Court Opinion

ID: 6937209
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:41:13.39864+00
Date Added: 2024-06-11T16:07:32.279220
License: Public Domain

BUTTLER, P. J.,
dissenting.
The majority concludes that the contract provision in question is a liquidated damage clause, relying on decisions of the Supreme Court and this court. I agree that those decisions appear to require that conclusion.
However, if we were writing on a clean slate, I would hold that the provision is a straightforward one that provides that plaintiff will be paid a commission if the property is sold during the stated period, regardless of whether plaintiff is instrumental in the sale. The provision does not even purport to provide for damages in the event of a breach, and there has been no breach to which a liquidated damage provision could apply. But see Dean Vincent, Inc. v. McDonough, 281 Or 239, 574 P2d 1096 (1978); Wright v. Schutt Construction, 262 Or 619, 500 P2d 1045 (1975); Foster v. Peterson, 42 Or App 249, 600 P2d 490 (1979). As I view it, plaintiff is entitled to its commission because the property was sold during the exclusive listing period, not because defendant breached the agreement to plaintiffs damage.
However, treating the contract as one providing for liquidated damages, as we must, plaintiff has not met the legal requirements to sustain that kind of provision. Liquidated damage clauses have a legitimate place in contracts, but the circumstances in which they are legitimate are quite limited. To begin with, the damages to be sustained in the event of a breach must not be readily ascertainable at the time the contract is made; secondly, the parties must have made a genuine effort to forecast the damages that would occur as the result of a breach. Illingworth v. Bushong, 297 Or 675, 688 P2d 379 (1984). Here, there is no evidence that the parties made a genuine effort to make a reasonable forecast of damages that would result from a breach. The contract is on a printed form and appears to be one of adhesion. There is no evidence that the parties discussed the provision. Defendant testified that he did not even read it. Given the record, it is not surprising that the trial court did not find that the parties made a genuine pre-estimate of damages; it found only that the provision “is reasonable.” That is not sufficient. Illingworth v. Bushong, supra.
*437Although I agree that plaintiff is entitled to be paid the commission that defendant agreed to pay it, I do not agree that the provision is a valid one for liquidated damages. Because this court may not unscramble the eggs of higher authority, we are obliged to treat the case as one for liquidated damages.
The result is a conundrum: Plaintiff should recover under the plain terms of the contract provision but, viewing that provision as a liquidated damage clause, plaintiff has not established the essential prerequisites to the validity of such provision.
Accordingly, I would reverse.