ÿWPCæ8 ëöë Wç¬#hTüU\f©™õÇõÉ®Œa4¥Í\Ÿûí~VS.Ç+åüc·áÝ2úž_¹·ðÚY"=ƒ…‹è«¯)µ¤wBq‡pL<û¥¿îéêé;š*+kùÕÊr´8*’`ëÍG:øŽ¯SŒÜlV¼ÒÓÁÅ"øÐp¥¹.ŒéM)uÒ­)ú“ƒw_‘Ûßš)¢fŒ[±-NzŽukéývÙå0aŠÑY™ Ûçq²|v™HÂŽèN¬3‹¦êprŸš’RhÝ…#–Ñmv¥u ÇZïÜ«Í\Š?'°hˆÓþV+¸_®÷²=\©Xh?@€ÇÉp¸¹T":².ª|ó_CpÍÁñcK¾‹ez‰å¢œÆƒÁ Î µŒ9ªæ^$ñ“ê:XbÅ€Ža'ªd¤8þXTBæ®Ö:ïȆÉ@›Ⱦ[ö›©, £ÅÚÚ9 =ÂJ?Ý5ý#Ë•1Ç…D±RÍž‡£ípfÕìh8·Vˆ&ÆÒŸ[3Ÿ6ØE{,² I|níC=ó›”ûI‡oÄnä—nÖ„÷‰hß%˜†ü§;]UÐ’á"=5Æõ¾n9ÞžNÜnìgŠSQ¯½ßíÛ¯áÚç‹­¯Ìi5Éi@Ü-1;SŠÄ‘KI­*# LU:W %‘ 0D—w@Û4/UH>UH†vÎ 0ˆD 0DÌ éÆùU:¿+ùÅ$ÒéÞ»f™3ÿ%2ÒW })$U:¦)và)V0U:^0I˜0Já2 B+5 AQH5Æ™5 0D_6 0D£6 0Dç6+7 D/-8U:\8 B–8 D3³8˜HP LaserJet 4SiHPPCL5MS,ü,,,,,ü0nLhÎ,c½¬AZ‹"Arial RegularX(ñÄ$¡¡Ò€°ÒÒX°Ò `-Gea-Ub-Dc-Ud-De-ef-Ug-h-Ó€r-©yË&Ôô3|xr-( € Z ‹0BernhardMod BT Roman(„‹ Z ‹0BernhardMod BT Roman lÝ ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú10Ú  ÚóóÝ  ÝÔ€ôý ôXXÔòòSeeóó€òòUnited€States€v.€Bethlehem€Steel€Co.óó,€205€U.S.€105,€119,€27€S.Ct.€450,€455,€51€L.Ed.€731Ð  Ð(1907);€òòGaines€v.€Jonesóó,€486€F.2d€39,€44„45€(8th€Cir.€1973);€òòUnited€States€v.€Le€Roy€Dyal€Co.óó,€186€F.2dРƾ Ð460,€462€(3rd€Cir.€1950);€òòWilliwaw€Lodge€v.€Lockeóó,€601€P.2d€236,€239€(Alaska€1979);€òòOmohndro€v.Ð „| ÐOttenheimeróó,€127€S.W.2d€642,€645€(Ark.€1939);€òòMcCarthy€v.€Tallyóó,€297€P.2d€981,€986„87€(Cal.€1956)€(inÐ B : Ðbanc);€òòRohauer€v.€Littleóó,€736€P.2d€403,€410€(Colo€1987);€òòHanson€Dev.€Co.€v.€East€Great€Plains€ShoppingÐ  ø ÐCtr.,€Inc.óó,€485€A.2d€1296,€1300€(Conn.€1985);€òòBrazen€v.€Bell€Atl.€Corp.óó,€695€A.2d€43,€48€(Del.€1997);Ð ¾ ¶ ÐòòLefemine€v.€Baronóó,€573€So.2d€326,€328€(Fla.€1991);€òòFickling€&€Walker€Co.€v.€Gibbens€Constr.€Co.óó,€376Ð | t ÐS.E.2d€655,€659„60€(Ga.€1989);€òòAnne€Arundel€County€v.€Norair€Engr.€Corp.óó,€341€A.2d€287,€294€(Md.Ð : 2 Ð1975);€òòFrank€v.€Jansenóó,€226€N.W.2d€739€(Minn.€1975);€òòBoard€of€Trustees€of€State€Inst.€of€HigherÐ ø ð ÐLearning€v.€Johnsonóó,€507€So.2d€887,€890€(Miss.€1987);€òòKnutton€v.€Cofieldóó,€160€S.E.2d€29,€35„36€(N.C.Ð ¶ ®  Ð1968);€òòFisher€v.€Schmelingóó,€520€N.W.2d€820,€822€(N.D.€1994);€òòSafari,€Inc.€v.€Verdoornóó,€446€N.W.2d€44,Ð tl  Ð46€(S.D.€1989);€òòWoodhaven€Apartments€v.€Washingtonóó,€942€P.2d€918,€921€(Utah€1997).€€€€(8(3Åå$¤¤Ý ƒñÄ!ÝÒ€°ÒÒX°ÒÝ  Ýà Ø àòòÚ  Ú0Ú  Úóó(#Ã$òòÚ  Ú0Ú  Úóó ßÝ ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú2Ú  ÚóóÝ  ÝÔ‡ôý ôXXÔAt€all€times€relevant€to€this€case,€Cleo€was€a€wholly€owned€subsidiary€of€Gibson€Greetings,€Inc.€ ¼Ý ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú4Ú  ÚóóÝ  ÝÔ€ôý ôXXÔThe€Court€of€Appeals€determined€that€the€appellant€was€employed€exclusively€as€the€ViceÐ  ÐPresident€of€Marketing€based€upon€the€opening€provision€of€the€employment€contract.€€The€court€heldÏthat€to€the€extent€the€subsequent€provisions€described€the€appellant€as€a€senior€executive€employee,€Ïthose€latter€provisions€were€unenforceable€as€being€in€conflict€with€the€preceding€ð ðVice€President€ofÏMarketingðð€provision.€€We€hold€to€the€contrary€that€the€provisions€can€be€read€congruently€without€havingÏto€redact€any€portion€of€the€contract.€€€€€€€€€€€€, øð AZ"Arial Regular !Ý ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú6Ú  ÚóóÝ  ÝÔ€ôý ôXXÔThose€losses€may€include€seniority€rights,€pension€recovery,€and€re„training€costs€or€otherÐ  Ðburdens€associated€with€obtaining€new€employment.€€ »Ý ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú1Ú  ÚóóÝ  ÝÔ‡ôÝ ôXXÔThe€trial€court€awarded€$90,125€in€back€salary€plus€$14,296.54€in€prejudgment€interest,€for€aÐ  Ðtotal€award€of€$104,421.54.€€The€record€is€unclear€whether€the€trial€court€treated€that€recovery€asÏseverance€pay€or€liquidated€damages.€Ô#†XjœX ôôÝ_#ÔÔ‡ôÝ ôXXjœÔ ÈÝ ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú7Ú  ÚóóÝ  ÝÔ‡ôý ôXXÔThe€appellant€argues,€in€part,€that€the€dollar€amount€established€in€Paragraph€9€cannot€beÐ  Ðconstrued€as€liquidated€damages€because€it€is€not€sufficiently€definite€to€constitute€a€ð ðsum€certain.ðð€€WeÏafford€no€merit€to€this€contention.€€Under€Tennessee€law,€a€contractual€provision€does€not€have€toÏspecify€a€set€dollar€amount€to€constitute€liquidated€damages.