Emery v. Boyle

Citations

• 200 Pa. 249
• 49 A. 779
• 1901 Pa. LEXIS 476

Syllabus

<p>Contract—Liquidated, damages—Penalty.</p> <p>Whether a sum named as compensation for breach of contract is to be deemed a penalty to secure its fulfilment or damages liquidated by the parties themselves, is primarily a question of intention to be gathered from the agreement with the aid of such light as can be derived from circumstances. Equity will regard a penalty as intended to secure the fulfilment of a contract and will limit a recovery to the loss actually sustained, notwithstanding the stipulation of the parties, on the principle that one party should not be allowed to profit by the default of another. Compensation, not forfeiture, is the equitable rule; but effect will be given to the intent of the parties as ascertained unless it conflicts with some rule of law or equity.</p> <p>Generally where the covenant is for the performance or the non-performance of a single act or of several acts, damages for the breach of which cannot be measured by any fixed standard, the sum named if reasonable in amount will be considered as liquidated damages. The factthatthere are a number of stipulations of different degrees of importance does not vary the rule, if the measure of damages for all of them is uncertain, but regard should be had to it in ascertaining the intention.</p> <p>■ Where a contract in settlement of an action for libel provided that the defendant in the libel suit should not publish any libelous or defamatory article reflecting in any way upon the business, social or personal character of the other party, and the contract also provided that in case of a breach judgment might be entered against the defendant for “ $5,000, liquidated damages,” and thereafter the defendant published an article charging the plaintiff with bribing voters in his candidacy for congress, judgment may be-entered for the whole sum of ¿5,000, as liquidated damages.</p>