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DRAFT FOR ATTORNEY REVIEW — NOT FINAL

Fletcher Hill, Inc. v. Crosbie, 178 Vt. 77 (2005)

Citation
Fletcher Hill, Inc. v. Crosbie, 178 Vt. 77 (2005)
Parent Document
Fletcher Hill, Inc. v. Crosbie, 178 Vt. 77 (2005)
Jurisdiction
Vermont (state)
Effective Date
2005-01-14

Other Sections in This Document (57)

Full Text

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¶ 49. Although the default provision is not usurious, it is a form of liquidated damages that may involve an ilegal penalty. See Highgate Assocs. v. Merryfield, 157 Vt. 313, 316, 597 A.2d 1280, 1282 (1991) (outlining test for determining if contract provision is a reasonable liquidated damages clause or illegal penalty). I agree that the rate is suspect in the current low interest rate environment. We held in Highgate, however, that the trial court must examine whether the creditor is seeking an unenforceable penalty under three criteria, and our standard of review of its conclusion is limited. Id. at 315-16, 597 A.2d at 1281-82. The trial court has not conducted the necessary analysis, and our limited standard of review prevents us from doing so in the first instance here. I would remand for the analysis specified in Highgate.