Jason Reignbows was a well known comic who signed a contract to appear in Moe Tell's night club.  He agreed to perform his act for five consecutive nights and was to receive $5,000 as compensation.  Because Jason had a reputation for a drinking problem, Moe insisted that the contract contain a clause that provided that if Jason was intoxicated; Moe could withhold ten percent (10%) of his pay as liquidated damages. On the first night, Jason had several drinks prior to his performance, but the audience appeared to enjoy the show and gave him a standing ovation at the end.  The review in the local paper said that Jason was "a very funny and entertaining drunk" and recommended that people see the show.  Jason did not consume alcoholic beverages at all during the remaining four nights. The remaining four shows were sold out and very profitable for Moe.  At the end of the week, Moe withheld $500 as damages.  Jason objected because he was only intoxicated for one performance and despite that, he was very successful and generated a large profit.  Jason sued Moe in small claims court for the $500 he withheld.  Moe's defense was that the liquidated damage provision of the contract should be enforced. 

   You are the judge.  Will you award Jason the $500 or will you allow Moe to keep it?  Explain the reasons for your decision.

Answer rating: 100% (QA)

As the judge I would likely award Jason the 500 The purpose of a liquidated dam... View the full answer