Bates Advertising USA, Inc. v. 498 Seventh, LLC

OPINION OF THE COURT

Saxe, J.

This appeal provides us with the opportunity to consider the enforceability of a rent abatement clause as liquidated damages in the context of a commercial lease. We conclude that the trial court’s decision, invalidating the parties’ agreed-upon rent abatement clause as an unenforceable penalty, constituted a misapplication of the law regarding liquidated damages provisions, and accordingly, we reverse.

Plaintiff Bates Advertising USA, Inc. (Bates) is a large advertising and marketing firm that provides services to international corporate clients, including Estee…