€€òòSeeóó€òòVanderbilt€Univ.€v.€Dinardoóó,€974€F.Ð B : ÐSupp.€638,€640€(M.€D.€Tenn.€1997)€(applying€Tennessee€law),€òòrevððdóó€òòin€partóó,€__€F.3d€__,€1999€WLÐ  ø Ð211871€(6th€Cir.€Apr.€14,€1999)€(upholding€the€liquidated€damages€provision,€but€remanding€for€trial€on€aÏcontract€addendum);€òòHarmon€v.€Eggersóó,€699€S.W.2d€159,€160€(Tenn.€Ct.€App.€1985),€òòperm.€app.€deniedóóÐ ~ v Ð(Tenn.€1985).€€€€ ÔÝ ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú13Ú  ÚóóÝ  ÝÔ€ôý ôXXÔThe€trial€court€awarded€summary€judgment€to€the€appellant€without€making€a€finding€on€actualÐ  Ðdamages€or€whether€the€recovery€constituted€severance€pay€or€liquidated€damages.€€Nevertheless,Ïbecause€we€hold€that€actual€damages€are€immaterial€in€this€case,€we€need€not€address€the€sufficiency€ofÏthe€record€in€that€respect.€ \Ý ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú8Ú  ÚóóÝ  ÝÔ€ôý ôXXÔThe€record€does€not€reflect€the€exact€date€found€by€the€trial€court€as€the€date€when€appellantÐ  Ðwas€terminated€from€his€employment.€€However,€based€upon€the€$90,125€amount,€it€is€apparent€that€theÏtrial€court€treated€December€15,€1994,€as€the€approximate€date€of€termination.€€That€date€coincides€withÏa€letter€sent€by€Cleo€to€the€appellant€on€December€22,€1994,€stating€that€the€appellant€had€been€paid€hisÏemployment€wages€through€December€15,€1994.€€€€€€€€ )Ý ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú3Ú  ÚóóÝ  ÝÔ€ôý ôXXÔMr.€Rohrbach€stated€in€his€deposition€that€Mr.€English€took€on€other€responsibilities€at€Cleo€inÐ  Ðaddition€to€those€previously€handled€by€the€appellant. Ý ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú5Ú  ÚóóÝ  ÝÔ‡ôý ôXXÔAs€previously€mentioned,€ð ðcauseðð€was€defined€in€the€contract€as€ð ðdishonesty,€gross€negligence,Ð  Ðor€willful€misconduct€in€the€performance€of€work€duties€or€a€willful€or€material€breach€of€[the€employment]ÏAgreement.ðð€€Cleo€also€had€a€right€to€terminate€the€contract€under€certain€conditions€of€illness€orÐ PH  Ðincapacity€as€defined€in€Paragraph€6€of€the€contract.€ ÈÝ ƒ Çå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú7Ú  ÚóóÝ  ÝÔ‡ô•äôXXÔThe€appellant€argues,€in€part,€that€the€dollar€amount€established€in€Paragraph€9€cannot€beÐ  Ðconstrued€as€liquidated€damages€because€it€is€not€sufficiently€definite€to€constitute€a€ð ðsum€certain.ðð€€WeÏafford€no€merit€to€this€contention.€€Under€Tennessee€law,€a€contractual€provision€does€not€have€toÏspecify€a€set€dollar€amount€to€constitute€liquidated€damages.€€òòSeeóó€òòVanderbilt€Univ.€v.€Dinardoóó,€974€F.Ð B : ÐSupp.€638,€640€(M.€D.€Tenn.€1997)€(applying€Tennessee€law),€òòrevððdóó€òòin€partóó,€__€F.3d€__,€1999€WLÐ  ø Ð211871€(6th€Cir.€Apr.€14,€1999)€(upholding€the€liquidated€damages€provision,€but€remanding€for€trial€on€aÏcontract€addendum);€òòHarmon€v.€Eggersóó,€699€S.W.2d€159,€160€(Tenn.€Ct.€App.€1985),€òòperm.€app.€deniedóóÐ ~ v Ð(Tenn.€1985).€€€€ sÝ ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú11Ú  ÚóóÝ  ÝòòÔ€ôý ôXXÔSeeóó€òòThanksgiving€Tower€Partners€v.€Anros€Thanksgiving€Partnersóó,€64€F.3d€227,€232€(5th€Cir.Ð  Ð1995)€(applying€Texas€law);€òòSouthpace€Properties,€Inc.€v.€Acquisition€Groupóó,€5€F.3d€500,€505€(11th€Cir.Рƾ Ð1993)€(applying€Alabama€law);€òòKelly€v.€Marxóó,€694€N.E.2d€869,€871„72€(Mass.€App.€Ct.€1998);€òòHawkins€v.Ð „| ÐFosteróó,€897€S.W.2d€80,€85€(Mo.€Ct.€App.€1995);€òòBrowning€Ferris€Indus.€of€Nebraska,€Inc.€v.€EatingÐ B : ÐEstablishment€90th€&€Fort,€Inc.óó,€575€N.W.2d€885,€888„89€(Neb.€Ct.€App.€1998);€òòShallow€Brook€Assoc.€v.Ð  ø ÐDubeóó,€599€A.2d€132,€137€(N.H.€1991);€òòBoyle€v.€Petrie€Stores€Corp.óó,€518€N.Y.S.2d€854,€861€(N.Y.€Sup.Ð ¾ ¶ ÐCt.€1985),€òòsupp.€decisionóó€(May€29,€1987);€òòLake€Ridge€Academy€v.€Carneyóó,€613€N.E.2d€183,€189€(OhioÐ | t Ð1993);€òòHighgate€Assoc.,€LTD.€v.€Merryfieldóó,€597€A.2d€1280,€1282€(Vt.€1991)€(reviewing€the€totality€of€theÐ < 4 Ðcircumstances);€òòWheeling€Clinic€v.€Van€Peltóó,€453€S.E.2d€603,€609€(W.€Va.€1994);€òòWassenaar€v.€Panosóó,Ð ú ò Ð331€N.W.2d€357,€361„62€(Wis.€1983)€(reviewing€the€totality€of€the€circumstances,€including€actualÏdamages).