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Lake River Corp. v. Carborundum Co.
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Lake River Corp. v. Carborundum Co., 769 F.2d 1284 (7th Cir. 1985).
Facts: Plaintiff agreed to build a new bagging system for Defendant under a contract with a liquidated damages clause. Defendant breached, and Plaintiff wanted damages according to the liquidated damages clause.
Holding: Held for Defendant.
Reasons: Although Plaintiff is entitled to damages, the liquidated damages clause is unreasonable in that it is disproportionate to the actual loss.
Rule: Damages = contract price - amount saved by non-shipment.
