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.
South Dakota Liquidated Damage Clause in Employment Contract Addressing Breach by Employer: A Liquidated Damage Clause is a provision included in employment contracts to address potential breaches committed by the employer in South Dakota. This clause ensures that the employer understands their obligations and potential consequences if they fail to fulfill their contractual commitments. In the event of a breach by the employer, the Liquidated Damage Clause defines the predetermined amount of compensation that the employer must pay to the employee. There are different types of Liquidated Damage Clauses that can be included in employment contracts in South Dakota, depending on the specific circumstances and requirements of the parties involved. Some of these variations may include: 1. Fixed Amount Clause: This type of Liquidated Damage Clause specifies a precise monetary value that the employer must pay the employee in case of breach. For example, the clause may state that the employer will be liable to pay a fixed amount of $10,000 to the employee. 2. Percentage of Salary Clause: In certain cases, the Liquidated Damage Clause may be specified as a percentage of the employee's salary. For instance, it may state that the employer will be liable to pay 30% of the employee's annual salary, should a breach occur. 3. Lost Wages Compensation Clause: This type of Liquidated Damage Clause focuses on compensating the employee for any financial loss resulting from the employer's breach. It ensures that the employee will be reimbursed for the wages they would have earned had the breach not occurred. 4. Non-Compete Clause Penalty: In cases where the breach involves a violation of a non-compete agreement, the Liquidated Damage Clause may contain provisions specifying the penalties and compensation involved. This could include financial penalties or additional compensation to be paid to the employee for their loss of opportunity due to the employer's breach. It is essential for both parties to carefully consider the terms and conditions of any Liquidated Damage Clause included in an employment contract. Properly drafted and well-defined clauses can provide clarity and protect the interests of both the employer and the employee in South Dakota.