€€,c½¬AZ‹"Arial Regular lÝ ƒ Çå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú10Ú  ÚóóÝ  ÝÔ€ô•äôXXÔòòSeeóó€òòUnited€States€v.€Bethlehem€Steel€Co.óó,€205€U.S.€105,€119,€27€S.Ct.€450,€455,€51€L.Ed.€731Ð  Ð(1907);€òòGaines€v.€Jonesóó,€486€F.2d€39,€44„45€(8th€Cir.€1973);€òòUnited€States€v.€Le€Roy€Dyal€Co.óó,€186€F.2dРƾ Ð460,€462€(3rd€Cir.€1950);€òòWilliwaw€Lodge€v.€Lockeóó,€601€P.2d€236,€239€(Alaska€1979);€òòOmohndro€v.Ð „| ÐOttenheimeróó,€127€S.W.2d€642,€645€(Ark.€1939);€òòMcCarthy€v.€Tallyóó,€297€P.2d€981,€986„87€(Cal.€1956)€(inÐ B : Ðbanc);€òòRohauer€v.€Littleóó,€736€P.2d€403,€410€(Colo€1987);€òòHanson€Dev.€Co.€v.€East€Great€Plains€ShoppingÐ  ø ÐCtr.,€Inc.óó,€485€A.2d€1296,€1300€(Conn.€1985);€òòBrazen€v.€Bell€Atl.€Corp.óó,€695€A.2d€43,€48€(Del.€1997);Ð ¾ ¶ ÐòòLefemine€v.€Baronóó,€573€So.2d€326,€328€(Fla.€1991);€òòFickling€&€Walker€Co.€v.€Gibbens€Constr.€Co.óó,€376Ð | t ÐS.E.2d€655,€659„60€(Ga.€1989);€òòAnne€Arundel€County€v.€Norair€Engr.€Corp.óó,€341€A.2d€287,€294€(Md.Ð : 2 Ð1975);€òòFrank€v.€Jansenóó,€226€N.W.2d€739€(Minn.€1975);€òòBoard€of€Trustees€of€State€Inst.€of€HigherÐ ø ð ÐLearning€v.€Johnsonóó,€507€So.2d€887,€890€(Miss.€1987);€òòKnutton€v.€Cofieldóó,€160€S.E.2d€29,€35„36€(N.C.Ð ¶ ®  Ð1968);€òòFisher€v.€Schmelingóó,€520€N.W.2d€820,€822€(N.D.€1994);€òòSafari,€Inc.€v.€Verdoornóó,€446€N.W.2d€44,Ð tl  Ð46€(S.D.€1989);€òòWoodhaven€Apartments€v.€Washingtonóó,€942€P.2d€918,€921€(Utah€1997).€€€€,c½¬AZ‹"Arial Regular ?Ý ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú12Ú  ÚóóÝ  ÝÔ‡ôý ôXXÔÔ‡ôyÛô ôôýÔThis€prospective€approach€incorporates€the€cardinal€rule€of€contract€interpretation,€requiring€Ð  Ðcourts€to€ascertain€the€intentions€of€the€parties€based€upon€the€language€in€the€contract.€€òòSeeóó€òòBobÐ ’Š ÐPearsall€Motors,€Inc.óó,€521€S.W.2d€at€580;€òòNunnelly€v.€Warner€Iron€Co.óó,€94€Tenn.€282,€29€S.W.€124Ð ZR Ð(1895).€€Ô#†ôý ôôôyÛ#Ô€€ @Ý ƒ Åå$ÝÒ€°ÒÒX°Òà Ø àòòÚ  Ú9Ú  ÚóóÝ  ÝÔ‡ôý ôXXÔÔ‡ôyÛô ôôýÔAs€distinguished€from€liquidated€damages,€a€penalty€is€ð ða€sum€inserted€in€a€contract,€not€as€theÐ  Ðmeasure€of€compensation€for€its€breach,€but€rather€as€a€punishment€for€default,€or€by€way€of€security€forÏactual€damages€which€may€be€sustained€by€reason€of€nonperformance,€and€it€involves€the€idea€ofÏpunishment.ðð€€22€Am.€Jur.€2d€òòDamagesóó€ðð€684€(1988).€Ô#†ôý ôôôyÛ~#Ô d!"#$&Cþÿ<< CÿÿƒLevel 1Level 2Level 3Level 4Level 5(3¯$¢¢Ý ƒ!ÝÝ  Ý(3¯$££Ý ƒ!ÝÝ  Ý($$””ò òÚ  Ú1Ú  Úó ó øÝ ƒ"¯"ÝÝ  ÝÔ€'XjœXXXÔÔ€'ÿ? X'XjœÔÓ  Óò òÔ Ad ÔFILEDÔ€'XjœX 'ÿ?ÔÐ  ÐÌJune€28,€1999ÌÌCecil€Crowson,€Jr.ÌAppellate€Court€ClerkÔdAhÔó ó(('÷ÿ dxd,c½¬AZ‹"Arial RegularüÿP Pd'ÿÿdxdÝ ƒñÄ!ÝÒ€°ÒÒX°ÒÝ  Ýñe-ñ›ñe-ññe-ññ`-ñ›ñ`-ññe-ññ`-ñ›ñ`-ñѰÑÑ€°ÑÑTR[¤ AØ'ÿ Legal3Ø' AØ'ÿ Legalÿ3Ø'TÑÑ  ÑÑ7€jœXXdædÈ7ÑÑ  ÑÓ=€jœXÐXdÐd=Óœñr-ññr-ññr-ññh-ñœñh-ñßr€ %)<,(j 8` `€€@E  ` 8ttxPXð  rßñr-ññh-ññh-ñ›Ìñr-ñœßt€ %)>.*jx-µ` `€€@EL£` 8ttxP„î( µ tß›ñr-ñà@‰‰ €àIN€THE€SUPREME€COURT€OF€TENNESSEEˆÌà@  +€àAT€JACKSONˆÌÌñ`-ñœñ`-ñÌñ`-ñ›ñ`-ñÌÌÌANTHONY€P.€GUILIANOà à àà 8 àà  à)Ð 80 Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)à è àò òFOR€PUBLICATIONó óÐ   Ðà Ø àPlaintiff/Appellantà à àà 8 àà  à)Ð    Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)à è àñ`-ñœñ`-ñò òòòFILED:€€June€28,€1999€óóó ó€ñ`-ñ›ñ`-ñÐ ðè  Ðv.à Ø àà 0 àà ˆ àà à àà 8 àà  à)Ð ÜÔ  Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)à è àSHELBY€CIRCUITРº  ÐCLEO,€INC.à 0 àà ˆ àà à àà 8 àà  à)Ð ¨   Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)à è àHon.€James€E.€SwearengenÐ Ž†  Ðà Ø àDefendant/Appelleeà 8 àà  à)Ð tl Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)à è à02S01„9801„CV„00002Ð ZR Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)Ìà Ø àà 0 àà ˆ àà à àà 8 àà  àÌÌÌÌòòFor€the€Petitioneróó:à ˆ àà à àà 8 àà  àà è àòòFor€the€Respondentóó:Ð ¾¶ ÐÌFrank€L.€Watsonà ˆ àà à àà 8 àà  àà è àJames€H.€Stock,€Jr.,à H! àà  # àÐ Š‚ ÐWaring€Cox,€P.L.C.à ˆ àà à àà 8 àà  àà è àChristopher€E.€Mooreà H! àà  # àÐ ph ÐMemphis,€Tennesseeà à àà 8 àà  àà è àWeintraub,€Stock,€Bennett,à  # àÐ VN Ðà Ø àà 0 àà ˆ àà à àà 8 àà  àà è àGrisham€&€Underwood,€P.C.