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THEATRE LEASES
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for liquidated damages under the contract, where the theatre was not constructed and the lessor has utterly failed to perform.52
lessee to be evicted on account of non-payment of rent. Plaintiff failed to use diligence in completing the building and defendant failed to pay rent. Action was for rent. Held that defendant might counterclaim for his damages by reason of plaintiff’s breach in failing to diligently complete the building; that defendant was entitled to be allowed in abatement of the rent, expenses incurred by him in advertising the performances announced for the week following the eviction but was not entitled to set off damages by reason of loss of the services of one of the artists who contracted a severe cold on account of the unfinished condition of the building as , the gains or profits, which the defendant might have made through the artist’s performances, were too speculative and conjectural.
62 Shubert v. Sondheim (1910), 138 A. D. (N. Y.) 800; 123 N. Y. Supp. 529; aff’d 203 N. Y. 636; 97 N. E. 1116. Where a written agreement to make a lease, rental to commence when a building
on the property was completed, provided that the lessee was to deposit money in escrow as security for the rent, and the proposed lessee, having the necessary funds failed to do so solely because the lessor refused to designate a depository when requested so to do, the lessee may maintain an action for liquidated damages provided for by the agreement, if the proposed lessor put it out of his power to fulfill the contract by leasing the lands to third parties.
It was held that the provision for liquidated damages was enforceable as the plaintiff “might have sustained very large damages which could not be proved with sufficient definiteness to warrant a recovery thereof, if he relied throughout the period of the construction of the building on obtaining a lease of this theatre, and then did not receive it.” It is not essential to the validity of a liquidated damage clause that it be reciprocal. Interest may be recovered on stipulated damages.
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