This ppt is intended to be used in an ILEC course. It compares British law and Argentinean Law. Liquidated Damages

1. LIQUIDATED DAMAGES AND
PENALTY CLAUSE
Dra. Adela Pérez del Viso
Colegio de Abogados de San Luis. Año 2012.
Fuente: International Legal English (Cambridge/
Translegal) y Disposiciones legales argentinas.

2. SIMILARITIES
BOTH ARE CLAUSES SET
FORTH IN THE CONTRACT.
CLAUSE FOR FUTURE
BREACH OF CONTRACTS.
COMPENSATION AGREED
UPON BY THE PARTIES.
AMOUNT OF MONEY THAT
COMPENSATE THE NON –
BREACHING PARTY LOSS.

3. ELEMENTS OF AN ENFORCEABLE
LIQUIDATED DAMAGES CLAUSE
 The anticipated damages are uncertain in amount
or difficult to prove.
 The purpose is exclusively TO DETERMINE
damages in advance, AND NOT to punish a
breaching party or to deter a breach of contract.
 The stipulated amount of money is REASONABLE,
not disproportionate in relation with the presumed
loss.
 There is no abuse of bargaining power.
 For all of that elements, the Court looks to the tme
of contract in determining the reasonableness of
the amount of damages set forth in the contract.

4. DO WE HAVE THESE KIND OF
PROVISIONS IN ARGENTINA?
 CLAUSULA PENAL en los contratos.
 INTERESTS AND ANATOCISM.(620 - 623 CC)
 PROVISIONS AS REGARDS GOOD WILL (1198
C.C.)
 PROVISIONS AS REGARDS CONSUMMER
RIGHTS (24664)
 PRECEDENTS (JURISPRUDENCIA) AS
REGARDS “I AGREE” CONTRACTS
(CONTRATOS POR ADHESION).

5. VERBS AS REGARDS WHAT A JUDGE DOES:
 POSITIVE:
 The judge HOLDS
that…
 The judge ASSESSES
whether…
 LOOKS to (…)
 DETERMINES THE
REASONABLENESS
of…
 ENFORCES …
 NEGATIVE:
 The judge IS RELUCTANT to
 GIVES LESS or NO WEIGHT
TO …
 DETERS MALICIOUS
CONDUCT.
 STRIKES DOWN provisions.
 PLACES LITTLE
IMPORTANCE to..
 Is HESITANT as to enforce…
 REVERSE/OVERTURNs/
UPHOLDS DECISIONS.
 DISMISS/ REJECTS.

6. TYPES OF BREACH:
 ANTICIPATORY BREACH:
 A party announces his intention not to fulfill the
contract.
 The non-breaching party can “take the other party
at his word” and consider that the notification
releases him from his contractual obligation to
perform.
 The non – b. party can bring an action for damages.
 The second option is to wait until the time when the
performance was to take place, still holding the
contract as prospective binding.

7. ANTICIPATORY BREACH OF C.
 On the other hand:
 Other position states that THE ANNOUNCEMENT
OF INTENT TO BREACH should be treated as an
offer to rescind.
 Not as a breach.
 Thus the other party would keep the option to
rescind until the date of performance, and the non
b. party would have to remain ready to perform,
because if it accepted the offer to rescind, that
would prevent any recovery.
 RELIANCE PRINCIPLE: If a party promises to do
s.t. in the future: commits to refrain from doing s.t.
that difficults to fulfil his promise.