Ìà Ø àà 0 àà ˆ àà à àà 8 àà  àà è àMemphis,€TennesseeÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÌÔ‡RìlRXXÔÔ‡RŽñRRRìlÔà@¸¸-€àò òÔ#†Xå­XRRŽñË #ÔÔ‡„,$„XXå­ÔÔ#†„ù „„„,$ê #ÔÔ‡ „,$„ „„ù ÔOPINIONó óÔ#†„ù „„ „,$ƒ #ÔÔ‡„,$„ „„ù ÔÔ#†Xå­X„„,$A #ԈР42,+0 ÐÔ#†XjœXXXå­Ï #ÔÌÌÌÌCourt€of€Appeals€Reversed;à 8 àà  àà è àà @ àà ˜ àà ð à€€€€€Barker,€J.à  # àÐ :7205 ÐTrial€Court€Affirmed€à à àà 8 àà  àà è àà @ à€€€€€€€€€€€€€€€€€€€€€€€€€€€ò òÐ  816 Ðó óÐ 9þ17½ Їà@ÙÙ-€àò òOPINIONó óˆÐ  ÐÓÓÌà Ø àWe€granted€this€appeal€to€address€the€recovery€of€liquidated€damages€where€aÏplaintiff/employee€alleges€that€he€has€been€constructively€terminated€from€hisÏemployment.€€The€trial€court€in€this€case€granted€summary€judgment€in€favor€of€theÏappellant,€Anthony€P.€Guiliano,€based€upon€a€finding€that€he€had€been€constructivelyÏterminated€from€his€employment€and€that€he€was€entitled€to€recover€the€remainder€ofÏhis€salary€under€Paragraph€9€of€his€employment€contract.׃×Ý ƒ #ÃÝòòÚ  Ú1Ú  ÚóóÝ  Ý×  ×€€The€Court€of€AppealsÐ ¼´  Ðagreed€that€the€appellant€had€been€constructively€terminated€from€his€employment,Ïbut€concluded€that€he€was€not€entitled€to€any€recovery.€€The€intermediate€court€heldÏthat€Paragraph€9€of€the€contract€was€a€liquidated€damages€provision€that€imposed€aÏpenalty€on€the€appellee,€Cleo,€Inc.,€(Cleo).ÌÌà Ø àBoth€parties€request€this€Court€to€determine€whether€Paragraph€9€of€theÏemployment€contract€contemplates€the€payment€of€severance€pay€or€liquidatedÏdamages.€€For€the€reasons€that€follow,€we€conclude€that€the€sums€payable€pursuant€toÏParagraph€9€are€liquidated€damages€in€the€event€that€Cleo€terminated€appellantððsÏemployment€without€cause,€effectively€breaching€the€contract.€€ÌÌà Ø àWe€affirm€the€trial€courtððs€grant€of€summary€judgment€for€the€appellant€on€theÏissue€of€constructive€termination.€€In€addition,€because€we€find€that€the€liquidatedÏdamages€provision€was€a€reasonable€estimation€of€employee€damages€at€the€time€theÏparties€entered€into€the€contract,€we€conclude€that€the€appellant€is€entitled€to€recoverÏthe€full€amount€stipulated€in€that€provision.€€The€judgment€of€the€Court€of€Appeals€isÏreversed,€and€the€trial€courtððs€grant€of€summary€judgment€for€the€appellant€is€affirmed.€ÏÐ 3 ,1 Їà Ø àà@§§+€àò òBACKGROUNDó óˆÐ  Ðñ`-ñœñ`-ñÌñ`-ñ›ñ`-ñà Ø àThe€essential€facts€in€this€case€are€undisputed.€€The€appellant€had€beenÏemployed€as€a€director€of€marketing€at€Cleo׃ ×Ý ƒ #ÃÝòòÚ  Ú2Ú  ÚóóÝ  Ý×  ×€for€approximately€one€year€when€heÐ x p Ðentered€into€a€written€employment€contract€with€the€company.€€The€contract€was€in€theÏform€of€a€letter€sent€by€Michael€Pietrangelo€who€was€then€the€President€and€ChiefÏExecutive€Officer€of€Cleo.€The€letter€agreement€stated€in€pertinent€part:ÌÓ™ ÓÌà8 Ø àCleo€Inc.€and€I€are€very€pleased€that€you€have€agreed€to€serve€as€ViceÏPresident,€Marketing€of€Cleo€Inc.€(the€ð ðCompanyðð),€a€wholly€ownedÏsubsidiary€of€Gibson€Greetings,€Inc.€€As€Vice€President,€Marketing€youÏwill€report€to€the€President,€and€perform€those€functions€currentlyÏassigned,€which€functions€and€responsibilities€can€be€changed€at€theÏdiscretion€of€the€Company.€€The€following€terms€and€conditions€willÏgovern€your€service€to€the€Company:€€€Ð Ø (#Ø (# Ѐ€Ìà8 Ø à1.à 0 àYou€will€serve€the€Company€on€a€full„time€basis€as€a€seniorÐ ¾¶ Ðexecutive€employee,€and€the€company€will€employ€you€as€such,€for€aÏperiod€of€three€years€commencing€November€1,€1992€and€endingÏOctober€31,€1995€unless€you€are€terminated€at€an€earlier€date€pursuantÏto€Paragraphs€6,€7,€or€9€of€this€Agreement.€€Your€annual€salary€will€beÏ$103,€000,€which€amount€will€be€reviewed€every€fifteen€months€andÏwhich€may€be€adjusted€from€time€to€time€by€the€Company€throughout€theÏterm€of€this€Agreement€in€accordance€with€the€Companyððs€salaryÏadministration€program.€€No€later€than€six€months€prior€to€expiration€ofÏthe€original€term,€or€any€renewal€term,€of€this€Agreement,€it€will€beÏreviewed€by€the€Company€for€the€purpose€of€deciding€whether€or€not€itÏwill€be€renewed€upon€its€expiration.