How would the court determine whether the liquidated damages clause is valid? Is this clause valid?
Forrest Gump is a famous table tennis player. He enters into a contract with Alabama Sports Marketing to advertise the latest ping pong game and to serve as the computer-generated imagery (CGI) model for the development of the video game. Gump is perfect for this job as there are not many world famous ping pong players who have a following similar to his. The game is set to start development on March 1 and will be completed on July 31, so the game can be released at Thanksgiving—a major video game release period. Both parties have agreed and stipulated to the fact that the game must be completed on time to maximize the profits.
Gump will make 20% of the net proceeds from the sales of the game. In addition, the contract has a liquidated damages clause that indicates that if Gump does not participate in the marketing, does not serve as the CGI model, or breaches the contract in any way, he will owe Alabama Sports Marketing $2 million.
Based on this fact pattern and the information presented in this unit, answer the following questions. Your response must be at least two pages in length and utilize key legal terms in contract law.
- One day, Gump gets into an argument with the developer. Gump refuses to perform any work until the problem is solved. In this situation, can Alabama Sports Marketing seek specific performance of the contract? If yes, why? If no, why not?
- How would the court determine whether the liquidated damages clause is valid? Is this clause valid? Explain your answers. Evaluate the equitable and legal remedies available for breach of contract.
One source is required for your paper. Include an introduction in your paper. Adhere to APA Style when creating citations and references for this assignment. APA formatting, however, is not necessary.
Requirements: .doc file | APA | Case Study | 3 pages, Double spaced
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