Negotiating Enforceable Liquidated Damages Clauses in Business Contracts

Avoiding Enforceability Pitfalls With Carefully Drafted Provisions

Recording of a 90-minute CLE webinar with Q&A


Conducted on Tuesday, June 2, 2015

Recorded event now available

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Program Materials

This CLE webinar will outline considerations and best practices for business counsel when negotiating and drafting liquidated damages clauses in commercial contracts to increase the likelihood that a court or arbitrator will enforce the clauses.

Description

Liquidated damages provisions allow parties to a business contract to specify the amount of damages one or both parties may recover in the event of contractual breach. These clauses can be an effective tool for avoiding a complex and costly lost-profits damages analysis by experts. However, they can also become the subject of dispute when the relationship between the contracting parties breaks down and one party alleges the liquidated damages are excessive.

Business counsel can help mitigate challenges to enforceability through careful drafting of liquidated provisions. Using boilerplate clauses often leads to unintended consequences.

Listen as our authoritative panel explains best practices for drafting and negotiating liquidated damages provisions in business agreements. The panel will provide strategies for anticipating and overcoming enforcement hurdles with the clauses.

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Outline

  1. Drafting considerations for liquidated damages clauses
    1. Purpose and benefits of liquidated damages
    2. Scope of liquidated damages provision
    3. Cap/limitation on the amount of liquidated damages
    4. Language not to include in the liquidated damages clause
  2. Enforceability issues with liquidated damages clauses
    1. Reasonableness of liquidated damages at time of contract and at time of breach
    2. Difficulty of calculating actual damages
    3. Avoiding perception of liquidated damages as a penalty

Benefits

The panel will review these and other key issues:

  • What considerations should business counsel take into account when drafting and negotiating liquidated damages provisions in commercial contracts?
  • What enforceability challenges do parties commonly face when seeking to invoke a liquidated damages clause and how can they be overcome?
  • How can boilerplate liquidated damages provisions result in unintended consequences?

Faculty

Conroy, Rebekah
Rebekah R. Conroy

Shareholder
Walder Hayden

Ms. Conroy's practice is centered on complex business litigation, including products liability, RICO, contract and...  |  Read More

Shepard Davidson
Shepard Davidson

Partner
Burns & Levinson

Mr. Davidson concentrates his practice in the areas of complex business torts, contract claims, real estate...  |  Read More

Craig R. Enochs
Craig R. Enochs

Partner
Reed Smith

Mr. Enochs represents clients in commodity and derivative transactions with a focus on wholesale and retail energy...  |  Read More

Michael J. Pike
Michael J. Pike

Atty
Pike & Lustig, LLP

Mr. Pike concentrates his practice in the areas of complex-business litigation, contract claims, real estate disputes,...  |  Read More

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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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