How would the court determine whether the liquidated damages clause is valid?
Instructions: Case Analysis
Determine whether certain contract remedies exist in the following scenario:
Forrest Gump is a famous table tennis player. He enters into a contract with Alabama Sports Marketing to advertise the
latest ping pong game and to serve as the computer-generated imagery (CGI) model for the development of the video
game. Gump is perfect for this job as there are not many world famous ping pong players who have a following similar to
his. The game is set to start development on March 1 and will be completed on July 31, so the game can be released at
Thanksgiving—a major video game release period. Both parties have agreed and stipulated to the fact that the game
must be completed on time to maximize the profits.
Gump will make 20% of the net proceeds from the sales of the game. In addition, the contract has a liquidated damages
clause that indicates that if Gump does not participate in the marketing, does not serve as the CGI model, or breaches the
contract in any way, he will owe Alabama Sports Marketing $2 million.
Based on this fact pattern and the information presented in this unit, answer the following questions in a minimum of 250
1. One day, Gump gets into an argument with the developer. Gump refuses to perform any work until the problem is
solved. In this situation, can Alabama Sports Marketing seek specific performance of the contract? If yes, why? If no, why
2. How would the court determine whether the liquidated damages clause is valid? Is this clause valid? Explain your
Cite any direct quotes or paraphrased material from outside sources. Use APA format
Number of Pages: 2 Pages
Academic Level: College