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.
The Oklahoma Liquidated Damage Clause in an Employment Contract addresses issues related to breach of contract by an employee and provides a legal framework for resolving such disputes. This clause specifies the amount of damages an employee agrees to pay the employer in the event of a breach, serving as a predetermined measure of compensation. Additionally, it eliminates the need for the employer to prove actual damages caused by the breach. In Oklahoma, there are generally two types of Liquidated Damage Clauses commonly used in employment contracts addressing breaches by employees: General Liquidated Damage Clauses and Restraint of Trade Clauses. 1. General Liquidated Damage Clause: This type of clause applies when an employee breaches any provision of the employment contract, such as duties, confidentiality, non-compete, or non-solicitation agreements. It allows the employer to quantify the damages and recover a predetermined amount, specified in the contract, without having to prove the actual harm suffered. 2. Restraint of Trade Clause: This clause specifically addresses breaches related to non-compete or non-solicitation agreements. It prohibits the employee from engaging in certain activities, such as working for a competitor or soliciting clients, for a specified period after leaving the employer. In case of a breach, the Restraint of Trade Clause allows the employer to claim liquidated damages as a pre-determined compensation for potential harm caused by the employee's actions. The purpose of these Liquidated Damage Clauses is to provide clarity and avoid lengthy and costly legal battles. They offer a predetermined remedy for both parties involved in the employment contract, protecting the legitimate interests of the employer and deterring employees from breaching their contractual obligations. It is important to note that, while Liquidated Damage Clauses are common in employment contracts, they must be reasonable and reflect the actual potential harm caused by the breach. If a clause is deemed excessive by the court, it may be considered unenforceable and treated as a penalty instead, which could result in a loss for the employer. Overall, the Oklahoma Liquidated Damage Clause in an Employment Contract serves to safeguard the employer's interests, provide a fair compensation mechanism, and discourage employees from violating their contractual obligations.
