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 employee would have to prove the actual damages.
New Hampshire Liquidated Damage Clause in Employment Contract Addressing Breach by the Employer: In the state of New Hampshire, an employment contract can include a liquidated damage clause that addresses the breach of contract by the employer. A liquidated damage clause is a provision agreed upon by both parties in the contract which specifies the amount of money that will be paid as compensation in the event of a breach. The purpose of a liquidated damage clause is to provide a pre-determined amount of damages that will be awarded to the non-breaching party, without the need for proving actual harm or loss suffered as a result of the breach. These clauses are typically inserted to safeguard the interests of the employee and ensure fair compensation in case of a contractual violation by the employer. There are two types of New Hampshire Liquidated Damage Clauses commonly used in employment contracts to address employer breaches: 1. General Liquidated Damage Clause: This type of clause provides a predetermined amount of damages that will be paid by the breaching employer to the employee if they fail to fulfill their obligations as stated in the employment contract. The specified amount of damages should be reasonable and proportionate to the anticipated loss resulting from the employer's breach. The intention is to compensate the employee for any harm caused by the breach without resorting to lengthy and costly legal proceedings. 2. Delayed Payment Liquidated Damage Clause: Under this type of clause, the employer agrees to pay an additional amount of money as liquidated damages if they fail to make timely payments to the employee as outlined in the contract. This clause ensures that employees are compensated for any financial hardships or inconveniences caused by late or missing payments. It is important to note that New Hampshire courts scrutinize liquidated damage clauses closely to ensure that they are not excessive, unreasonable, or punitive in nature. The stated damages should reasonably reflect the potential harm suffered by the employee due to the breach. If a court deems the liquidated damage clause to be unenforceable, it may invalidate the clause altogether or require parties to petition for actual damages in court instead. In conclusion, New Hampshire allows the inclusion of liquidated damage clauses in employment contracts to address breaches by the employer. These clauses can provide financial protection to employees and avoid lengthy legal disputes by establishing a predetermined compensation amount in case of breach. However, it is essential for both parties to carefully draft and review the clause to ensure its enforceability and fairness.
