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.
New Hampshire Liquidated Damage Clause in Employment Contract Addressing Breach by Employee In New Hampshire, a liquidated damage clause is a common provision included in employment contracts to address the potential breach of contract by an employee. This clause specifies a predetermined amount of damages that the employee will be required to pay to the employer in the event of a breach. The purpose of a liquidated damage clause is to provide a reasonable estimation of the potential harm or loss the employer may suffer due to the employee's breach. By including this provision in the employment contract, both parties can agree on a specific monetary amount as compensation, eliminating the need for costly and time-consuming litigation proceedings. Here are some types of liquidated damage clauses commonly found in New Hampshire employment contracts addressing breach by employees: 1. Non-Compete Clause Liquidated Damages: This type of clause is often used when the employee is subject to a non-compete agreement. It specifies the amount of damages the employee will be liable to pay if they engage in activities that compete with the employer's business during or after their employment. 2. Confidentiality Clause Liquidated Damages: This clause addresses breaches in maintaining the confidentiality of the employer's sensitive information. It outlines the amount of damages the employee will be responsible for paying if they disclose confidential information to unauthorized parties. 3. Breach of Contract Clause Liquidated Damages: This type of clause is more general and covers any breach of the employment contract by the employee. It can include various violations such as failure to complete agreed-upon work, violation of workplace policies, or unauthorized use of company resources. The specific amount of damages will depend on the nature and severity of the breach. It's important to note that while liquidated damage clauses are enforceable in New Hampshire, courts will scrutinize them to ensure they are reasonable and not excessive. If a court deems the liquidated damages provision to be a penalty rather than a reasonable estimate of damages, it may be considered unenforceable. Employers in New Hampshire should consult with legal professionals to ensure their liquidated damage clauses are properly drafted and comply with the state's laws and regulations. Employees, on the other hand, should carefully review their contract before signing, seeking legal advice if necessary, to fully understand the implications of the liquidated damages provision. In conclusion, a New Hampshire liquidated damage clause in an employment contract addressing breaches by employees provides clarity and avoids potential legal disputes by specifying the predetermined amount of damages an employee must pay in case of a breach. Employers must ensure these clauses are reasonable and comply with the state's laws, while employees should seek advice to fully comprehend their contractual obligations.
