DOCSLIB.ORG

Punitive Damage Awards in International Arbitration: Does the Safety Valve of Public Policy Render Them Unenforceable in Foreign States

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Punitive Damage Awards in International Arbitration: Does the Safety Valve of Public Policy Render Them Unenforceable in Foreign States Loyola of Los Angeles Law Review Volume 20 Number 2 Article 6 1-1-1987 Punitive Damage Awards in International Arbitration: Does the Safety Valve of Public Policy Render Them Unenforceable in Foreign States Karen J. Tolson Follow this and additional works at: https://digitalcommons.lmu.edu/llr Part of the Law Commons Recommended Citation Karen J. Tolson, Punitive Damage Awards in International Arbitration: Does the Safety Valve of Public Policy Render Them Unenforceable in Foreign States, 20 Loy. L.A. L. Rev. 455 (1987). Available at: https://digitalcommons.lmu.edu/llr/vol20/iss2/6 This Notes and Comments is brought to you for free and open access by the Law Reviews at Digital Commons @ Loyola Marymount University and Loyola Law School. It has been accepted for inclusion in Loyola of Los Angeles Law Review by an authorized administrator of Digital Commons@Loyola Marymount University and Loyola Law School. For more information, please contact [email protected]. PUNITIVE DAMAGE AWARDS IN INTERNATIONAL ARBITRATION: DOES THE "SAFETY VALVE" OF PUBLIC POLICY RENDER THEM UNENFORCEABLE IN FOREIGN STATES? If a man shall steal an ox, or a sheep, and kill it, or sell it; he shall restorefive oxen for an ox, and four sheep for a sheep.1 I. INTRODUCTION The concepts of arbitration and punitive damages are ancient. In Greek mythology, the giant, Briareus, arbitrated a dispute between Po- seidon (God of the Sea) and Helios (God of the Sun) to fairly divide Corinth.' In the third millenium B.C., when two city-states disputed over borders, the leader of a third state made an award based on divine inspiration.' King Solomon, the wisest king of Israel, settled a disagree- ment between two female subjects who both claimed to be the mother of one baby.4 And as the Biblical law above demonstrates, since time im- memorial, tortfeasors have been punished for egregious conduct by being required to pay damages in excess of compensation.' Today, arbitration between citizens of foreign States requires imple- mentation of a complicated and sophisticated system of rules and proce- dures. Arbitration is commonly employed to resolve a myriad of conflicts which arise between people who live under vastly different sys- tems of law. Even more complex are the methods by which individual States enforce foreign arbitral awards. An American party and a foreign party may contract to resolve all disputes in an arbitral forum. The parties may also agree that United 1. Exodus 22:1 (King James). 2. G. RAYMOND, CONFLICT RESOLUTION AND THE STRUCTURE OF THE STATE SYS- TEM: AN ANALYSIS OF ARBITRATIVE SETTLEMENTS 1 (1980). 3. Id. at 9. This "first recorded case of international arbitration" occurred in Mesopota- mia. The third city-state leader's award was revealed to him by the ancient god Enlil. Id. 4. 1 Kings 3:16-28 (King James). 5. Exodus is replete with examples of over-compensating damages as punishment: If the theft be certainly found in his hand alive, whether it be ox, or ass, or sheep; he shall restore double. For all manner of trespass, whether it be for ox, for ass, for sheep, for raiment or for any manner of lost thing, which another challengeth to be his, the cause of both parties shall come before the judges; and whom the judges shall condemn, he shall pay double unto his neighbour. Exodus 22:4, 9 (King James) (emphasis in original). LOYOLA OF LOS ANGELES LAW REVIEW [Vol. 20:455 States law will govern the arbitration. This type of agreement requires that arbitrators apply United States substantive and, in some cases, pro- cedural law to the issues presented by the conflict.6 When United States law governs a dispute which includes tort and contract issues, punitive 6. Two or more foreign individuals or companies, transacting international business, may agree in advance or after a dispute arises to submit to arbitration all or some disputes arising out of the contract. An arbitration agreement binds the parties as does any contract. Parties usually choose the substantive law applicable to disputes and the forum at which the arbitra- tion will take place. If the forum chosen is one party's sovereign, the arbitration procedure may be governed by that country's rules for arbitration, where any exist. See Ehrenhaft, Effec- tive InternationalCommercial Arbitration, 9 LAW & POL. INT'L BUS. 1191, 1209-11 (1977). Otherwise, the parties may submit to a more neutral forum's rules, perhaps one of the major international arbitral forums. See infra text accompanying notes 33-38. When formulating an award, arbitrators must follow the choices of law and forum speci- fied in the arbitration agreement. If an arbitrator ignores the parties' choices, a national court may review and