€€You€will€be€notified€of€a€decision€notÏto€renew.€€If€you€are€not€notified€of€a€decision€not€to€renew,€theÏAgreement€will€automatically€renew€from€year€to€year.Ð Ø (#Ø (# ÐÌà Ø àñ`-ñœñ`-ñà 0 à.€.€.€.ñ`-ñ›ñ`-ñÌÌà8 Ø à6.à 0 àIn€the€event€you€are€unable€to€perform€your€duties€hereunder€dueÐ +ü#( Ðto€illness€or€other€incapacity,€which€incapacity€continues€for€more€thanÏsix€consecutive€or€nonconsecutive€months€in€any€twelve„month€period,Ïthe€Company€shall€have€the€right,€on€not€less€than€30€days€written€noticeÏto€you,€to€terminate€this€Agreement.€ñ`-ñœñ`-ñ.€.€.€€ñ`-ñ›ñ`-ñÐ Ø (#Ø (# ÐÌà8 Ø à7.à 0 àIn€the€event€you€voluntarily€terminate€your€employment€during€theÐ h0`). Ðterm€of€this€Agreement,€or€if€the€Company€terminates€this€AgreementÏand€your€employment€for€cause,€your€right€to€all€compensationÏhereunder€shall€cease€as€of€the€date€of€termination.€€As€used€in€thisÏAgreement,€ð ðcauseðð€shall€mean€dishonesty,€gross€negligence,€or€willfulÏmisconduct€in€the€performance€of€your€duties€or€a€willful€or€materialÐ æ4Þ-3 Ðbreach€of€this€Agreement.€€Termination€of€employment€shall€terminateÏthis€Agreement€with€the€exception€of€the€provisions€of€Paragraphs€8,€9,Ï10,€and€12.€Ð Ø (#Ø (# ÐÌà8 Ø à8.à 0 àAlso€in€the€event€you€voluntarily€terminate€your€employmentÐ   ˜ Ðhereunder,€or€in€the€event€the€Company€terminates€this€Agreement€andÏyour€employment€for€cause,€you€agree€that€for€a€period€of€two€yearsÏafter€such€termination,€you€will€not€compete,€directly€or€indirectly,€withÏthe€Company€or€with€any€division,€subsidiary,€or€affiliate€of€the€CompanyÏor€participate€as€a€director,€officer,€employee,€consultant,€advisor,Ïpartner,€or€joint€venturer€in€any€business€engaged€in€the€ñ`-ñœñ`-ñmanufactureñ`-ñ›ñ`-ñ€orÏsale€of€greeting€cards,€gift€wrap,€or€other€products€produced€by€theÏCompany,€or€any€division,€subsidiary,€or€affiliate€of€the€Company,€withoutÏthe€Companyððs€prior€written€consent.Ð Ø (#Ø (# ÐÌà8 Ø à9.à 0 àIn€the€event€the€Company€terminates€this€Agreement€and€yourÐ ‚z  Ðemployment€without€cause,€you€shall€continue€to€be€paid€your€thenÏcurrent€salary€from€the€date€of€termination€through€October€31,€1995.Ð Ø (#Ø (# Ðñ`-ñœñ`-ñÌÓ.%ÓÌñ`-ñ›ñ`-ñà Ø àIn€1994,€Cleo€experienced€several€personnel€changes€in€its€upperÏmanagement.€€Jack€Rohrbach€replaced€Mr.€Pietrangelo€as€the€companyððs€PresidentÏand€Chief€Executive€Officer€and€Marc€English€was€later€hired€as€the€Senior€ViceÏPresident€of€Marketing€and€ð ðCreative.ðð€€Mr.€Rohrbach€stated€in€his€deposition€that€heÏbegan€observing€the€appellantððs€work€performance€when€he€took€over€as€the€companyÏpresident.€€Based€upon€his€observations,€he€opined€that€the€appellant€had€a€poor€workÏrelationship€with€his€peers€and€subordinates€and€ñ`-ñœñ`-ñthat€theñ`-ñ›ñ`-ñ€appellant€was€not€leading€theÏmarketing€department€in€a€direction€best€suited€for€the€company.€€Mr.€Rohrbach€statedÏthat€he€hired€Mr.€English€as€the€new€marketing€Vice€President€because€Mr.€EnglishÏhad€more€industry€experience€and€a€successful€track€record.€€ÌÌà Ø àIn€the€Fall€of€1994,€the€appellant€received€a€series€of€letters€from€Mr.€RohrbachÏand€Mr.€English€that€diminished€his€employment€responsibilities€at€Cleo.€€The€firstÏñ`-ñœñ`-ñletter,ñ`-ñ›ñ`-ñ€dated€September€13,€1994,€informed€the€appellant€that€his€employment€contractÏwould€not€be€renewed€after€its€expiration€on€October€31,€1995.€€Approximately€twoÏweeks€later,€the€appellant€received€a€second€letter€signed€by€Mr.€Rohrbach€that€statedÏin€pertinent€part:Ð ¦6ž/5 ЇÓ«%Óà8 Ø àEffective€today€and€until€October€31,€1995,€you€are€relieved€of€yourÏduties€as€Vice€President€Marketing€of€Cleo€Inc.€and€shall€be€responsibleÏfor€such€assignments€as€may€be€given€to€you€by€the€President€of€theÏCompany.€€During€this€period,€you€will€remain€an€employee€of€theÏCompany€and€the€Company€will€continue€to€honor€its€obligations€to€youÏunder€your€employment€agreement.Ð Ø (#Ø (# ÐÌà8 Ø àHowever,€you€are€specifically€advised€that€you€shall€have€no€authority€toÏbind,€represent€or€speak€for€the€Company€in€any€manner€except€as€mayÏbe€stated€in€writing€by€the€President€of€the€Company.