This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If the amount fixed is to be paid in case of breach of a single covenant, it is, if fair and reasonable, to be treated prima facie as a covenant for liquidated damages.1 "Where payment is conditioned on one event, the payment is in the nature of liquidated damages."2 Though there are several covenants in a given contract, still if the amount to be paid in case of breach is apportioned to the different covenants, and is fair and reasonable for each, the stipulation is prima facie for liquidated damages.3 Thus a provision in a contract for transporting cattle that the steamer should sail on the day named "or pay expenses of keep of animals at rate of fifty cents per head per day in full," is a stipulation for liquidated damages.4 This principle finds application in agreements in building contracts to pay a certain sum per day for delay in completing the work.5
6 Bignall v. Gould, 119 U. S. 495.
7 Wallis v. Smith, 21 Ch. D. 243; Sun, etc., Co. v. Moore, 183 U. S. 642; May v. Crawford, 142 Mo. 390; 44 S. W. 260.
8 Wallis v. Smith, 21 Ch. D. 243; Cotheal v. Talmage, 9 N. Y. 551; 61 Am. Dec. 716.
9 Kemble v. Farren, 6 Bing. 141.
10 Pierce v. Jung, 10 Wis. 30.
11 Clement v. Cash, 21 N. Y. 253; quoted with approval in Sun, etc., Association v. Moore, 183 U. S. 642, 673.
1 Law v. Redditch Local Board (1892), 1 Q. B. 127; Sun, etc., Association v, More, 183 U. S. 642; Duffy v. Shockey, 11 Ind. 70; 71 Am. Dec. 348; Cushing v. Drew, 97 Mass. 445.
2 Strickland v. Williams (1899), 1 Q. B. 382, 384; quoted in Sun, etc., Association v. Moore, 183 U. S. 642, 667, with the warning that it must be understood that the event is "not the mere non-performance of an ordinary agreement for the payment of money."
3 Boys v. Ancell, 5 Bing. N. C. 390; Morris v. Wilson, 114 Fed. 74; 52 C. C. A. 22.