Liquidated Damages Clauses

"Damages payable by either party for default of a lease, 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. N.H. Rev. Stat. Ann. § 382-A:2A-504.

In the UCC as adopted by the state, damages for breach by either party may be liquidated in the agreement but only at an amount which is reasonable in the light of the anticipated or actual harm caused by the breach, the difficulties of proof of loss, and the inconvenience or non-feasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty. N.H. Rev. Stat. Ann. § 382-A:2-718."

New Hampshire courts will enforce a liquidated damages clause if: (1) the damages anticipated as a result of breach are uncertain or difficult to ascertain, (2) the parties intended to liquidate damages in advance, and (3) the amount agreed upon is reasonable and not greatly disproportionate to the presumable loss or injury. Holloway Automotive Group v. Lucic, 163 N.H. 6, 10 (2011). In addition, if the liquidated damages are grossly disproportionate to actual ascertainable damages at trial, the clause will not be enforced. Id. at 10.