Brief Summary - The contention of the Barrie School (P) was that it was not requ

Question

Brief Summary- The contention of the Barrie School (P) was that it was not required to lessen damages where the liquidated damages provisions of its enrollment contract were valid and did not constitute a penalty, so that the Patches (D), who had breached the enrollment contract were asked to settle the liquidated damages.

Rule of Law. Where parties concur to a valid liquidated sum in the event of a breach, a non-breaching party has no duty to mitigate damages.

The court ruled that it was valid but held that the failure of the Barrie School (P) to lessen its damages was fatal to its claim. Hence, the court gave judgment in favor of the Patches (D) which the state’s intermediate appellate court also affirmed, but the state’s highest court granted review because the number of students enrolled for the academic year at issue exceeded the school’s initial budget projections but there was no evidence of mitigation was presented at trial. The trial court held that the contract was not fraudulent and adhesive, that the Patches (D) had breached the contract they entered into with the school.

I totally agree as there are three essential elements of a valid and enforceable liquidated damages clause. First, the clause must provide in clear and unambiguous terms for a certain sum. Secondly, the liquidated damages must reasonably be compensation for the damages anticipated by the breach. Thirdly, liquidated damages clauses are by their nature mandatory binding agreements before the fact which may not be altered to correspond to actual damages determined after the fact.

Explanation / Answer

Read the 2007 opinion of the Maryland Court of Appeals in the case of Barrie School v. Patch. Do you agree with the Court that this was a valid liquidated damages provision? Why or why not? Do you agree with the court’s conclusion that the school did not have a duty to mitigate damages? Why or why not?

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