Facts: On December 3. 1990. Vanderbilt and DiNardo executed an employment contract engaging DiNardo to be Vanderbilt’s caput football manager. On August 14. 1994. Paul Hoolahan. Vanderbilt’s Athletic Director. went to Bell Buckle. Tennessee. where the football squad was practising. to speak to DiNardo about a contract extension. In November 1994. Louisiana State University contacted Vanderbilt in hopes of talking with DiNardo about going the caput football manager for L. S. U. Hoolahan gave DiNardo permission to talk to L. S. U. about the place. On December 12. 1994. DiNardo announced that he was accepting the L. S. U. place. Vanderbilt sent a demand missive to DiNardo seeking payment of liquidated amendss under subdivision eight of the contract. Vanderbilt believed that DiNardo was apt for three old ages of his net wage: one twelvemonth under the original contract and two old ages under the Addendum. DiNardo did non react to Vanderbilt’s demand for payment.
History: Vanderbilt brought the action against DiNardo for breach of contract. DiNardo removed the action to federal tribunal. and both parties filed gestures for drumhead judgement. The territory tribunal held that subdivision eight was an enforceable liquidated amendss proviso. non an improper punishment. and that the amendss provided under subdivision eight were sensible. The tribunal held that Vanderbilt did non relinquish its contractual rights under subdivision eight when it granted DiNardo permission to speak to L. S. U. and that the Addendum was enforceable and extended the contract for two old ages. The tribunal entered judgement against DiNardo for $ 281. 886. 43. Dinardo entreaties to U. S. District tribunal.
Issues: Is section 8 of the contract an enforceable liquidated harm proviso and non an improper punishment under Tennessee jurisprudence and did Vanderbilt relinquish its right to liquidated amendss? Was the Addendum to the contract enforceable? Was the Addendum non a valid and adhering contract?
Rules of Law: In the instance both breach of contract and settlement harm clause was used. A term supplying for liquidated amendss will be enforceable merely if amendss would be hard or impossible to turn out or cipher at the clip of breach and if the liquidated amendss constitute a sensible estimation of either the awaited or the existent loss from breach. If amendss would be hard or impossible to turn out or cipher if a liquidated amendss term is non consistent with both of these demands it would be labeled a “penalty” and will be unenforceable.
Analysis: DiNardo foremost claims that subdivision eight of the contract is an unenforceable punishment under Tennessee jurisprudence and that Vanderbilt waived its right to liquidated amendss when it granted DiNardo permission to discourse the coaching place with L. S. U. Hoolahan gave DiNardo permission to speak to L. S. U. about their coaching place. He did non authorise DiNardo to end his contract with Vanderbilt. The employment contract required DiNardo to inquire Vanderbilt’s athletic manager for permission to talk with another school about a coaching place. DiNardo could research other training places. and so even leave Vanderbilt. topic to the footings of the liquidated harm proviso.
Second DiNardo says that Addendum to the contract was non enforceable The territory tribunal concluded that the Addendum was enforceable as a affair of jurisprudence because the parties acted as though the contract had been extended and because Larry DiNardo ne’er objected to the Addendum.
Finally. DiNardo claims that the Addendum did non go a binding contract. and hence. he is merely apt for the one twelvemonth staying on the original contract. non the three old ages held by the territory tribunal. District court’s judgement that the contract contained an enforceable liquidated harm proviso. and we affirm the part of the judgement reflecting amendss calculated under the original five-year contract. The territory court’s judgement reasoning that the Addendum was enforceable as a affair of jurisprudence.
Decision: The tribunal held that the harm clause was enforceable and sensible and ordered the former manager to pay for the amendss.