Liquidating damages on form hud 2442
In 2007 the Office of Fair Trading investigated the charges being imposed on customers of credit card companies.
In its report, the OFT claimed these charges were unlawful under UK law as they amounted to a penalty.
In Australia, the definition of liquidated damages applies to the situations where upon the failure of a primary stipulation, imposes a detriment to the first party or a benefit to the second party by a secondary stipulation collateral to the primary stipulation (i.e. UK bank and credit card customers were being charged as much as £39 for a single transaction that took them over their credit limit.
Consumers argued these charges were well beyond the cost of sending a computerised letter.
If Neal breaches the contract by refusing to lease the store-front at the appointed time, it will be difficult to determine what profits Richard will have lost because the success of newly created small businesses is highly uncertain.
This, therefore, would be an appropriate circumstance for Richard to insist upon a liquidated damages clause in case Neal fails to perform.
In the case of construction contracts, courts have occasionally refused to enforce liquidated damages provisions, choosing to follow the doctrine of concurrent delay when both parties have contributed to the overall delay of the project.
Contracts in the NEC3 family use the term 'low service damages' (optional clause X.17) and generally include a Low Service Damages Schedule.