Fingerlakes Aquaculture, LLC v Progas Welding Supply, Inc.

Group 4 based on several facts which were presented by Progas to solve the problem between two companies. To answer the question Who is correct? Why? , group 4 concluded that Progas was correct and should be abled to void the recovery amount. Whether a contractual provision represents an enforceable liquidation of damages or an unenforceable penalty is a question of law to be resolved after considering the nature of the contract and the circumstances at the time it was entered into. (see JMD Holding Corp. v Congress Fin. Corp., 4 NY3d 373, 379 [2005]). Here are defendants reasons gave by group 4 to answer the question Why? 1) The plaintiff had received tanks from the defendant. Defendant provided several 50-gallon cylinders in September 1999, then a 3,000-gallon tank in December 1999 or January 2000. 2) The stipulated damages were plainly and grossly disproportionate to the probable loss.The clause at issue provides for a $400 per day "fine" for nondelivery of the 13,000-gallon tank. Defendant proved, through testimony of plaintiff's officers, that insignificant financial loss would be sustained by the failure to deliver the tank. Rather, loss would be sustained by the failure to timely deliver oxygen, an event not addressed by the penalty clause. 3) Plaintiff failed to prove actual damages as a result of defendant's failure to deliver the 13,000-gallon tank. Although plaintiff's officers testified that the fish were "off feed" because of an inadequate oxygen supply for 26 days in the 210-day period from March 2000 to September 2000, the evidence as to actual damages was hypothetical and lacked a foundation in the record. The failure of plaintiff's business venture was more than likely related to its inadequate business plan and faulty construction, not the size of the oxygen tank. Under the circumstances here, an award to plaintiff of $292,000 would excess the actual harm sustained. Our comment: We agree with group 4 that there were three suitable reasons which the court used to give the conclusion for the case. Besides, group 4 used the right related concepts for this situation and they also emphasized on substantial performance which was concluded before giving the answer that ProGas won over Fingerlakes Aquaculture. But when they presented those three factors, we thought it would be better if the part about Fundamental reason of financial loss, they mentioned about the actual damage was less than $292 000 in the slide again. However, we expect group 4 to have a US precedent case but we did not see it during the presentation, which made group 4 could not illustrate their purpose well.