Validity and Construction of Liquidated Damages Provisions
Liquidated damages provisions are no longer viewed with
United States v. Bethlehem Steel Co., 205 U.S. 105, 119 (1907);
Southwest Engineering Co. v. United States, 341 F.2d 998, 1001 (8th
Cir.), cert. denied, 382 U.S. 819 (1965). The validity of a
damages clause is to be judged as of the time the contract is made,
not by subsequent events. See United States v. Bethlehem Steel Co.,
U.S. at 105; Priebe & Sons v. United States, 332 U.S. 407, 412
The fact that damages may be uncertain in nature and amount, or are
difficult of ascertainment, is a major reason for sustaining
damage clauses. See Wise v. United States, 249 U.S. 361 (1919);
States v. Bethlehem Steel Co., supra ; Priebe & Sons v. United
332 U.S. at 422; cf. Rex Trailer Co. v. United States, 350 U.S.
(1956). The fact that the actual damages may prove to be less, or
greater, than the sum specified in the clause for liquidated
not controlling, and recovery will be given in the agreed amount.
Printing & Publishing Ass'n v. Moore, 183 U.S. 642 (1902). Recovery
liquidated damages may be had even though actual damages are not
United States v. Bethlehem Steel Co., supra.
[cited in USAM 4-4.420]