United Air Lines, Inc. v. Austin Travel Corp.
United States Court of Appeals, Second Circuit
867 F.2d 737 (1989)
Relevant factsFree
Austin's (defendant) contracts to lease United's (plaintiff) Apollo reservation and business systems included liquidated damages provisions triggered by early termination, and Austin breached by switching to a competitor's system before its contracts expired; United sued for the liquidated damages, and Austin countered that the provisions were unenforceable penalties, but the trial court upheld the clauses and awarded United $408,375.
IssueFree
Whether a liquidated damages clause will generally be upheld by a court, provided the liquidated amount is not actually a penalty.