On the other hand, the $200 a day initially appears to be a figure that tries to compensate for sales losses from not having the business open; thus, it could be considered a consequential damage or foreseeable losses. Nevertheless, if the delay was to extend into the month of November, the losses from sales would be higher than the ones from the previous month, given the seasonal behavior of this type of business. With this new scenario in mind, the owner would not be recovering enough compensation from the contractor to cover for her losses. Therefore, in my view, the initial provision was not trying to be compensatory in nature, as it did not increase in value through time (e.g. $200 first 30 days and $400 for the next period). Given these points, I feel that a court should answer “yes” to the questions that help distinguish a liquidate damage provision from a penalty. As a result, my opinion is that the owner should
On the other hand, the $200 a day initially appears to be a figure that tries to compensate for sales losses from not having the business open; thus, it could be considered a consequential damage or foreseeable losses. Nevertheless, if the delay was to extend into the month of November, the losses from sales would be higher than the ones from the previous month, given the seasonal behavior of this type of business. With this new scenario in mind, the owner would not be recovering enough compensation from the contractor to cover for her losses. Therefore, in my view, the initial provision was not trying to be compensatory in nature, as it did not increase in value through time (e.g. $200 first 30 days and $400 for the next period). Given these points, I feel that a court should answer “yes” to the questions that help distinguish a liquidate damage provision from a penalty. As a result, my opinion is that the owner should