Scofield v. Tompkins

Citations

• 95 Ill. 190
• 1880 Ill. LEXIS 167

Syllabus

<p>1. Contract—liquidated damages—construction. The fact that the parties to a contract fix a sum to be paid and call it liquidated damages, does not always control the question as to the measure of recovery for a breach. The courts will look to see the nature and purpose of fixing the amount of damages to be paid, and if it appears to have been inserted to secure the prompt performance of the agreement, it will be treated as a penalty, and no more than the actual damages proved can be recovered.</p> <p>2. Where a contract for the sale of land provided for the payment of over $22,000 by a day named, for the land, which was made a condition precedent and time made of the essence of the contract, and that in case of default in payment of the price, or any part thereof, when due, the vendor might declare the contract null and void and retain any sums of money paid, and might sue and recover from the purchaser the whole or any part of the price that might be due and unpaid, as liquidated damages, and nothing was paid and a forfeiture declared, it was held, in an action of covenant upon the agreement to recover the entire price as liquidated damages, that a demurrer was properly sustained to the declaration.</p> <p>3. / The parties may agree upon any sum as compensation for the breach of a contract which does not manifestly exceed the amount of the injury suffered, but when it is manifestly above that sum and the damages are such as can readily be shown, such sum so inserted in the contract will be regarded merely as a penalty to insure prompt payment or performance. f</p>