S & H Deliveries v. Tristate Courier & Carriage

In S & H Deliveries v. Tristate Courier & Carriage, 1997 WL 817883, (Del. Super. May 21, 1997), the court set forth a two-part test to determine whether a provision for liquidated damages is valid. Such a provision is valid when: (1) the damages which the parties may reasonably anticipate are difficult to ascertain (at the time of contracting) because of their indefiniteness or uncertainty; and (2) the amount stipulated is either a reasonable estimate of the damages which would probably be caused by the breach or is reasonably proportionate to the damages which have actually been caused by the breach.