€Ð Ø (#Ø (# Ðà8 Ø àÐ Ø (#Ø (# Ðà8 Ø àFor€all€future€assignments,€you€shall€be€based€out€of€your€home.€€Ð Ø (#Ø (# ÐÌà8 Ø àShould€you€accept€other€employment€prior€to€October€31,€1995,€allÏbenefits€under€your€employment€agreement€shall€immediately€cease.€ÏAlso,€please€take€note€of€the€confidentiality€and€non„compete€provisionsÏof€your€employment€agreement.Ð Ø (#Ø (# Ðà8 Ø àÐ Ø (#Ø (# Ðà8 Ø àWe€will€be€in€touch€when€an€appropriate€assignment€becomes€available.€ÏIn€the€meantime,€should€you€have€any€questions€or€comments,€pleaseÏdo€not€hesitate€to€contact€me.€Ð Ø (#Ø (# Ðñ`-ñœñ`-ñÌñ`-ñ›ñ`-ñÌÌÓ¤"Óà Ø àIn€November,€1994,€the€appellant€received€two€additional€letters€from€CleoÏinforming€him€that€he€was€no€longer€authorized€to€use€company€credit€cards€and€thatÏhe€was€to€return€the€company€cards€in€his€possession.€€In€addition,€he€was€informedÏthat€Cleo€would€no€longer€answer€a€telephone€line€for€him.€€All€telephone€calls€for€theÏappellant€were€to€be€screened€for€personal€or€business,€with€the€personal€calls€beingÏdirected€to€appellantððs€home.€€Cleo€allowed€the€appellant€to€retrieve€the€personalÏtelephone€numbers€from€his€office€rolodex,€but€all€business€numbers€were€keptÏexclusively€by€Cleo€as€company€property.ÌÌà Ø àFollowing€the€letter€of€September€28,€1994,€the€appellant€stayed€at€his€homeÏfor€three€months€without€receiving€a€work€assignment€from€Cleo.€€During€that€time,€Mr.ÏEnglish€moved€into€appellantððs€old€office€and€assumed€the€marketing€responsibilitiesÏpreviously€handled€by€the€appellant.׃×Ý ƒ #ÃÝòòÚ  Ú3Ú  ÚóóÝ  Ý×  ×€€On€December€12,€1994,€the€appellant€acceptedÐ (2 +0 Ðnew€employment€at€Wangððs€International,€Inc.€with€a€starting€salary€of€$110,000€perÐ ô3ì,2 Ðyear.€€Cleo€kept€the€appellant€on€the€company€payroll€at€$103,000€per€year€until€heÏbegan€his€new€employment.Ì€€€€€€€€Ìà Ø àThe€appellant€filed€suit€against€Cleo€on€January€26,€1995,€claiming€that€theÏcompany€had€constructively€terminated€his€employment€without€cause€and€that€heÏwas€entitled€to€the€remainder€of€his€salary€under€Paragraph€9€of€the€employmentÏcontract.€€Cleo€responded€that€its€treatment€of€the€appellant€did€not€constitute€aÏtermination€of€his€employment,€but€that€even€if€it€did,€the€provision€in€Paragraph€9€wasÏan€unenforceable€penalty.€€Both€parties€filed€motions€for€summary€judgment.€€After€aÏhearing,€the€trial€court€granted€summary€judgment€to€the€appellant,€awarding€himÏ$90,125€in€salary€remaining€under€his€employment€contract€plus€$14,296.54€inÏprejudgment€interest.€€ÌÌà Ø àOn€appeal€by€Cleo,€the€Court€of€Appeals€affirmed€the€trial€courtððs€conclusionÏthat€the€appellant€was€constructively€terminated€from€his€employment,€but€reversedÏthe€award€of€damages.€€The€intermediate€court€interpreted€Paragraph€9€of€theÏemployment€contract€as€a€provision€for€liquidated€damages€because€it€called€ð ðforÏpayment€of€a€sum€certain€in€the€event€of€a€certain€occasion.ðð€€Finding€no€evidence€inÏthe€record€of€actual€damages€suffered€by€appellant,€the€court€concluded€thatÏenforcement€of€the€liquidated€damages€provision€would€impose€an€unlawful€penaltyÏagainst€Cleo.€€€€€€€ÌÌà Ø àThe€appellant€requests€this€Court€to€reverse€the€Court€of€Appeals€and€toÏreinstate€the€judgment€of€the€trial€court.€€His€contention€in€this€appeal€is€that€CleoÏconstructively€terminated€his€employment€when€it€removed€his€title€of€Vice€PresidentÏof€Marketing€and€sent€him€home€for€three€months€without€any€further€assignments.€ÏHowever,€in€contrast€to€his€argument€in€the€courts€below,€the€appellant€now€claimsÏthat€Cleo€had€a€right€to€terminate€his€employment,€as€it€did€in€this€case,€withoutÐ Œ7„06 Ðbreaching€the€contract.€€He€contends€that,€regardless€of€the€issue€of€breach,€he€isÏentitled€to€recover€severance€pay€under€Paragraph€9€of€the€employment€contract.€€€ÌÌà@'€àò òSTANDARD€OF€REVIEWó óˆÐ l d ÐÌà Ø àThe€standards€governing€an€appellate€courtððs€review€of€a€motion€for€summaryÏjudgment€are€well€settled.