Boyle v. Petrie Stores Corp.
Supreme Court of New York
518 N.Y.S.2d 854 (1985)
Boyle (plaintiff) gave up a well-paid job to become president and CEO of Petrie Stores (defendant) under a five-year, attorney-negotiated contract entitling him to over $2.1 million in liquidated damages if fired without material breach or just cause — an amount that didn't exceed his total five-year compensation. After just two months, the temperamental board chairman had Boyle fired following a heated argument. Boyle found another job but sued for the liquidated damages; Petrie Stores argued the amount was really an unenforceable penalty.
Whether a liquidated-damages provision, negotiated at arm's length between sophisticated parties, is enforceable in the absence of unconscionability or contrariness to public policy.