Vicarious Liability / Indemnity; Liquidated Damages 2
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Statutes
Damages payable by either party for default, or any other act or omission, including indemnity for loss or diminution of anticipated tax benefits or loss or damage to lessor's residual interest, may be liquidated in the lease agreement but only at an amount or by a formula that is reasonable in light of the then anticipated harm caused by the default or other act or omission. (KRS § 355.2A-504)
Cases
Comments
A liquidated damages clause will generally be found reasonable, and therefore in compliance with the statute, where two parties contemplated damages ahead of time and set forth an agreed upon method to calculate damages (GATX Corp. v. Appalachian Fuels, LLC, 2011 U.S. Dist. LEXIS 61744 (E.D. Ky 2011)). Because the only requirement is “reasonable in light of the then anticipated harm,” such provision will govern unless unreasonable (Id).
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Jerad T. Whitt
The statutory information was edited and reviewed with the support of MultiState
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