€€Summary€judgment€is€appropriate€only€where€the€movingÏparty€demonstrates€that€there€are€no€genuine€issues€of€material€fact€and€that€he€orÏshe€is€entitled€to€judgment€as€a€matter€of€law.€€òòByrd€v.€Hallóó,€847€S.W.2d€208,€210Ð tl Ð(Tenn.€1993);€Tenn.€R.€Civ.€P.€56.03.€€We€review€the€summary€judgment€motion€as€aÏquestion€of€law€in€which€our€inquiry€is€òòde€novoóó€without€a€presumption€of€correctness.€Ð   ÐòòFinister€v.€Humboldt€ñ`-ñœñ`-ñGen.ñ`-ñ›ñ`-ñ€Hosp.,€Inc.óó,€970€S.W.2d€435,€437€(Tenn.€1998);€òòRobinson€v.Ð ÜÔ ÐOmeróó,€952€S.W.2d€423,€426€(Tenn.€1997).€€We€must€view€the€evidence€and€allÐ ¨  Ðreasonable€inferences€in€the€light€most€favorable€to€the€nonmoving€party.€€òòByrdóó,€847Ð tl ÐS.W.2d€at€210„11.€€If€both€the€facts€and€conclusions€to€be€drawn€therefrom€permit€aÏreasonable€person€to€reach€only€one€conclusion,€then€summary€judgment€isÏappropriate.€€òòRobinsonóó,€952€S.W.2d€at€426;€òòBains€v.€Wellsóó,€936€S.W.2d€618,€622Ð Ø#Ð  Ð(Tenn.€1997).€€€€€€€€€€€à à àÐ ¤%œ" ÐÌà@+€àò òDISCUSSIONó óˆÐ <)4"& ÐÌà@HH/€àò òI.ó óˆÐ à,Ø%* ÐÌà Ø àWe€shall€first€address€whether€summary€judgment€was€appropriate€on€theÏquestion€of€constructive€termination.€€Initially,€we€note€that€the€issue€of€constructiveÏtermination€in€this€case€is€distinguishable€from€cases€where€an€at„will€employee€claimsÏconstructive€discharge€based€upon€a€hostile€work€environment,€discrimination,€orÐ è5à.4 Ðsome€non„feasance€on€the€part€of€the€employer.€€òòSeeóó€òòPhillips€v.€Interstate€HotelsÐ  ÐCorp.óó,€974€S.W.2d€680€(Tenn.€1998);€òòCampbell€v.€Florida€Steel€Corp.óó,€919€S.W.2d€26Ð ÔÌ Ð(Tenn.€1996).€€The€appellant€contends€that€Cleo€removed€his€job€title€and€all€workÏresponsibilities,€effectively€terminating€his€employment,€without€officially€or€formallyÏending€the€employment€agreement.€€We€view€this€issue€strictly€as€one€of€breach€ofÏcontract€and€conclude€that€the€evidence€clearly€establishes€that€Cleo€effectivelyÏterminated€appellantððs€employment€without€cause,€thereby€breaching€the€contract.€ÌÌà Ø àBoth€the€appellant€and€Cleo€have€agreed€on€the€facts€leading€up€to€appellantððsÏchange€of€employment.€€Cleo€contends,€however,€that€it€had€a€right€to€alter€theÏappellantððs€work€responsibilities€under€the€employment€contract,€as€it€did€in€this€case,Ïwithout€causing€a€termination.€€In€support€of€that€contention,€Cleo€relies€on€evidenceÏthat€it€allowed€the€appellant€to€stay€on€the€company€payroll€as€a€senior€executiveÏemployee€until€he€obtained€new€employment.ÌÌà Ø àThe€resolution€of€this€dispute€centers€on€the€construction€of€the€employmentÏcontract.€€Cleo€refers€to€that€portion€of€the€contract€which€states:Ìñ`-ñœñ`-ñÌñ`-ñ›ñ`-ñÓA0Óà8 Ø àCleo€Inc.€and€I€are€very€pleased€that€you€have€agreed€to€serve€as€ViceÏPresident,€Marketing€of€Cleo€Inc.€ñ`-ñœñ`-ñ...ñ`-ñ›ñ`-ñ€€As€Vice€President,€Marketing€youÏwill€report€to€the€President,€and€perform€those€functions€currentlyÏassigned,€which€functions€and€responsibilities€can€be€changed€at€theÏdiscretion€of€the€Company.€€The€following€terms€and€conditions€willÏgovern€your€service€to€the€Company:€€Ð Ø (#Ø (# ÐÌà8 Ø à1.€€You€will€serve€the€Company€on€a€full„time€basis€as€a€senior€executiveÏemployee,€and€the€Company€will€employ€you€as€such,€for€a€period€ofÏthree€ñ`-ñœñ`-ñyears.€.€.ñ`-ñ›ñ`-ñ€.Ð Ø (#Ø (# Ðñ`-ñœñ`-ñÌñ`-ñ›ñ`-ñÌÌÓÓThe€appellant€relies€on€the€same€contractual€language€to€argue€that€he€was€employedÏas€the€Vice€President€of€Marketing€for€the€company.€€According€to€appellant,€onceÏCleo€removed€his€title€and€work€responsibilities,€it€effectively€ended€his€employment.€Ð ¦6ž/5 Їà Ø àThe€interpretation€of€a€contract€is€a€matter€of€law€that€requires€a€òòde€novoóó€reviewÐ  Ðon€ñ`-ñœñ`-ñappeal.€€òòSeeóóñ`-ñ›ñ`-ñ€ñ`-ñœñ`-ñòòHamblenñ`-ñ›ñ`-ñ€County€v.€City€of€Morristownóó,€656€S.W.2d€331,€335„336Ð ØÐ Ð(Tenn.€1983).€€When€resolving€disputes€concerning€contract€interpretation,€our€task€isÏto€ascertain€the€intention€of€the€parties€based€upon€the€usual,€natural,€and€ordinaryÏmeaning€of€the€contractual€language.€€òòId.óó€at€333„34;€òòBob€Pearsall€Motors,€Inc.€v.Ð <4 ÐRegal€Chrysler„Plymouth,€Inc.óó,€521€S.W.2d€578,€580€(Tenn.€1975).