Stefanie Holland‘s article “When Are Liquidated Damages Provisions Enforceable in Canada?” has been published in the Spring 2020 edition of the ABA’s The Franchise Lawyer.
Writes Stefanie: “Canadian courts have scarcely dealt with the enforcement of liquidated damages clauses in the franchise context. These provisions are those which require a breaching party to pay a pre-determined amount to the other party. For that reason, when analyzing liquidated damages clauses in franchise agreements, Canadian courts have turned to basic principles of contract law and other industries, including the leasing industry, where enforceable accelerated payment clauses seek to put the injured party in the position it would have been in had the other party performed its obligations under the contract.”
She also notes that “for franchisors, liquidated damages provisions can be critical components in their franchise agreement, serving as significant tools when faced with the prospect of litigation.”