Cases: Clear, reasonable LDC bars parol evidence

A “clear and ambiguous” liquidated damages clause that is conceded to be reasonable will be enforced in its plain language, according to the California Court of Appeals in an unpublished opinion, and oral testimony as to some consistent oral understanding will not be admitted.

The real estate contract at issue required the buyers to pay certain amounts for each day the deal was in escrow, but it also required an up-front payment of $700,000.  The contract said that this amount would be seller’s “sole and exclusive remedy in damages.”  When the deal went sour, the sellers sued, arguing that the liquidated damages were in addition to the daily amounts that were supposed to have been paid and proffering evidence of such an understanding.

No dice, said the court, holding that the language was clear and unambiguous, and no party argued that it was unreasonable.  Oral testimony as to some other agreement was therefore barred, and the court affirmed summary judgment for the defendants.

Lawrence v. Verner, No. C046921, 2005 Cal. App. Unpub. LEXIS 1757 (3d Dist. March 1, 2005).