overturn the award. See infra note 207 for a discussion of the review and confirmation process in several foreign nations. Because the agreement binds the arbitrators, choice of law provisions in the arbitration agreement are crucial. Depending upon the forum and the type of dispute, choice of law provisions may preempt the parties' national rights- both procedural and substantive. For example, suppose an American company contracts with a British company to build a factory in England. In some American jurisdictions, proof of bad faith in a contractual matter may be the basis for an award of punitive damages. See, e.g., Seaman's Direct Buying Serv., Inc. v. Standard Oil Co., 36 Cal. 3d 752, 686 P.2d 1158, 206 Cal. Rptr. 354 (1984) (punitive damages awardable for breach of contract and breach of implied covenant of good faith and fair dealing in dealer's action against oil company). However, suppose the parties agree to arbitrate any and all disagreements arising out of the contract and agree that British law gov- erns the disputes. British law does not recognize punitive damages for bad faith. See infra text accompanying notes 62-65 for a discussion of British actions which may involve punitive dam- ages. Thus, the American company, by agreeing to arbitrate under British law, has relin- quished rights and remedies available under comparable United States law. Careful drafting may designate one or the other party's national laws, as in the example above, or may, as happens frequently, designate a neutral foreign law as the governing law. The laws of England, France and Switzerland are most often chosen as the neutral body of law. W. CRAIG, W. PARK & J. PAULSSON, INTERNATIONAL CHAMBER OF COMMERCE ARBI- TRATION § 17.04, at 86 (1984) [hereinafter ICC ARBITRATION]. For a discussion of drafting to ensure the intent of the parties, see Ehrenhaft, supra at 1191-209. Failure to include a choice of law provision in an arbitration agreement leaves the parties completely unprepared for an arbitral outcome and complicates the arbitrators' duties. In this situation an arbitrator must properly apply conflict of law principles to concerns of each of the jurisdictions involved in the dispute. He or she must then determine which country's substantive laws have the most significant relationship to the parties and their transaction. Derains, Arbitrage et Droit de la Concurrence, 14 REVUE SUISSE DU DROIT INTERNATIONAL DE LA CONCURRENCE 39, 56-57 (1982). Under International Chamber of Commerce Court of Arbitration (ICC Court) rules, arti- cle 13(3), for example, in the absence of a choice of law provision by the parties, the arbitrator "shall apply the law designated as the proper law by the rule of conflict which he deems appropriate." INTERNATIONAL COUNCIL FOR COMMERCIAL ARBITRATION, ICC CourtRules [1976] 1 Y.B. COM. ARB. 158, 167. The ICC Court rules are also codified at ICC Publication No. 291 (1975). According to one author "the arbitrators are able to infuse an international element into the proceedings and assure both parties that the issue has not been determined by January 1987] INT'L ARBITRATION AWARDS damages may constitute part of the arbitral award.7 To obtain redress in the narrow application of the system of a single State, whose relation to the dispute is not necessarily predominant." ICC ARBITRATION, supra, § 17.02, at 79. When parties choose "United States law" to govern an international commercial contract and arbitration agreement, arbitrators must determine which type of United States law to ap- ply. The parties may designate the law of a specific state. If no state law is mentioned, the arbitrators may apply the law of the state in which the transaction or breach occurred. A party who recognizes the opportunity to collect punitive damages may suggest the law of a state like California. California law allows arbitrators to award punitive damages. Baker v. Sadick, 162 Cal. App. 3d 618, 208 Cal. Rptr. 676 (1984). For a discussion of Baker, see infra note 67. A potential wrongdoer might prefer the more conservative New York approach set out in Garrity v. Lyle Stuart, Inc., 40 N.Y.2d 354, 353 N.E.2d 793, 386 N.Y.S.2d 831 (1976) under which arbitrators may not award punitive damages. For a discussion of Garrity, see infra note 67. The arbitrators will then decide whether to apply state law or whether the United States Arbitration Act (Federal Arbitration Act or Act) preempts state law. 9 U.S.C. §§ 200-09 (1986). See Willis v. Shearson/American Express, Inc., 569 F. Supp. 821 (M.D.N.C. 1983). For a discussion of Willis, see infra text accompanying notes 89-95. Where federal law preempts the state law, the arbitrators must make a careful choice. Some arbitrators may apply federal common law. See Southland Corp. v. Keating, 465 U.S. 1, 14 (1984) (action to compel compliance with arbitration clause where arbitration would decide franchise investment matters state law had declared nonarbitrable) (Stevens, J.,concurring in part and dissenting in part); Acevedo Maldonado v.
