First Thread Discussion: Debra Caughan
Uzan v. 845 UN Limited Partnership, 10 A.D.3d 230, 778 N.Y.S.2d 171, 2004 N.Y. App. Div. Lexis 8362 (Supreme Court of New York, Appellate Division, 2004)
The liquidated damage clause is assuredly enforceable and the 8 million dollar down payment from Cem Uzan and Hakan Uzan is rightfully belonging to and remaining with 845 UN Limited Partnership concerning payments paid for condominiums to be built as liquidated damages for the breach of their contract. On Oct. 19th 2001, the multi billionaire buyers wanted their monies returned after the terrorist attacks in NYC, on 9/11, stating that 845 UN did not inform them of potential terrorist attacks on trophy buildings in NYC for which they deposited a 25% down payment on luxury condominiums. They did not attend their closing and went passed the 30 day cure period available. They breached the contract to not purchase and were demanding monies returned under the liquidated damage clause. The main questions in this case would be is the contract fair and was there disparity of bargaining powers between the parties involved? I would like to add that one could not forfeit down payments on luxury condominiums in major cities based on notifications “potential” threats of this nature.. Would potential acts of nature and man all have to be properly notified and the builder or sellers forfeit down payments? This would be chaotic to business in and of itself if “potentials "of this nature were necessitations to refunds. Keeping in point of the law and its applications, we find more pointedly that a liquidated damages clause in contracts stipulates damages to be paid by the breaching party. First, the clause was in the contract. The liquidated damage was not found to be a penalty. Under the Lawrence Rule, real estate down payments are subject to limited supervision. To be refunded with the showing of disparity of bargaining power between the parties, duress, fraud, illegality or mutual mistake. None of the above conditions according to law have been met. The Lawrence Rule must be challenged at the beginning of the bargaining process and not the end. The Turkish billionaires were of equal or surpassing level in bargaining abilities with the sellers. They just did not show up at closing and were not adhering to the 30 day cure time period. In addition, both were not only sophisticated parties with no disparity of bargaining powers, more importantly, they were also equal in their knowledge of investments in an uncertain market. In view of this, these earnest monies under this particular contract are in all reality, consideration for the option to purchase. Therefore in my estimation, and according to their sophisticated level of knowledge being no novices to this process, the buyers know they are providing this consideration to lock in a price as option to purchase with a stated liquidated damages clause, made by bargainers without show of disparity in bargaining powers and unable to meet any of the conditions to refund.
Second Thread Discussion: Ashay Samuels
Cem and Hakan Uzan purchased condos on the top floor of the Trump towers. On April 26, 1999 they paid the 10% down payment installment for the penthouse units when they signed the purchase agreements. They paid the second 7 1/212% installment in April 2000, and the third 7 1/212% installment in October 2000. The total 25% down payment of approximately $8 million was placed in an escrow account. After the 9/11 attack Cem and his Brother Hakan feared that the trump towers because of its height would be susceptible to future terrorist attacks. They failed to appear at the October 19, 2001 closing, resulting in their default. On October 19, 2001, plaintiffs' counsel stated: “We believe that our clients are entitled to rescind their Purchase Agreements in view of the terrorist attack which occurred on September 11 and has not abated.” That same day 845 UN sent plaintiffs default letters, notifying them that they had 30 days to cure. On November 19, 2001, upon expiration of the cure period, the sponsor terminated the four purchase agreements. The IAS court granted defendant partial summary judgment, finding that plaintiffs forfeited the portion of their down payment amounting to 10% of the purchase price. The court held that the remainder of the down payment was subject to a liquidated damages analysis to determine whether it bore a reasonable relation to the sponsor's actual or probable loss. Defendant appeals from that portion of the order which denied it full relief. If the court was to allow the Uzan brothers to recover their down payment it would be like saying it was okay for them to breach a contract which they signed and agreed to. A liquidated damages clause specifies a predetermined amount of money that must be paid as damages for failure to perform under a contract. The amount of the liquidated damages is supposed to be the parties’ best estimate at the time they sign the contract of the damages that would be caused by a breach. I do believe that the liquidated damage clause enforceable because the Hakan brothers forfeited their down payment when they did show up to the closing. These terms were stated in the purchase agreement that they had previously signed.
Respond to these two threaded discussion. Each threaded discussions in a paragraph. Read and respond to at least two other students' posts. If differences of opinion occur, debate the issues professionally and provide examples to support your opinions.
Please write in basic English as I am an international students as my English is my third language.