Actor and producer sign written contract

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Reference no: EM133682537

Question

Actor and Producer sign a written contract under which Actor is to act in a play produced by Producer for a ten-week season for $1,000 per week-i.e., a total of $10,000. Actor is to be paid $1,000 at the end of any given week. A term in the contract provides that "if either party does not perform his duties under this agreement, then he will pay $20,000 as liquidated damages and not as a penalty." At the end of the ninth week, after Actor has been paid, he quits to take another job. The play is sold out, and Actor is replaced by a suitable understudy at no additional cost to Producer. Producer does not lose any revenue. Producer brings a breach of contract claim against Actor seeking the $20,000 in liquidated damages. Will the court enforce the agreed-upon damages clause? If the court does not enforce the liquidated damages clause, then how much will Producer likely receive as damages? Explain your reasoning.

Reference no: EM133682537

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