Summary
In Wojciechowski v Birnbaum, 191 AD2d 247 (1st Dept. 1993), the Court held that a liquidated damages provision for $63,500 on a $630,000 contract was not "unreasonably large" and therefore could not be considered a penalty; making the provision enforceable.
Summary of this case from Friedman v. Penuel Pentecostal TabernacleOpinion
March 11, 1993
Appeal from the Supreme Court, New York County (Edward Lehner, J.).
We agree with the IAS Court that plaintiffs breached the contract and that defendant Birnbaum is therefore entitled to retain the down payment. Plaintiffs argue that an issue of fact exists concerning the scope and meaning of the September 12 letter of their counsel, but we find no ambiguity, misunderstanding, or antecedent fraud. Furthermore, assuming arguendo that this $630,000 contract is governed by UCC article 2, forfeiture of the deposit cannot be equated with an imposition of a penalty in violation of UCC 2-718, since in the circumstances presented, namely, the sale of the apartment some seven months later for $625,000, liquidated damages in the amount of $63,500 cannot be deemed unreasonably large.
Concur — Sullivan, J.P., Rosenberger, Wallach and Asch, JJ.