, we must determine whether it is imposed as an unlawful penalty.” Kesterson v. Juhl, 157 Or.App. 544, 548 (1998) (citing DiTommaso Realty, Inc. v. Moak Motorcycles, Inc., 309 Or. 190, 195 (1990)).
Mr. Ladieu argues this is an unenforceable liquidated damages provision because the values assigned to the Cassettes are unreasonable and are substantially higher than the actual damages Rentrak suffered as a result of his sale of Cassettes. Under Oregon law, "whether a contract contains an unlawful liquidated damages clause is determined by a two-step inquiry."Kesterson v. Juhl, 970 P.2d 681, 683, 157 Or. App. 544, 548 (Or. Ct. App. 1998). "First, [the Court] must determine whether the disputed clause actually is a liquated damages clause."
Under Oregon law, "whether a contract contains an unlawful liquidated damages clause is determined by a two-step inquiry." Kesterson v. Juhl, 970 P.2d 681, 683, 157 Or. App. 544, 548 (Or. Ct. App. 1998). "First, [the Court] must determine whether the disputed clause actually is a liquated damages clause."
Under Oregon law, "whether a contract contains an unlawful liquidated damages clause is determined by a two-step inquiry." Kesterson v. Juhl, 970 P.2d 681, 683, 157 Or. App. 544, 548 (Or. Ct. App. 1998). "First, [the Court] must determine whether the disputed clause actually is a liquated damages clause."
” Kesterson v. Juhl, 157 Or.App. 544, 548 (1998) (citing DiTommaso Realty, Inc. v.Moak Motorcycles, Inc., 309 Or. 190, 195 (1990)). There is no need to reach the second question if the first is answered in the negative.
This is a legal determination that is appropriate for summary judgment. Kesterson v. Juhl, 157 Or. App. 544, 548, 970 P.2d 681 (1998). Courts undertake a two-step inquiry in evaluating whether a provision awards unenforceable liquidated damages. The court first determines whether the disputed clause actually is a liquidated damages clause, defined as "words of a contract that set the amount of damages to be recovered by one party from another in case of the latter's failure to perform as agreed."
Oregon courts use a two-part inquiry to determine whether a contract provision is an unlawful liquidated damages clause. Kesterson v. Juhl, 970 P.2d 681, 683 (Or. Ct. App. 1998). First, the court "determine[s] whether the disputed clause actually is a liquidated damages clause."
“[T]he ‘initial point of departure' for analyzing the validity of a liquidated damages provision is ORS 72.7180(1).” Kesterson v. Juhl, 970 P.2d 681, 683 (Or. Ct. App. 1998) (quoting Illingworth, 688 P.2d at 390). O.R.S. § 72.7180(1) provides that:
The parties agree the provision is a liquidated damages clause. To determine whether such a clause may amount to an unlawful penalty in Oregon, a court considers (1) whether the liquidated damages amount is reasonable in light of the anticipated or actual harm caused by the breach; (2) how difficult damages would be to prove; and (3) how difficult obtaining another adequate remedy would be. Kesteron v. Juhl, 157 Or. App. 544, 548-49, 970 P.2d 681 (1998). Because of the factual issues precluding summary judgment on the issue of these fees, the question as to whether the fees are invalid is not yet reached.
In Illingworth, the court held that a contract provision is one for liquidated damages if it contains "words . . . that set the amount of damages to be recovered by one party from another in case of the latter's failure to perform as agreed."Kesterson v. Juhl, 970 P.2d 681, 683 (Or. App. 1998).