Load more

Recommended publications
  • Accord and Satisfaction Is Possible When Damages Are Liquidated
    Accord And Satisfaction Is Possible When Damages Are Liquidated Unmarketable Preston par some hoarders and harbour his Egypt so raving! Intergovernmental Keith andchunter sanguineous no empoisonment Winifield recalescesencases almost prevailingly wryly, thoughafter Greggory Reinhard outlash pillory earliest,his spitefulness quite vixenish. hallmarks. Oaten Army corps agued that common law administered by various meanings to determine if performance, liquidated damages and is possible existence of the petitioner believes that it is generally a necessary Satisfaction of an unliquidated or disputed debt also known only an ac-. Various affirmative defenses including accord and satisfaction. Be the intent of this language to kill an payment and satisfaction of all damages arising from. I eliminate to testimony that 30 in satisfaction of the 100 obligationis at least. What is quick accord? If an obligation to dare A pump be satisfied only by color and random to. Specific performance Liquidated damages Penal damages Rescission. Tent the scaffold of liquidated damages as land is for order to show miss it make be. Plaintiff's claim is barred by an overlook and satisfaction. The final claim and final cost although less likely be impact behavior subject it then often there late. In Accord Definition of trust Accord by Merriam-Webster. And without remainder on grant before September 30 2010 in schedule to liquidated damages. The employees a court-approved settlement is more likely more reflect a. The defendant to the consequences likely to label from default. Under such circumstances an escape and satisfaction may result from easy payment within a lesser sum among the creditor's claim even this sum not in excess water the balance concededly due consequence a liquidated claim among a creditor is rendered unliquidated.
    [Show full text]
  • Important Concepts in Contract
    Munich Personal RePEc Archive Practical concepts in Contract Law Ehsan, zarrokh 14 August 2008 Online at https://mpra.ub.uni-muenchen.de/10077/ MPRA Paper No. 10077, posted 01 Jan 2009 09:21 UTC Practical concepts in Contract Law Author: EHSAN ZARROKH LL.M at university of Tehran E-mail: [email protected] TEL: 00989183395983 URL: http://www.zarrokh2007.20m.com Abstract A contract is a legally binding exchange of promises or agreement between parties that the law will enforce. Contract law is based on the Latin phrase pacta sunt servanda (literally, promises must be kept) [1]. Breach of a contract is recognised by the law and remedies can be provided. Almost everyone makes contracts everyday. Sometimes written contracts are required, e.g., when buying a house [2]. However the vast majority of contracts can be and are made orally, like buying a law text book, or a coffee at a shop. Contract law can be classified, as is habitual in civil law systems, as part of a general law of obligations (along with tort, unjust enrichment or restitution). Contractual formation Keywords: contract, important concepts, legal analyse, comparative. The Carbolic Smoke Ball offer, which bankrupted the Co. because it could not fulfill the terms it advertised In common law jurisdictions there are three key elements to the creation of a contract. These are offer and acceptance, consideration and an intention to create legal relations. In civil law systems the concept of consideration is not central. In addition, for some contracts formalities must be complied with under what is sometimes called a statute of frauds.
