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Re: Groklaw attacks Alexander

From: Alexander Terekhov
Subject: Re: Groklaw attacks Alexander
Date: Tue, 25 Aug 2009 13:41:46 +0200

David Kastrup wrote:
> Thanks for the quotations.  As I said, contractual damages (which are
> not applicable for a mere license) are spelled out and thus are not
> subject to be replaced by nominal charges.  In absence of contractually
> specified damages (either because of a license, or because of not being
> spelled out inside a contract), actual damages are awarded.  Where those
> can't be shown, nominal damages may be awarded.

First off, you wrote before that

"Nominal charges are _exactly_ used when a party would have the right to
claim _actual_ damages rather than _contractual_ damages."

which is utter crapola.

Both "actual damages" and "nominal damages" are "contractual damages"

There is also "liquidated damages" which is pre-estimated (capped)
"actual damages".

I gather that what you call "contractually specified damages" is
actually known as Vertragsstrafe (contractual penalty).

And that has nothing to do with contractual damages. See e.g.

"The American Law Reports annotation on liquidated damages states,
"Damages for breach by either party may be liquidated in the agreement
but only at an amount that is reasonable in light of the anticipated or
actual harm caused by the breach. ... A term fixing unreasonably large
liquidated damages is unenforceable on grounds of public policy as a
penalty" (12 A.L.R. 4th 891, 899).

A penalty is a sum that is disproportionate to the actual harm. It
serves as a punishment or as a deterrent against the breach of a
contract. Penalties are granted when it is found that the stipulations
of a contract have not been met. For example, a builder who does not
meet his or her schedule may have to pay a penalty. Liquidated damages,
on the other hand, are an amount estimated to equal the extent of injury
that may occur if the contract is breached. These damages are determined
when a contract is drawn up, and serve as protection for both parties
that have entered the contract, whether they are a buyer and a seller,
an employer and an employee or other similar parties."


"In a contract, the parties may name a sum to be payable in the event of
breach. If such sum is a genuine pre estimate of loss it is termed
liquidated damages, and if it bears no reflection on the loss suffered,
it is termed a penalty. Courts are reluctant to enforce penalty clauses
and in such cases the sum stipulated is normally reduced. It has been
perceptively observed by Fansworth that in comparison to the bargaining
power which parties enjoy in negotiating their substantive contractual
rights and duties, their power to bargain over their remedial rights is
surprisingly limited. They are not at liberty to name an extravagant sum
having no relation to the breach, for fear of it being construed as a
penalty. It is interesting to contrast this with the law relating to
consideration. A man may sell his car for a handful of marbles, and the
law cares not, as long as he is satisfied. Yet the law would give no
peace to a man who claims ten thousand rupees for failure to deliver a
handful of marbles, branding such a clause penal."


(GNG is a derecursive recursive derecursion which pwns GNU since it can 
be infinitely looped as GNGNGNGNG...NGNGNG... and can be said backwards 
too, whereas GNU cannot.)

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