Pacheco v. Scoblionko
532 A.2d 1036 (Me.1987)
Facts: The plaintiff prepaid $3,100 for his kid’s summer camp. In the contract the plaintiff signed, it said that if a refund request was made after May 1, the camp would keep the whole amount paid to date. The plaintiff asked for a refund on June 14 and the defendant refused to give back any money. The plaintiff sued and recovered the entire $3,100 at trial. The defendant appealed.
Issue: Is the refund clause in the contract enforceable?
Rule: A liquidated damages clause in a contract is enforceable if the damages are difficult to predict and the damages fixed in the contract are a reasonable prediction of what it will take to compensate the injured party.
Analysis: The court said that the defendant failed to show what actual damages were caused or could have been caused by the plaintiff’s cancellation. Therefore, the damages specified were ruled “excessive” and “disproportionate”.
Conclusion: The court upheld the verdict for the plaintiff.