FlyerTalk Forums - View Single Post - Legality of the no-show cash fee policy for award bookings
Old Oct 27, 2013, 11:17 am
  #8  
saaru
 
Join Date: Jan 2010
Posts: 66
Originally Posted by Often1
The sole question is what OP contracted for. Many contracts have liquidated damages clauses and they are entirely legal in all 50 states (I am presuming that OP is in the USA and the property in question is in the USA).
This is from WikiPedia on liquidated damages:
"At common law, a liquidated damages clause will not be enforced if its purpose is to punish the wrongdoer/party in breach rather than to compensate the injured party (in which case it is referred to as a penal or penalty clause).[2] One reason for this is that the enforcement of the term would, in effect, require an equitable order of specific performance. However, courts sitting in equity will seek to achieve a fair result and will not enforce a term that will lead to the unjust enrichment of the enforcing party.[3]
In order for a liquidated damages clause to be upheld, two conditions must be met:
First, the amount of the damages identified must roughly approximate the damages likely to fall upon the party seeking the benefit of the term.[2]
Second, the damages must be sufficiently uncertain at the time the contract is made that such a clause will likely save both parties the future difficulty of estimating damages.
"

Based on that, I don't think the 1000 fee for a flight for no-show on a 100 dollar ticket or a 400 dollar charge on 100 dollar night fees should stand legal scrutiny? Valid? They are compensated by the 8K points - there are no additional losses to the hotel if I don't show up.
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