In Abu Dhabi Court of Cassation Commercial Appeal 790 of 2013 (dated 22 October 2014), the Abu Dhabi Court of Cassation developed this established principle further, as it held that termination does not always prevent the court from applying a liquidated damages clause
or a penalty clause.
Can a liquidated damages clause
help insure timely completion of a construction project?
English law will in principle respect a liquidated damages clause
, provided it does not constitute a penalty clause.
In our redecent design/build contract for the IBM 504 Building in Fishkill, New York, not only did we accept responsibility for design and construction of the electro-mechanical systems, but we also agreed to a stiff liquidated damages clause
for failure to turnover the first floor of the building in just nine months.
A liquidated damages clause
can be included in a contract which sets out a certain sum to be paid by the athlete in the event of specified breaches of the agreement.
To date there is no DIFC Court precedent for what might be considered "manifestly disproportionate" or "grossly excessive" in the context of a claim for the enforcement of a liquidated damages clause
. However, the DIFC Courts have enforced a liquidated damages clause
in a case where they held that the defendant had no answer to the claim for liquidated damages (CFI 004/2007 Arabtec Construction LLC v Ultra Fuji International LLC).
More specifically, pre-agreement as to the amount of compensation due for specified instances of breach - the purpose of a liquidated damages clause
- is expressly permitted by Article 265 of the Civil Code: "if the subject matter of the obligation is not a sum of money, the contracting parties may agree in advance to the value of the compensation, whether in the contract or in a later agreement."
Additionally, the owner benefits from a liquidated damages clause
within the lease protecting them in the event the space is abandoned.
Damages for future lost profits were properly calculated in accordance with a liquidated damages clause
in the franchise agreement.