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Truck Rent-A-Center, Inc. v. Puritan Farms 2nd, Inc.

Court of Appeals of New York
361 N.E.2d 1015 (1977)


Puritan Farms 2nd, Inc. (Puritan) (defendant) leased 25 new milk delivery trucks from Truck Rent-A-Center, Inc. (lessor) (plaintiff). The lessor was to service the trucks and Puritan was to make weekly payments. The lease included a liquidated damages provision stating that, upon Puritan’s breach, the lessor would be entitled to one-half of all the remaining rental payments due under the contract. In deciding upon this measure of damages, the parties contemplated the lessor’s substantial investment in purchasing the trucks, the uncertainty surrounding the lessor’s ability to re-rent or sell the trucks, and other costs incidental to a breach. After three years, Puritan terminated the lease agreement and returned the trucks to the lessor. The lessor sued Puritan to collect payment of the liquidated damages. The trial court found that Puritan had breached the agreement and that the liquidated damages provision was enforceable. The trial court calculated the liquidated damages to equal $88,677.60. The Appellate Division affirmed.

Rule of Law


Holding and Reasoning (Jasen, J.)

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