    [Show full text]
  • Issues Paper 6: Damages for Late Payment Responses
    Insurance Contract Law SUMMARY OF RESPONSES TO ISSUES PAPER 6 Damages for Late Payment and the Insurer’s Duty of Good Faith This document summarises the responses to the Law Commissions’ Issues Paper 6: Damages for Late Payment and the Insurer’s Duty of Good Faith November 2010 THE LAW COMMISSION THE SCOTTISH LAW COMMISSION Joint Review of Insurance Contract Law SUMMARY OF RESPONSES TO ISSUES PAPER 6: Damages for Late Payment and the Insurer’s Duty of Good Faith CONTENTS Page NOTES ii PART 1: INTRODUCTION 1 PART 2: REFORMING THE LAW ON DAMAGES FOR LATE PAYMENT 3 PART 3: ELEMENTS OF OUR PROPOSAL 6 PART 4: QUANTUM OF DAMAGES 10 PART 5: IMPACT 13 i NOTES APPROACH TAKEN IN THIS PAPER Describing responses N.1 This paper describes the responses we have received to the proposals set out in Issues Paper 6: Damages for Late Payment and the Insurer’s Duty of Good Faith. We provide a short description of the current law in Part 1 and our proposals in outline throughout the document, but readers should refer back to the Issues Paper for a fuller explanation. N.2 This document aims to report the arguments raised by consultees. It does not give the views of the Law Commission or the Scottish Law Commission. COMMENTS AND FREEDOM OF INFORMATION N.3 We are not inviting comments at this stage. However, if having read the paper, you do wish to put additional points to the Commissions, we would be pleased to receive them. N.4 Please contact us: By email at [email protected], or By post, addressed to Christina Sparks, Law Commission, Steel House, 11 Tothill Street, London SW1H 9HL N.5 As the Law Commission will be the recipient of any comments, the Freedom of Information Act 2000 will apply and all responses will be treated as public documents.
    [Show full text]
  • Measure of Damages in International Law
    MEASURE OF DAMAGES IN INTERNATIONAL LAW CLYDE EAGLETON Writers have devoted but little attention to the measure of damages in international law; and the paucity of doctrine and precedent has embarrassed recent attempts to codify the law relating to the responsibility of states to such an extent that it is now a question as to whether this subject should be included in the code. Such a statement would be of great value to judges and arbitral tribunals because of the divergencies of theory which underlie the measuring of damages-which, indeed, lie at the foundation of international responsibility. It is contended, how- ever, that, because of contrariety of opinion, and the difficulties of statement, no effort should be made to state rules as to the measure of damages. It is hoped that presentation of some of the problems may be helpful, by leading to discussion which would pave the way for agreement. It would seem to be a universally recognized principle of law that an illegal act arouses an obligation to make reparation. Such is the definition given to responsibility in international law: "A state is responsible, as the term is used in this convention, when it has a duty to make reparation to another state for the injury sustained by the latter state as a consequence of an injury to its national." 1 And the Permanent Court of International Justice in the Chorzow Factory Case said: "As regards the first point, the Court observes that it is a principle of international law, and even a general conception of 1 DRAFT CONVENTION ON THE LAW OF RESPONSIBILITY OF STATES FOR DAMAGE DONE IN THEIR TERRITORY TO THE PERSON OR PROPERTY OF FOREIGN- ERs, RESEARCH IN INTERNATIONAL LAW (1929) 133 (also published, with same pagination, (1929) 23 Am.
    [Show full text]
  • The Case Against Equity in American Contract Law
    Columbia Law School Scholarship Archive Faculty Scholarship Faculty Publications 2020 The Case Against Equity in American Contract Law Jody S. Kraus Columbia Law School, [email protected] Robert E. Scott Columbia Law School, [email protected] Follow this and additional works at: https://scholarship.law.columbia.edu/faculty_scholarship Part of the Contracts Commons, Criminal Law Commons, Criminal Procedure Commons, and the Legal Remedies Commons Recommended Citation Jody S. Kraus & Robert E. Scott, The Case Against Equity in American Contract Law, 93 S. CAL. L. REV. 1323 (2020). Available at: https://scholarship.law.columbia.edu/faculty_scholarship/2537 This Article is brought to you for free and open access by the Faculty Publications at Scholarship Archive. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of Scholarship Archive. For more information, please contact [email protected]. THE CASE AGAINST EQUITY IN AMERICAN CONTRACT LAW JODY P. KRAUS* & ROBERT E. SCOTT† The American common law of contracts appears to direct courts to decide contract disputes by considering two opposing points of view: the ex ante perspective of the parties’ intent at the time of formation, and the ex post perspective of justice and fairness to the parties at the time of adjudication. Despite the black letter authority for both perspectives, the ex post perspective cannot withstand scrutiny. Contract doctrines taking the ex post perspective—such as the penalty, just compensation, and forfeiture doctrines—were created by equity in the early common law to police against abuses of the then prevalent penal bond. However, when the industrial revolution pushed courts to accommodate fully executory agreements, and parties abandoned the use of penal bonds, the exclusively ex ante focus of the new contract law that emerged rendered the ex post doctrines obsolete.
