DAVE GUSTAFSON & CO. V. STATE 156 N.W.2d 185 (1968) CASE BRIEF

DAVE GUSTAFSON & CO. V. STATE
156 N.W.2d 185 (1968)
NATURE OF THE CASE: Gustafson (P) appealed a decision which ruled that a provision in a state highway construction contract with State (D) was a liquidated damages clause and not an illegal penalty.
FACTS: P entered into a contract with D construct and surface a new public highway. P agreed to do the work for $530,724.14. P failed to complete the new highway on the date fixed and was late by 67 working days. D withheld $14,070.00 as liquidated damages from the amount due P computed according to the contract scale of daily damage for delay in construction. The per diem daily damage was $210. The contract deemed time an essential element of the contract and it was stipulated that delays would cost D monies to include engineering, inspection, and supervision. P sued D for withholding the monies. The trial court agreed with D and P appealed.

ISSUE:


RULE OF LAW:


HOLDING AND DECISION:


LEGAL ANALYSIS:





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