You are here: / / Portions of Covenant Not to Compete Unenforceable/Liquidated Damages Clause...
,

Portions of Covenant Not to Compete Unenforceable/Liquidated Damages Clause Constituted a Penalty

The Fourth Department determined a covenant not to compete was ambiguous with respect to the scope of prohibited activity, unenforceable to the extent it attempted to bind third parties, and the liquidated damages clause in the covenant was an unenforceable penalty:

…[T]he liquidated damages clause is an unenforceable penalty.  Liquidated damages are enforceable only to the extent that they constitute “ ‘an estimate, made by the parties at the time they enter into their agreement, of the extent of the injury that would be sustained as a result of breach of the agreement’ ” … .  Typically, a liquidated damages clause is enforceable if the stipulated amount of damages “bears a reasonable proportion to the probable loss and the amount of actual loss is incapable or difficult of precise estimation” … .  However, if the clause provides for damages “ ‘plainly or grossly disproportionate to the probable loss, the provision calls for a penalty and will not be enforced’ ” … .   Here, although the amount of actual damages is incapable of precise estimation, the amount of liquidated damages was grossly disproportionate to the probable loss and was designed to penalize plaintiff for his interference with the Agreement, as well as the interference of others with the Agreement.  Moreover, the liquidated damages clause here eliminates the balance due under the Agreement based on minor breaches of the covenant not to compete such that it is an “unconscionable penalty and should not be enforced” … .  Del Nero v Colvin…, 911, 4th Dept 11-8-13

 

You might also like
PLAINTIFF SUFFERED AN EYE INJURY AT SOME POINT IN HIP REPLACEMENT SURGERY OR IN THE RECOVERY ROOM AND SUED SEVERAL DEFENDANTS RELYING ON THE RES IPSA LOQUITUR DOCTRINE, DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT ON THAT ASPECT OF PLAINTIFF’S CASE SHOULD NOT HAVE BEEN GRANTED (FOURTH DEPT).
TRAFFIC ACCIDENT CASE REMITTED FOR A DETERMINATION WHETHER THE STATE WAS LIABLE UNDER A SECOND IMPACT THEORY, EVEN THOUGH THE STATE WAS NOT RESPONSIBLE FOR CAUSING THE DRIVER TO COLLIDE WITH THE STEEL BEAMS ACROSS THE ENTRANCES TO THE CLOSED BRIDGE, THE STEEL BEAMS WERE WELDED TO THE BRIDGE AT A HEIGHT WHICH ALLOWED A CAR TO PASS UNDER THEM, CONSTITUTING A DANGEROUS CONDITION AS A MATTER OF LAW (FOURTH DEPT). ​
THE PROSPECTIVE JUROR AND A PROSECUTION WITNESS WERE FRIENDS; DEFENDANT’S FOR CAUSE CHALLENGE TO THE JUROR SHOULD HAVE BEEN GRANTED (FOURTH DEPT).
AN OFFICER’S OBSERVATION OF DEFENDANT’S CAR FOLLOWING ANOTHER CAR TOO CLOSELY (A TRAFFIC INFRACTION) PROVIDED PROBABLE CAUSE FOR A TRAFFIC STOP, EVEN IF THERE WERE OTHER MOTIVATIONS FOR THE STOP (FOURTH DEPT).
ATTEMPTED FIRST DEGREE MURDER CONVICTIONS PRECLUDED BY FAILURE TO PROVE THE 38-YEAR-OLD DEFENDANT WAS MORE THAN 18 YEARS OLD, RECKLESS ENDANGERMENT FIRST DEGREE CONVICTION NOT SUPPORTED BY PROOF OF A GRAVE RISK OF DEATH.
DEFENDANT WALKED BY POLICE OFFICER HOLDING HIS WAISTBAND, OFFICER WAS JUSTIFIED IN REQUESTING DEFENDANT TO SHOW HIM HIS HANDS REVEALING A GUN, SUPPRESSION PROPERLY DENIED.
SCHOOL MAY HAVE HAD CONSTRUCTIVE KNOWLEDGE OF THE STUDENT’S CLAIM, BUT DID NOT HAVE ACTUAL KNOWLEDGE; LEAVE TO SERVE A LATE NOTICE OF CLAIM SHOULD NOT HAVE BEEN GRANTED.
PLAINTIFF WAS A THIRD-PARTY BENEFICIARY OF THE CONTRACT WITH THE ARCHITECTS; THEREFORE THE ARCHITECTURAL MALPRACTICE ACTION ACCRUED WHEN THE CONSTRUCTION WAS COMPLETE, RENDERING THE ACTION TIME-BARRED (FOURTH DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2025 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

Contract Which Theoretically Could Be Completed in a Year, Even If Highly Unlikely,... References to Counsel Did Not Constitute an Unequivocal Request for Counsel