    [Show full text]
  • Fiduciary Remedy and Damages Survey
    ACTEC Fiduciary Litigation Committee Fiduciary Remedy and Damages Survey 50-STATE DAMAGES March 2018 In 2015, the Fiduciary Surcharge and Damages Sub-Committee distributed a twenty-six (26) question survey to ACTEC fellows regarding current case law, statutes and rules within each U.S. State on key issues relevant to financial remedies for trust and probate disputes. Separate topics related to damages and other remedies were presented to outline potential damage issues, followed by citations to language in Restatements, treatises, case law and other sources which may be followed by each State. Please direct any queries or comments regarding this 50-State Survey to Dom Campisi ([email protected]), Evans, Latham & Campisi, One Post Street, Suite 600, San Francisco, CA, 94104, (415) 421-0288. CONTRIBUTORS TO THE SURVEY Tracy Adamovich (Schiff Hardin)—New York Paul J. Barulich (Barulich Dugoni)—North Dakota, Oregon, South Dakota Kevin Bender (McGuire Woods)—Virginia David Benedetto (Vorys, Sater, Seymour and Pease)—Indiana Gerald Carp (Schiff Hardin)—New York T. Jack Challis (Polsinelli Shughart)—Missouri Patricia H. Char (K&L Gates)—Washington 2 William E. Davis (Jackson & Campbell)—District of Columbia Jane Gorham Ditelberg (Northern Trust)—Illinois W. Birch Douglas III (McGuire Woods)—Virginia Bruce K. Dudley (Wyatt, Tarrant & Combs)—Kentucky Danielle P. Ferrucci (Shipman & Goodwin)—Connecticut Lisa Forbes (Vorys, Sater, Seymour and Pease)—New Hampshire Lynn Foster (Univ. of Ark. at Little Rock School of Law)—Arkansas Stanbery Foster, Jr. (Williams, Kastner & Gibbs)—Washington Adam Gaslowitz (Gaslowitz Frankel)—Georgia Philip J. Halley (Husch Blackwell)—Wisconsin Bryon W. Harmon (Shipman & Goodwin)—Connecticut Frank N. Ikard, Jr.
    [Show full text]
  • The Enforceability of Contractual Clauses Excluding Sellers from Liability for Consequential Damages Under Section 2-719 of the Uniform Commercial Code
    Washington University Law Review Volume 58 Issue 2 January 1980 The Enforceability of Contractual Clauses Excluding Sellers from Liability for Consequential Damages Under Section 2-719 of the Uniform Commercial Code Lee Borgatta Washington University School of Law Follow this and additional works at: https://openscholarship.wustl.edu/law_lawreview Part of the Commercial Law Commons Recommended Citation Lee Borgatta, The Enforceability of Contractual Clauses Excluding Sellers from Liability for Consequential Damages Under Section 2-719 of the Uniform Commercial Code, 58 WASH. U. L. Q. 317 (1980). Available at: https://openscholarship.wustl.edu/law_lawreview/vol58/iss2/4 This Note is brought to you for free and open access by the Law School at Washington University Open Scholarship. It has been accepted for inclusion in Washington University Law Review by an authorized administrator of Washington University Open Scholarship. For more information, please contact [email protected]. NOTES THE ENFORCEABILITY OF CONTRACTUAL CLAUSES EXCLUDING SELLERS FROM LIABILITY FOR CONSEQUENTIAL DAMAGES UNDER SECTION 2-719 OF THE UNIFORM COMMERCIAL CODE I. INTRODUCTION A primary purpose and policy underlying the Uniform Commercial Code (UCC) is "to make uniform the law among the various jurisdic- tions."' In interpreting and applying section 2-719,2 however, the courts have reached inconsistent results on the enforceability of con- tractual provisions purporting to hold sellers harmless from liability for consequential damages for commercial losses3 when the buyer's exclu- sive and limited contractual remedy for the seller's breach of warranty 4 "fails of its essential purpose." 1. U.C.C. § 1-102(2)(c). All states, except Louisiana, have adopted article 2 of the UCC.
