A liquidated damages provision "will not be enforced if it is against public policy to do so
and public policy is firmly set against the imposition of penalties or forfeitures for which there is
no statutory authority." (Truck Rent-A-Ctr. v Puritan Farms 2d, 41 NY2d , supra
, at 424). "Generally whenever the damages flowing from a breach of a contract can be
easily established or where the damages fixed are plainly disproportionate to the injury the
stipulated sum will be treated as a penalty." (Seidlitz v Auerbach, 230 NY 167,
173-174.) The purpose of such a clause is not to provide just compensation but, rather to secure
performance "by the compulsion of the very disproportion." (Truck Rent-A-Ctr. v Puritan
Farms 2d, supra , at 424.) The promisor, fearing the punitive financial havoc that would
befall him, would continue to perform, or the [*7]promisee, in the
event he did not, would realize a reward far beyond his actual loss. In either event, an injustice
would be done. Thus, the rule has evolved that a liquidated damages clause will be enforced if
the sum stated is reasonably proportionate to the loss anticipated and the amount of actual loss
would be difficult if not impossible to calculate. (Supra, at 425.) Whether a contractual
provision is enforceable presents a question of law for the court. (Mosler Safe Co. v Maiden
Lane Safe Deposit Co., 199 NY, supra , at 485.) Applying the foregoing principles
to the facts at hand, we agree with the IAS Court's determination that the amount stipulated to as
liquidated damages does not bear a reasonable relation to the actual amount of probable damage
that would befall defendant in the event of plaintiff's default before taking possession and, thus,
that it constitutes a penalty.