Cortner v. Anderson, Clayton & Co.

The general rule is “that in the case of an agreement to do, or refrain from doing any particular act, secured by a penalty, the amount of the penalty is in no sense the measure of compensation; and the plaintiff must show the particular injury of which he complains, and have his damages assessed by a jury.” Jemison v. Governor, 47 Ala. 390, 405, citing Sedgwick on Damages, 396, 410.

While the parties to a contract may sometimes agree on a fixed sum as liquidated damages for the breach of a contract, they cannot by so declaring change the nature of a sum really intended as a penalty, nor is it…