    [Show full text]
  • Adjudication of Claim for Damages Under Sections 73, 74 and 75 of Indian Contract Act, 1872
    Adjudication of claim for damages under Sections 73, 74 and 75 of Indian Contract Act, 1872 ∗ B. V. R. Sarma Introduction According to Oxford dictionary the term ‘damages’ are defined as ‘financial compensation for loss or injury’. In law, damages are money claimed by, or ordered to be paid to, a person as compensation for loss or injury Black’s Law Dictionary. In context of the Indian Contract Act, 1872 damages are referred in context to breach of contract i.e. a party's failure to perform some contracted-for or agreed- upon act, or his failure to comply with a duty imposed by law which is owed to another or to society. Breach of contract is a legal concept in which a binding agreement or negotiated for exchange is not respected by one or more of the parties to the contract by non-performance or interference with the other party's performance. On a breach of contract by a defendant, a court generally awards the sum that would restore the injured party to the economic position they expected from performance of the promise or promises. When it is either not possible or not desirable to award damages measured in that way, a court may award money / damages designed to restore the injured party to the economic position they occupied at the time the contract was entered, or designed to prevent the breaching party from being unjustly enriched. Parties may contract for liquidated damages to be paid upon a breach of the contract by one of the parties. Under common law, a liquidated damages clause will not be enforced if the purpose of the term is solely to punish a breach.
    [Show full text]
  • Of Indemnity
    Pepperdine Law Review Volume 20 Issue 4 Article 4 5-15-1993 An Ind. Run around the U.C.C.: The Use (or Abuse?) of Indemnity Paul J. Wilkinson Follow this and additional works at: https://digitalcommons.pepperdine.edu/plr Part of the Contracts Commons, Courts Commons, Jurisdiction Commons, Litigation Commons, and the Torts Commons Recommended Citation Paul J. Wilkinson An Ind. Run around the U.C.C.: The Use (or Abuse?) of Indemnity, 20 Pepp. L. Rev. Iss. 4 (1993) Available at: https://digitalcommons.pepperdine.edu/plr/vol20/iss4/4 This Comment is brought to you for free and open access by the Caruso School of Law at Pepperdine Digital Commons. It has been accepted for inclusion in Pepperdine Law Review by an authorized editor of Pepperdine Digital Commons. For more information, please contact [email protected], [email protected], [email protected]. An Ind.' Run Around the U.C.C.: The Use (or Abuse?) of Indemnity I. INTRODUCTION Depending upon one's perspective, a statute of limitations may seem either a harsh roadblock on the highway to justice or a comforting as- surance of limited liability. With respect to a claim for breach of war- ranty, however, the four-year statute of limitations under Uniform Com- mercial Code section 2-725 may, in certain circumstances, be neither.2 Recent cases show a clear conflict in how courts interpret the U.C.C. statute of limitations when a party brings an indemnity claim in a case otherwise governed by the code.' In jurisdictions that have yet to de- 1.
