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Ohio supreme court: Reasonableness of liquidated damages is to be judged as of time the contract is signed (in contrast to Texas supreme court ruling)

Compare:

  • Boone Coleman Constr., Inc. v. Village of Piketon, 2016 Ohio 628, ¶¶34-37:  The Ohio supreme court held that an appeals court had improperly used hindsight analysis to invalidate a per diem liquidated-damages provision in public-works contract;

with

  • FPL Energy, LLC, v. TXU Portfolio Management Company, L.P., 426 S.W.3d 59,69-70, 72 (Tex. 2014): The Texas supreme court apparently used a hindsight analysis to hold that in practice “the liquidated damages provisions operate with no rational re­la­tion­ship to actual damages, thus rendering the provisions unreasonable in light of actual damages” and consequently rendering the liquidated-damages provisions unenforceable.

I’ll be adding a note about the Boone Coleman case to the annotation of the Common Draft liquidated-damages provisions.

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