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If the amount exceeds the contract price, it smells of penalty because liquidated damages must be a reasonable approximation of foreseeable damages to the non -breaching party but they cannot simply be a penalty.You mistakenly believe the amount the athlete would have been paid caps the damages. That would only apply if the university expressly agreed to it in a liquidated damages provision. A reasonably awake university lawyer could craft a contract dealing with the various elements of the university's special damages were the athlete to leave recited the inherent difficulty is ascertaining those sums and establish a liquidated damages clause. Going back a ways in jolly old England there was this case called Hadley v. Baxendale 1854 .... I have to stop, the horrror of it all is coming back!
You resort to old common law - which Is more relevant than most would suspect. That shows how tough the field of study can be. University lawyers are good and won’t allow their client to use an easily beaten adhesion agreement signed by an 18 year old. It will be tough but I’m sure they can come up with something that will work. But it won’t be a simple penalty clause. That is why I raise the issue to point out that a simple boilerplate penalty clause is not good enough.
Hadley v Baxendal gives me headaches too.