    [Show full text]
  • Note Why There Should Be a Duty to Mitigate Liquidated
    NOTE WHY THERE SHOULD BE A DUTY TO MITIGATE LIQUIDATED DAMAGES CLAUSES I. INTRODUCTION On May 15, 2008, the Massachusetts Supreme Judicial Court held that there is no duty for non-breaching parties to mitigate damages in the face of a liquidated damages clause.1 In 2002, Paul Minihane entered into a ten-year license agreement with NPS, LLC for two Club seats at Gillette Stadium, the home of the New England Patriots football team. 2 This agreement included a liquidated damages provision that allowed NPS, LLC to accelerate the balance of monies owed under the contract in the event of default. 3 Despite attending all but one game in the 2002 season, Minihane paid only two payments under the agreement, and NPS, LLC subsequently brought suit to enforce the acceleration clause. 4 On appeal, the issues were confined to determining whether the liquidated damages clause was valid and the amount of the damages award. 5 Although both parties briefed the issue of mitigation on the assumption that non-breaching parties had such a duty, 6 the Supreme 1. NPS, LLC v. Minihane, 886 N.E.2d 670, 675 (Mass. 2008). 2. Id. at 672. NPS, LLC is the developer of Gillette Stadium. Id. 3. Id. The acceleration clause read as follows: “In the event that Licensee shall not have cured the default or breach . , Owner may terminate the right of Licensee to the use and possession of the Club Seats and all other rights and privileges of Licensee under the Agreement and declare the entire unpaid balance of the License Fee (which for the purposes hereof shall include the total aggregate unpaid balance of the annual License Fees for the remainder of the Term) immediately due and payable, whereupon Owner shall have no further obligation of any kind to Licensee.
    [Show full text]
  • The Myth That Promisees Prefer Supracompensatory Remedies: An
    The Myth that Promisees Prefer SupracompensatoryRemedies: An Analysis of Contracting for Damage Measures Alan Schwartzt Courts will not enforce liquidateddamage clauses when a stipulatedsum exceeds (i) the harmthat the promiseecould reasonablyexpect to suffer from breachor (ii) the actualharm that breach turned out to cause.' Courtstradition- ally have not awardedpunitive damages "for a breachof contractunless the conduct constitutingthe breachis also a tort for which punitive damagesare recoverable."2Courts also will not grant specific performance"if damages would be adequateto protectthe expectationinterest of the injuredparty," nor will courts enforce contractsthat accordpromisees a right to specific relief.3 These threerules sharethe goal of limitinga promisee'srecovery to his lost expectation.The liquidateddamage rule preventsthe promiseefrom contracting for a supracompensatoryremedy, and the punitivedamage rule preventscourts from awardingsuch a remedy.The specific performancerule achievesthe law's goal indirectly.A promiseewho has a rightto specific performancecan compel the promisor to perform even when the promisor'sloss from performance would exceed the promisee'sgain. A promisorcan purchaseher freedom,but sophisticatedpromisees sometimes will demandmore thantheir expectation as the price.Permitting specific performanceonly whendamages could not protect the expectation interest limits the ability of promisees to obtain supracom- pensatorypayments by threateningto seek specific relief. The ban on "specific performanceclauses" prevents a promiseefrom obtaining by contractthe power that the general specific performancerule aims to abolish. t William K. TownsendProfessor of Law, Yale Law School; Professor,Yale School of Organization & Management. Earlier versions of this article were presented at the 1989 Canadian Conference of CommercialLaw Professorsand a Symposiumon ContractTheory at Tel Aviv Law School held in March 1990. Peter Cramtonmade very helpful suggestions.
    [Show full text]
  • Arent Fox LLP Survey of Damage Laws of the 50 States Including the District of Columbia and Puerto Rico
    Arent Fox LLP Survey of Damage Laws of the 50 States including the District of Columbia and Puerto Rico Insurance & Reinsurance Elliott M. Kroll Practice Group James M. Westerlind Arent Fox LLP Survey of Damage Laws of the 50 States including the District of Columbia and Puerto Rico by Elliott M. Kroll and James M. Westerlind Copyright © 2012 Arent Fox LLP. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the written permission of Arent Fox LLP. Published by Arent Fox LLP 1050 Connecticut Avenue, NW Washington, DC 20036 Designed by Arent Fox LLP. Printed in the United States of America. ARENT FOX LLP washington, dc / new york / los angeles / arentfox.com Introduction Arent Fox LLP Survey of Damage Laws of the 50 States including the District of Columbia and Puerto Rico October 2011 We are pleased to share with you the Arent Fox LLP Survey of Damage Laws of the 50 States including the District of Columbia and Puerto Rico. Tort and business-related litigation is a fact of life for companies in the United States. Companies are under assault from employment-related suits, intellectual property suits, product liability suits, environmental claims and a host of tort and contract litigation. Tort reform is a frequent topic of legislative discussion, but it does little to limit the creativity of the plaintiffs’ bar. Businesses need to be able to operate with reasonable certainty concerning the nature and magnitude of the risks that they face.
    [Show full text]