An employment contract may state the amount of liquidated damages to be paid if the contract is breached. Upon a party's breach, the other party will recover this amount of damages whether actual damages are more or less than the liquidated amount.
If the agreed-upon liquidated damage amount is unreasonable, the Court will hold the liquidated damage clause to be void as a penalty. If the Court declares the clause to be void, the employer would have to prove the actual damages.
In the state of Kansas, a liquidated damage clause is a provision commonly included in employment contracts to address potential breaches by an employee. This clause outlines the predetermined amount of damages that an employee must pay the employer in case of a breach of contract. In Kansas, there are two types of liquidated damage clauses commonly used to address breaches by employees: general liquidated damage clauses and specific liquidated damage clauses. 1. General Liquidated Damage Clause: A general liquidated damage clause is a broad provision that establishes a predetermined amount of damages applicable to any breach of the employment contract by the employee. It specifies the fixed sum or formula that the employee must pay the employer to compensate for the breach. The purpose of a general liquidated damage clause is to provide a reasonable estimate of the potential harm caused by the employee's breach, which is often difficult to calculate precisely. 2. Specific Liquidated Damage Clause: A specific liquidated damage clause is a more tailored provision that relates to a specific type of breach or violation committed by the employee. It outlines the predetermined damages applicable for a particular breach, such as disclosure of trade secrets, violation of non-compete agreements, or solicitation of clients/customers upon termination. This type of clause allows the employer to receive a predetermined amount of compensation for the specific harm caused by the employee's breach. In Kansas, the enforceability of liquidated damage clauses in employment contracts depends on several factors. Courts will generally uphold a liquidated damage clause if it is deemed reasonable and does not amount to an unenforceable penalty. To be considered reasonable, the predetermined amount should bear a reasonable relationship to the anticipated damages or harm caused by the breach. Also, the liquidated damage clause must be drafted clearly and unambiguously to avoid confusion or uncertainty in the event of a breach. Including a liquidated damage clause in an employment contract can provide both employers and employees with certainty and a predetermined resolution in case of breach or violation. However, it is advisable to seek legal counsel to ensure that the clause complies with Kansas laws and is fair to both parties involved.
