Allen and Pat McCain own Green Park Inn, Inc., which operates the Green Park Inn. In 1996,

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Allen and Pat McCain own Green Park Inn, Inc., which operates the Green Park Inn. In 1996, they leased the Inn to GMAFCO, LLC, which is owned by Gary and Gail Moore. The lease agreement provided that, in case of a default by GMAFCO, Green Park, Inc., would be entitled to $500,000 as “liquidated damages.” GMAFCO defaulted on the February 2000 rent. Green Park Inn, Inc., gave GMAFCO an opportunity to cure the default, but GMAFCO made no further payments and returned possession of the property to the lessor. When Green Park Inn, Inc., sought the stated liquidated damages, the Moores refused to pay. Green Park Inn, Inc., filed suit in a North Carolina state court against the Moores, GMAFCO, and their bank to obtain the $500,000. The defendants contended in part that the lease clause requiring payment of “liquidated damages”was an unenforceable penalty provision. The court ordered the defendants to pay Green Park Inn, Inc. The defendants appealed to a state appellate court. What was the result? Explain. Green Park Inn, Inc. v. Moore, 149 N.C. App. 531, 562 S.E.2d 53 (2002).


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The Legal Environment of Business A Critical Thinking Approach

ISBN: 978-0132664844

6th Edition

Authors: Nancy K Kubasek, Bartley A Brennan, M Neil Browne

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