Court Opinion

ID: 9632562
Source: CourtListenerOpinion
Date Created: 2023-08-22 11:19:09.239509+00
Date Added: 2024-06-11T18:08:18.550412
License: Public Domain

OAKS, Justice,
concurring.
I concur in the opinion of the Court, but deem it desirable to clarify one implication of my concurrence.
I do not understand the Court’s opinion as casting any doubt on the enforceability of an agreement for liquidated damages where the amount is not “grossly excessive and disproportionate to any possible loss so as to shock the conscience.” Johnson v. Carman, Utah, 572 P.2d 371, 373 (1977). This rule does not limit liquidated damages *1086to the amount of actual damages that can be proved. A principal reason for the validity of provisions for liquidated damages is to obviate the expense and controversy entailed in proving actual damages. Robbins v. Finlay, Utah, 645 P.2d 623, 626 (1982); Restatement (Second) of Contracts § 356 (1981).
The relevance of actual damages in the decisions cited by the Court is two-fold: (1) The relationship between actual damages and liquidated damages is a relevant consideration in determining whether or not the liquidated damages are “grossly excessive and disproportionate to any possible loss.” (2) If they are “excessive and disproportionate,” as found in this case, the provision on liquidated damages is unenforceable and the injured party can only recover the amount proved as actual damages.