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
SUPPORT MAGISTRATE SHOULD NOT HAVE ALLOWED FATHER’S ATTORNEY TO WITHDRAW WITHOUT NOTICE TO FATHER AND SHOULD NOT HAVE PROCEEDED IN FATHER’S ABSENCE (FOURTH DEPT).
ALTHOUGH THE 16-YEAR-OLD DEFENDANT IN THIS MURDER CASE WAS LIABLE AS AN ACCOMPLICE, ACCOMPLICE-LIABILITY STANDING ALONE DOES NOT PRECLUDE REMOVAL TO FAMILY COURT; A GUILTY PLEA DOES NOT FORFEIT AN APPELLATE CHALLENGE TO THE DENIAL OF REMOVAL; THE WAIVER OF APPEAL WAS INVALID BECAUSE IT PURPORTED TO FORECLOSE ALL APPELLATE CHALLENGES (FOURTH DEPT).
WHETHER TO INSTRUCT THE JURY ON THE EXTREME EMOTIONAL DISTURBANCE (EED) AFFIRMATIVE DEFENSE MUST BE DETERMINED BASED SOLELY UPON THE PEOPLE’S PROOF AT TRIAL; IT WAS (HARMLESS) ERROR FOR THE COURT TO MAKE THAT DETERMINATION PRIOR TO TRIAL (FOURTH DEPT).
Restitution to Police Department Re: Expenses of Drug Bust Proper
QUESTION OF FACT WHETHER LADDER WAS DEFECTIVE AND WHETHER ADDITIONAL SAFETY DEVICES WERE REQUIRED, SUMMARY JUDGMENT ON LABOR LAW 240(1) CAUSE OF ACTION PROPERLY DENIED.
PLAINTIFF DID NOT DEMONSTRATE THE CONTINUITY OF OWNERSHIP ELEMENT OF THE DE FACTO MERGER DOCTRINE SUCH THAT THE ASSETS OF ONE DEFENDANT SHOULD BE USED TO SATISFY THE DEBT OF ANOTHER (FOURTH DEPT).
RESTITUTION SHOULD NOT HAVE BEEN ORDERED BECAUSE IT WAS NOT PART OF THE PLEA AGREEMENT, THE ARGUMENT SURVIVES THE GUILTY PLEA AND THE WAIVER OF APPEAL; DEFENDANT’S CONTENTION HE WAS DEPRIVED OF HIS RIGHT TO COUNSEL DID NOT SURVIVE THE WAIVER OF APPEAL BECAUSE DEFENDANT DID NOT ASSERT THE DEPRIVATION INFECTED THE PLEA AGREEMENT OR THE VOLUNTARINESS OF THE PLEA (FOURTH DEPT).
JUDGE SHOULD NOT HAVE GRANTED RELIEF WHICH WAS NOT REQUESTED IN THE MOTION PAPERS, QUESTIONS OF FACT PRECLUDED SUMMARY JUDGMENT ON SOME ISSUES IN THIS SLIP AND FALL CASE (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 © 2026 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