clauses to be paid are likely to be analysed as primary obligations and therefore do not fall within the scope of the sanctions rule. Damage that is sufficiently uncertain can be characterized as unsalted damage and can thereby be classified because it is not mathematically computable or subject to eventuality.

As a general rule, the contracting parties agree to the liquidation of the damages if, otherwise, the damage is uncertain or difficult to prove or calculate. In general, the courts maintain a reasonable liquid injury clause in the case and consider several factors in determining whether such a clause is appropriate, including: Neal Townsend agrees to lease a store to Richard Smith, whose jewelry Richard intends to sell. If Townsend breaks the contract by refusing to lend it on the agreed date, it will be difficult to determine the benefits Smith will have lost, as the success of the newly created small businesses is very uncertain.