« on: July 30, 2007, 07:51:22 PM »
hi. i'm an incoming 1L but was a litigation paralegal few years back. have had to go to court multiple times to prove that lessor is entitled to liquidated damages. wish i had my notes..but i'm not at work..maybe tomorrow.
q1: if i remember correctly, there is a provision in article 2 of ucc code? that specifically states lessors are entitled to liquidated damages. any proceeds from the re-lease will be deducted from the liquidated damages amount. say based on the contract, liquidated damages equals: present value of unpaid monthly payments plus present value of anticipated residual interest of car at the time of lease-end plus late charges, etc. from the total amount, you deduct pv value of anticipated payments from the re-lease. plus/or actual sale proceeds of the re-leased car.
q2. not punitive. it goes back to your basic premise. the party has to be in as good position as he would have been if the contract had been performed. and contracts are meant to be drafted that none of the parties breach the agmt. otherwise, u have millions of lessees defaulting on car payments coz they get bored with their present car and they get a better deal by just giving it up. u can also use..contract speaks for itself. it was arms length transaction. 2 educated parties entered into an agmt, etc. if liquidated damages is part of the remedies..breaching party has to live with it by virtue of agreeing to the terms.
i couldve done better if i had my notes. there are case laws to support this as well.
p.s. have not lost any trials re: proving liquidated damages. lost several MSJs but never actual trial or proof of damages hearing.