Re: Groklaw attacks Alexander

[Alexander Terekhov]

David Kastrup wrote:
[...]
> > "Nominal charges are _exactly_ used when a party would have the right to
> > claim _actual_ damages rather than _contractual_ damages."
> >
> > which is utter crapola.
> 
> Perhaps "contractual penalties" gives a better view?

But penalties are not damages you idiot.

Damages are the loss suffered by the non-breaching party in the event of
a breach.

The contract laws recognize a concept called "efficient breach" which
encourages breach of a contract if it's economically efficient to do so.
Compliance with a contract is almost always voluntary -- if you choose
not to comply, then you don't have to. You merely have to compensate the
non-breaching party for his expectancy interest (pay contractual
damages). 

Penalties are oppressive in nature and serve the purpose of deterring
the party labouring under the threat of their imposition from breaching
the contract. 

"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."

> 
> > Both "actual damages" and "nominal damages" are "contractual damages"
> > silly.
> 
> If they are not specified in the contract, they are not contractual.

Go to doctor, dak.

regards,
alexander.

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