inconvenience or nonfeasibility of otherwise obtaining an adequate remedy
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Written by attorneys · grounded in primary & secondary sources — see below
A factor in the statutory test for enforceability of a liquidated damages clause in contracts for the sale of goods. Courts examine whether standard remedies would impose excessive practical obstacles such as high litigation costs, evidentiary barriers, or the inability to locate substitute performance.
Sources & Authorities
How it applies
Common Examples
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Custom Equipment Cancellation
Integrity Partners ordered specialized editing consoles configured for its film workflow and paid a forty percent advance labeled nonrefundable liquidated damages. After testing, Integrity Partners cancelled because its project ended. Gate Show had incurred substantial reconfiguration costs that would require expert testimony and prolonged discovery to quantify precisely. The clause satisfied the factor because pursuing an ordinary damages claim would have been inconvenient and nonfeasible given the unique nature of the goods.
Steel Beams Resale Dispute
Sterling Development contracted for custom steel beams and made progress payments that the agreement allowed West Foundation to retain as liquidated damages upon cancellation. West completed most beams but resold them at a profit after Sterling cancelled due to financing collapse. The retention clause failed the factor because the prompt resale showed that an adequate remedy through ordinary damages or restitution was feasible without retaining the full sum.
Put it into practice
Test Yourself
4
Practice Essays4
· 1 primary source
Select any source to read its text and confirm it supports the definition.
Uniform Acts
Study Supplements
Wahlcometroflex, Inc. v. Westar Energy, Inc.773 F.3d 223 (10th Cir. 2014)
Common questions
Frequently Asked
3
How does this factor interact with the other two statutory criteria for liquidated damages?+
The factor works together with anticipated or actual harm and difficulties of proof of loss. When all three point toward reasonableness, the clause is enforceable. When actual harm proves low and mitigation is easy, the factor weighs against enforceability even if anticipated harm seemed high.
Supporting sources
Does successful mitigation after breach automatically defeat this factor?+
Yes when the mitigation shows that an ordinary remedy was readily available. Courts then treat the clause as a penalty because the nonfeasibility justification disappears once actual events demonstrate feasible alternatives.
What facts typically satisfy the factor in sales of custom goods?+
Unique specifications, non-recurring engineering costs, uncertain resale markets, and the need for expert valuation of lost opportunity all support the factor. These circumstances make ordinary litigation costly and uncertain, justifying a pre-agreed amount.
ContractsRemedies · Liquidated damages and penalties, and limitation of remediesUBEFoundational