Kvassay v. Murray
Kansas Court of Appeals
808 P.2d 896 (1991)
Michael Kvassay (plaintiff) contracted to sell 24,000 cases of baklava to the Murrays (defendants). The contract provided that the Murrays would be Kvassay’s only customer and that, if the Murrays repudiated or would not accept delivery, Kvassay would be entitled to liquidated damages of $5.00 per undelivered case. The amount of liquidated damages was based on Kvassay’s calculation, made prior to the contract, that he stood to profit $3.55 per case after paying himself or $4.29 per case if he did not pay himself. After 3,000 cases were delivered, the Murrays refused to accept any more. Kvassay sued them for $105,000, based on the liquidated damages provision. The trial court ruled that the liquidated damages provision was void as a penalty because Kvassay had only earned about $20,000 the previous year.
Rule of Law
Holding and Reasoning (Walker, J.)