Case Study : California And Hawaiian Sugar Company V. Sun Ship, Inc

703 Words Aug 10th, 2015 3 Pages
Case 16.1 Specific Performance: In the case of California and Hawaiian Sugar Company v. Sun Ship, Inc, the issue of specific performance and liquidated assets arise. C&H commissioned the design and construction of a one off ship to meet their needs. Sun Ship agreed to the contract which included a liquidated damages clause of $17,000 per day that the ship was late in delivery or construction. The facts of the case are this and there is no argument of this. Sun ship did not complete their end of the contract until eight and one half months after the agreed upon date. C&H filed suit against Sun Ship for payment of $4,413,000 under the liquidated clause of the contract. C&H contracted out and was able to move their cargo during the period in which they did not have their ship. The actual damages incurred to C&H by this nonavailability were $368,000. Due to this information Sun Ship refused to pay the liquidated clause payment. According to the UCC 2-718, “(1) 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 nonfeasibility of otherwise obtaining an adequate remedy. A term fixing unreasonably large liquidated damages is void as a penalty” (UCC). This means that the courts can determine that if the amount of money in the clause is unreasonable or much higher than the actual damage…

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