You
Can you tell me what Oklahoma Statute 15 Section 214 says?
Copilot
Oklahoma Statute 15 Section 214 states that every contract, by which the amount of damages to be paid, or other compensation to be made, for a breach of an obligation, is determined in anticipation thereof, is to that extent void, except as expressly provided by Section 215 of this title1234. This means that any provision in a contract that attempts to predetermine the damages for a future breach of the contract is generally not enforceable, unless it is specifically allowed under Section 215. Please consult with a legal professional for a more detailed understanding.
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You
Can you provide an example of this ?
Copilot
Sure, let’s consider a hypothetical scenario:
Suppose you’re a software developer and you sign a contract with a company to deliver a software project within 6 months. The contract includes a clause that states if you fail to deliver the project on time, you will have to pay a predetermined amount of $50,000 as damages to the company.
Now, according to Oklahoma Statute 15 Section 214, this clause is generally unenforceable because it attempts to predetermine the damages for a potential future breach of the contract. The actual damages the company might incur due to the delay could be more or less than $50,000, and it’s not appropriate to decide this amount in advance.
However, there are exceptions under Section 215 where such a clause might be enforceable. It’s always recommended to consult with a legal professional for a more detailed understanding and application of these laws.
You
would it still apply to your hypothetical if the predetermined amount was a percentage of an unknown future value?
Copilot
Yes, the principle would still apply. If a contract includes a clause that determines in advance the damages for a potential future breach as a percentage of an unknown future value, it would generally be unenforceable under Oklahoma Statute 15 Section 214.
For example, if the contract states that you would have to pay 20% of the project’s future profits as damages if you fail to deliver on time, this clause would typically be unenforceable. The reason is the same: it attempts to predetermine the damages for a potential future breach of the contract.
However, as always, there could be exceptions under Section 215, and the specific circumstances of the case can also influence the outcome. Therefore, it’s recommended to consult with a legal professional for a more detailed understanding and application of these laws.