An employment contract may state the amount of liquidated damages to be paid if the contract is breached. Upon a party's breach, the other party will recover this amount of damages whether actual damages are more or less than the liquidated amount.
If the agreed-upon liquidated damage amount is unreasonable, the Court will hold the liquidated damage clause to be void as a penalty. If the Court declares the clause to be void, the employee would have to prove the actual damages.
Idaho Liquidated Damage Clause in Employment Contract Addressing Breach by Employer When entering into an employment contract in the state of Idaho, it is essential to understand the presence and significance of a liquidated damage clause. This clause serves as a preventive measure to address potential breaches by the employer and establishes the amount of compensation that the employee may be entitled to in such instances. By including a liquidated damage clause, both parties can avoid lengthy legal battles and resolve disputes efficiently. Idaho recognizes the validity and enforceability of liquidated damage clauses, which are meant to establish a fair and reasonable estimation of the damages the employee may suffer due to the employer's breach of contractual obligations. These clauses serve as a form of security for employees, ensuring compensation in case of a breach, and discourage employers from non-compliance. Types of Idaho Liquidated Damage Clause in Employment Contract Addressing Breach by Employer: 1. Specific Monetary Compensation: This type of liquidated damage clause provides a predetermined amount of financial compensation that the employee will receive in case of a breach. The specific sum is agreed upon by both parties during the formation of the employment contract and typically reflects the potential harm the employee could face due to the employer's breach. 2. Calculation of Damages: Some liquidated damage clauses may specify a calculation method to determine the amount of compensation the employee should receive. This method could consider factors such as lost wages, potential job offers lost due to the breach, expenses incurred during the employment period, and any other relevant financial losses suffered. 3. Mitigation of Damages: In certain cases, an employment contract may include a liquidated damage clause that emphasizes the employee's responsibility to mitigate damages. This means that the employee must make reasonable efforts to minimize the harm caused by the employer's breach by seeking alternative employment or taking other appropriate actions. The amount of compensation may be adjusted based on the employee's success in mitigating the damages. Regardless of the specific type of liquidated damage clause included in an Idaho employment contract, it is crucial to carefully review the terms and seek legal advice if necessary. Both parties should fully understand their rights, obligations, and potential compensation in case of a breach. It is important to note that liquidated damage clauses must be reasonable and genuinely reflective of the anticipated harm rather than punitive in nature, as excessive or punitive clauses may be deemed unenforceable by the court. In conclusion, the inclusion of an Idaho liquidated damage clause in an employment contract addressing breaches by the employer provides valuable protection to employees. These clauses establish predetermined compensation amounts and encourage compliance, ensuring fair resolution in case of contractual breaches.
