LIQUIDATED DAMAGES

The cats want to rent a convertible to go on vacation to the San Juan Islands to visit a retired friend of theirs, an old Tom with gray whiskers and missing some fur.    We decide to use the refund that we received from our return of the play structure to rent a convertible for the trip.  Having lost your job as a delivery van driver due to the unfortunate incident with the play structure, you are now working at a car rental agency.

You see us approaching the car rental agency where you work and quickly go to the break room and shut the door.  Seeing no one at the counter, we help ourselves to coffee while we wait.   Realizing that it is hopeless, you return and ask if you can help us.  The cats have selected the convertible that they want, and you prepare the rental contract.

“Initial here, here, here, there, there, and there,” you say.

I initial all of the places indicated on the six page rental contract.

“We require a deposit of one day’s rental,” you say, and I give you my credit card information. We then go home to prepare for the trip.  We are to leave in two days.

The morning that we are to leave, the cats decide that they no longer want to ride in a convertible.  They are concerned that the wind will blow their fur out of place, and they want to look their best when we arrive.  I call you to cancel our rental contract.

“You will forfeit one day’s rental on the convertible since you are cancelling less than 24 hours prior to your scheduled departure,” you say.  “That will be $128.50 on your credit card.”

“What!?” I howl over the phone.  “Where does it say that in the rental contract?”

“On page five, line 76,” you reply, from memory.

I turn to page five and read line 76 and see that I have agreed to a liquidated damages provision. Liquidated damages are an amount agreed to be paid in the event of a breach of contract.  “You’re right,” I say, as I glare at the cats who are batting their toy mouse back and forth.

A smile crosses your mouth as you say good-bye, hang up the phone and charge my credit card.

Allen Drescher has practiced law in Ashland and Southern Oregon since 1973.  His practice areas include real estate and business law, estate planning and elder law.

© Allen Drescher