The article entitled Soaked by White-Collar Crime is the case I am going to choose for this homework assignment. This article talks about the case of Phelan v. Adelphia. To better understand the case, I will break down the article case into three parts: Case Facts, Case Issue, and Case Reasoning and Outcome. Phelan v. Adelphia Case Facts Mr. Kevin Phelan set out to buy a 72,000 sq. ft former headquarters property of Adelphia Communication at Coudersport, Pa. in 2008, at a price value of $3,400,000.00. Mr. Phelan paid $1,000,000.00 a nonrefundable deposit for the property and gave his real estate attorney another $2,000,000.00 to forward to the escrow agent. However, a client of the attorney asked the lawyer to borrow the $1,900,000.00 of Phelan’s money, and attempted to flee with his family. Later, the man was caught on the Miami’s tarmac holding a $1,300,000.00 cash hidden in his luggage. When Mr. Phelan defaulted, he forfeited the $1 Million deposit, and Adelphia found a new buyer for the property described-above that closed the deal a little higher than the Mr. Phelan’s price deal. Case Issue and other facts Mr. Kevin Phelan sued Adelphia to get his $1 Million deposit back at the U.S. District Court for the Middle District of Pennsylvania, claiming that the provision was invalid as an unenforceable penalty. Speaking of liquidated …show more content…
Since liquidated damages provisions can produce harsh results, the terms must be clear and meet certain requirements to be enforced. However, when the contract is executed, actual damages upon a default must be first uncertain or difficult to compute, and that the agreed-upon amount must be a reasonable approximation of the potential loss. The court found that the $1 Million amount met the basic requirements for a valid liquidated damages clause as Adelphia presented the evidence when Phelan signed the contract there were $600,000 annual property carrying costs, marketing costs, property resell uncertainty and price when it