O'Brian v. Langley School
Supreme Court of Virginia
507 S.E.2d 363 (1998)
William and Fern O'Brian (defendants) signed an enrollment contract with the Langley School (plaintiff) requiring written withdrawal notice by June 1, with a liquidated damages clause setting late-withdrawal damages at a full year's tuition since the school's actual damages would be difficult to assess. The O'Brians withdrew their daughter on June 13 without paying, and Langley sued to enforce the liquidated damages clause plus fees; in interrogatory responses, Langley stated it had no duty to try to fill the vacated spot, and when the O'Brians moved to compel further discovery on this and related points, the circuit court refused and granted Langley summary judgment.
Whether a party who has breached a contract containing a liquidated damages clause retains the right to conduct discovery and challenge the clause as an unenforceable penalty, before the court may grant summary judgment enforcing it.