Cengage Advantage Books: Foundations of the Legal Environment of Business 3rd Edition by Marianne Jennings

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Fingerlakes Aquaculture LLC, an indoor fish hatchery, contracted with Progas Welding Supply to build and deliver a 13,000-gallon oxygen storage tank. The contract included a $400-per-day liquidated damages provision, denoted as a "fine." Progas delivered smaller tanks, but was never able to deliver the 13,000-gallon tank. Fingerlakes Aquaculture bought a tank from another supplier and filed suit seeking $292,000 ($400 per day for 210 days, as computed by the court) as liquidated damages. Progas says that because of the other tanks, Fingerlakes Aquaculture had no damages and the recovery amount was void as a penalty. Who is correct? Why? [ Fingerlakes Aquaculture LLC v. Progas Welding Supply , Inc., 825 N.Y.S.2d 559 (2006).]