Lake Ridge Academy v. Carney - Essay Example

first Lake Ridge Academy versus Carney The liqui d damages awarded in the case of Lake Ridge Academy versus Carneyby the court seems to be fair considering the situation. Liquidated damages are usually designated during the formation of the contract, which explains how much the injured party would receive in case of breach of contract in any form. In this case, Carney paid part of the tuition fees to Lake Ridge Academy to secure a seat for his son during next academic year, and agreed to pay the rest before August 1 in a written contract with the Academy.

The contract clearly mentioned that he would be liable for full tuition fees if he does not inform his decision of not making his son join them before August 1. Carney failed to abide by the contract and informed his decision of not making his son join them later than the agreed date. It is important to note that Lake Ridge’s clause about liquidated damages also falls within limits of common law because Lake Ridge is asking for the tuition fee, which is probably the rough estimate of the damages caused by Carney’s decision, and secondly, because Lake Ridge cannot calculate accurate value of the damages in advance or during the contract for which they mentioned that the applicant would be liable to pay full tuition fees in case of any breach of contract.

Lake Ridge’s budge estimation process is subject to certain and uncertain or unforeseen events, and hence the loss of one student cannot be termed as completely unliquidated damage. Because the unliquidated damages are not ascertained, Carney can be given the benefit of doubt by the court; however, written documentation of agreeing to pay complete tuition fee in case of breach of contract cannot be overruled by the court. The court’s ruling cannot be treated as a penalty because Lake Ridge is demanding complete tuition fees as applicable to one student for one academic year.

Had they not granted the seat in advance to Carney’s son, they could have recovered that amount from another student. Lake Ridge’s budgeting process depends upon the fees collected from each student. In case of any change or loss, it would affect their entire budget, which would further impact many other people associated with Lake Ridge. By demanding one student’s complete tuition fees, they are well within the limits, and hence this cannot be treated as a penalty. Lake Ridge is fair on its part as it is only trying to acquire its funds, which it deserves because it promised a seat to one student; Lake Ridge is not trying to punish the party that breached its contract in any way.

In case it was trying to punish, which could be termed as penalty, it would have demanded an exorbitant sum of money or could have levied other charges against Carney. Considering all these facts, it is certain that the court’s ruling in the case of Lake Ridge Academy versus Carney is fair, and that the liquidated damages awarded are fair representation of the damages suffered by the school. In the absence of liquidated damages clause, the charge could be termed as penalty, which could be of any amount, which could not have helped in mitigating the loss to either party.