Case Analysis on Forrest Gump

This case analysis explores why Alabama Sports Marketing cannot seek specific performance of the contract with Forrest Gump. The liquidated damage clause is invalid and the allocated liquidated damages fee is unreasonably large. The breach was foreseeable and the harm was anticipated.

Running head: CASE ANALYSIS ON FORREST GUMP 1
Case Analysis on Forrest Gump
Student’s Name
Institutional Affiliation

CASE ANALYSIS ON FORREST GUMP 2
Case Analysis on Forrest Gump
No, Alabama Sports Marketing cannot seek specific performance of the contract for two
primary reasons. First, Gump does not retract from his obligation since he agrees to perform after
the issue is resolved. Second, and most importantly, the liquidated damage clause is invalid.
Typically, the court would have to consider two factors while determining the enforceability of
Alabama Sports Marketing liquidated damage provision. First, the breach has to be
unanticipated, and inherently harmful to the company’s profitability or performance (Halson,
2018). Second, the allocated liquidated damages fee must be reasonably proportionate to the
actual or expected harm (Halson, 2018). The preceding sentiments affirm the general belief that
that the liquidated damage clause does not result in unmerited enrichment of the enforcer
(Alabama Sports Marketing).
When placed into perspective, Alabama Sports Marketing’s case fails to meet the first
condition of liquidated damage clauses: the harm must be inherently unanticipated and harmful
to the company. Gump’s retraction from his contractual obligation was expected inasmuch as it
might have caused financial harm. Such a bold declaration is grounded on the fact that Gump’s
action was inspired by a disagreement with one of the company’s representatives (the designer).
In this case, the breach was foreseeable. This argument applies a rather logical perspective on the
dictums of the liquidated damages clause: a disagreement during the implementation phase of
any project should be resolved as early as possible to prevent poor performance by both sides
(Harris, 2016). While the preceding sentiment offers an interesting position, it cannot hold
waters. The court must take the second factor into consideration as well.
As stated in the contract, Gump was to owe Alabama Sports Marketing 2 million dollars
in the event of a contractual breach. First, this amount does not reflect a candid pre-estimated

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loss. There is no procedural/methodological description of how the company arrived at the
values. When viewed from this point, the fee indicated by the enforcer meets the criteria for a
penalty under the Penal Code; hence, the clause is invalidated. Failure to reasonably define the
correlation between the amount and the loan categorizes the case as one involving a penalty.
Even so, the court would still find the provision unreasonable (Halson, 2018). At this juncture,
the reader is urged to reflect on the meaning of the term ‘unreasonable’ and the court’s duty as a
promoter of justice. Two million dollars is a colossal amount to be assumed by Gump
considering the fact that he wanted an issue resolved before proceeding with the implementation
process. It would appear as if the company lured Gump into a legal trap since the breach was
foreseeable and the damage provision is unreasonably large.
After a rigorous exploration of the liquidated damages clause case between Alabama
Sports Marketing and Forrest Gump, it is apparent that the clause and the provision were all
invalid. As far as the clause is concerned, the harm was anticipated. This factor further presents
the clause as a legal trap as the company imposes an unreasonable fee. Apart from being
significantly high, the figure does not correspond to any predetermined loss.

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References
Halson, R. (2018). Liquidated Damages and Penalty Clauses. Oxford, UK: Oxford University
Press.
Harris, T. L. (2016). Construction Disputes under US Law: A Primer for Non-US Lawyers.
Const. L. Int'l, 11, 26.