DOC'S JUNKIE MUSICK, INC., DOC'S JUNKIE MUSIC TOO, INC., WILLIAM BATCHELDER AND GRACEANNA BATCHELDER, APPELLANTS,
v.
ACTIVE ALARMS, INC., D/B/A RWA SECURITY CONSULTANTS, APPELLEE

Fla. 4th DCA | 1989-06-28
No. 88-1963
GLICKSTEIN and GARRETT, JJ., concur., WALDEN, J., dissents with opinion.
545 So. 2d 500 Florida District Court of Appeal, Fourth District (1989) Caution
Cited by 1 case

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Synopsis

This case addresses the enforceability of liquidated damages clauses in security alarm service contracts. The court upheld the trial court's awards of liquidated damages against appellants who terminated the contracts without payment, rejecting their argument that the damages were excessive.


Holding

The court held that the liquidated damages awards are enforceable and reasonable. The court rejected appellant's argument that the damages were excessive, finding that the awards bear a reasonable relationship to the contract price and comply with the legal standard for liquidated damages clauses.


Headnotes

[1] A liquidated damages clause in a contract is enforceable if the damages were uncertain at the time of contracting and the stipulated amount is not excessive or unreasonab…

[2] Liquidated damages awarded for breach of contract must bear a reasonable relationship to the contract price.

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Key Quotes

“Parties to a contract may stipulate as to what the consequences of a breach shall be and if the stipulation is reasonable, it will control and exclude all other consequences.”

Establishes the foundational principle that liquidated damages clauses are enforceable when reasonable

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Facts & Procedural History

Appellee contracted to provide security alarm monitoring services for appellant's three music store locations and appellant-owner's residence. The con…

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Opinion of the Court
PER CURIAM.

PER CURIAM.

Judge Walden adopted appellant’s argument that the amount of damages awarded was excessive because appellee would have had to pay fifty-five percent of the combined contract prices as expenses.

Appellee contracted to provide security alarm services for appellant. The amount of each contract for monitoring the three locations of appellant’s music stores was $4,080. The contract amount for monitoring appellant-owner’s residence was $960. Appellant concedes that each contract contains a liquidated damages clause providing after notice of nonpayment, “the entire remaining balance of the initial term or any extension thereof shall become immediately due and payable.” Appellant made no payments after terminating appel-lee’s services.

The trial court made the following awards as liquidated damages: $6,801.28 on the two contracts with Doc’s Junkie Musick, Inc., $3,530.64 on the contract with Doc’s Junkie Music, Too, Inc., and $896.24 on the contract with appellant-owner. Appellant’s argument does not take into consideration that the initial expenses incurred by appellee in purchasing the accounts from a third party were to be spread over the five year term of the various contracts. In addition, appellee is entitled to its lost profits.

Parties to a contract may stipulate as to what the consequences of a breach shall be and if the stipulation is reasonable, it will control and exclude all other consequences. Hatcher v. Panama City Nursing Center, Inc., 461 So. 2d 288, 290 (Fla. 1st DCA 1985). In deciding whether a liquidated damages clause is proper, a court should determine if the damages by their very nature were uncertain at the time of contracting and not excessive or unreasonable. Hawk’s Cay Investors v. Brandy Marine, 524 So. 2d 681, 683 (Fla. 4th DCA 1988).

We find the awards are in keeping with the foregoing principles and the well settled rule that liquidated damages should bear a reasonable relationship to the contract price. Hooper v. Breneman, 417 So. 2d 315, 317 (Fla. 5th DCA 1982).

GLICKSTEIN and GARRETT, JJ., concur. WALDEN, J., dissents with opinion.

Dissent
WALDEN, Judge,

WALDEN, Judge,

dissenting.

I would reverse the award of liquidated damages because, in my opinion, it was unconscionable to award appellee the total contract price over the remaining term of the five year contract without crediting or taking into account the fact that appellees would have had to pay out expenses of at least fifty-five percent of the total contract price during the remaining term. Hooper v. Breneman, 417 So. 2d 315 (Fla. 5th DCA 1982); Point East One Condominium v. Point East Developers, 348 So. 2d 32 (Fla. 3d DCA 1977); Peacock Hotel v. Shipman, 103 Fla. 633, 138 So. 44 (1931).

I respectfully dissent.


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