€€All€provisions€inÐ   Ðthe€contract€should€be€construed€in€harmony€with€each€other,€if€possible,€to€promoteÏconsistency€and€to€avoid€repugnancy€between€the€various€provisions€of€a€singleÏcontract.€€òòRainey€v.€Stansellóó,€836€S.W.2d€117,€ñ`-ñœñ`-ñ118„19ñ`-ñ›ñ`-ñ€(Tenn.€App.€1992),€òòperm.€app.Ð ld Ðdeniedóó€(Tenn.€1992).€€€Ð <4 ÐÌà Ø àIn€this€case,€the€contract€refers€to€appellantððs€position€of€employment€in€twoÏseparate€provisions.€€The€opening€provision€states€that€he€will€ð ðserve€as€ViceÏPresident€of€Marketing€for€Cleo,€Inc.,ðð€reporting€to€the€company€president€andÏconducting€work€functions€that€were€currently€assigned.€€The€subsequent€provisionÏunder€Paragraph€1€describes€his€position€as€a€full„time€senior€executive€employee.€€ÌWe€read€those€provisions€together€to€mean€that€as€Vice€President€of€Marketing,€theÏappellant€was€to€be€a€full„time€senior€executive€employee€in€the€company.׃×Ý ƒ #ÃÝòòÚ  Ú4Ú  ÚóóÝ  Ý×  ×€€CleoÐ  %˜" Ðpromoted€the€appellant€to€that€position€with€the€condition€that€it€could€change€his€jobÏfunctions€and€responsibilities€during€the€course€of€the€three„year€contract.€€ThoseÏchanges€may€have€included€altering€his€official€job€title.€€However,€Cleo€wasÏcontractually€obligated€to€maintain€appellantððs€employment€as€a€full„time€seniorÏexecutive€employee€unless€there€was€a€cause€for€termination.׃Ð×Ý ƒ #ÃÝòòÚ  Ú5Ú  ÚóóÝ  Ý×  ×€€Cleoððs€contractualÐ œ.”', Ðright€to€change€the€appellantððs€work€duties€did€not€include€the€right€to€remove€all€of€hisÏduties.€€€€€ÌÌÓùKÓÓæ,Óà Ø àCleo€contends€that€it€fulfilled€its€contractual€obligation€by€keeping€the€appellantÏon€the€company€payroll€at€his€then€current€salary,€even€though€it€altered€andÏeffectively€ended€his€work€responsibilities.€€Cleo€relies€on€the€Court€of€AppealððsÏdecision€in€òòCanady€v.€Meharry€Med.€Collegeóó,€811€S.W.2d€902€(Tenn.€App.€1991),Ð ÐÈ  Ðòòperm.€app.€deniedóó€(Tenn.€1991).€€In€òòCanadyóó,€the€defendant/employer€restricted€theÐ œ”  Ðplaintiffððs€work€duties€and€decided€not€to€renew€his€employment€contract€as€a€hospitalÏresident€physician€after€the€plaintiff€received€unsatisfactory€job„performance€ratings.€ÏòòId.óó€at€904.€€The€court€concluded,€in€part,€that€the€restriction€of€plaintiffððs€work€duties€didÐ ü Ðnot€constitute€a€breach€of€the€contract€because€the€contract€contained€no€express€orÏimplied€assurance€that€the€plaintiff€would€be€given€continuous,€uninterrupted€workÏassignments.€€òòId.óó€at€906.€€Ð h` ÐÌà Ø àThe€circumstances€in€òòCanadyóó€are€clearly€distinguishable€from€the€appellantððsÐ "ø Ðcase.€€Here,€we€are€not€dealing€exclusively€with€a€change€or€restriction€of€appellantððsÏwork€responsibilities.€€The€facts€are€undisputed€that€Cleo€not€only€demoted€theÏappellant€from€his€position€as€Vice€President€of€Marketing,€but€also€ordered€him€toÏstay€at€his€home€and€wait€for€any€future€assignments.€€During€the€three€months€thatÏthe€appellant€stayed€at€home,€he€received€no€work€assignments€and€apparently€didÏnot€perform€any€functions€on€behalf€of€the€company.€€In€addition,€Cleo€reclaimedÏappellantððs€company€credit€cards€and€informed€him€that€the€company€would€no€longerÏanswer€telephone€calls€for€him.€€All€business€contacts€for€Cleo€and€authority€to€act€onÏbehalf€of€the€company€were€taken€away€from€the€appellant.€€€€€ÌÐ ø3ð,2 Ðò òà Ø àó óThe€undisputed€facts€in€this€case€support€the€lower€courtsðð€holding€that€theÐ  Ðappellant€was€constructively€terminated€from€his€employment.€€Moreover,€Cleo€has€notÏshown€cause€to€justify€the€termination.€€We,€therefore,€conclude€that€summaryÏjudgment€for€the€appellant€was€appropriate€on€that€issue.ÌÌà@,,/€àò òII.ó óˆÐ ü  ÐÌà Ø àWe€shall€next€address€whether€Paragraph€9€of€the€employment€contractÏprovides€for€severance€pay€or€liquidated€damages.€€The€appellant€contends€thatÏParagraph€9€contemplates€severance€pay€because€its€payment€is€not€specificallyÏconditioned€upon€a€breach€of€contract.€€Cleo€argues€to€the€contrary€that€the€sumsÏunder€Paragraph€9€are€liquidated€damages€because€that€paragraph€calls€for€theÏpayment€of€a€set€amount€in€the€event€of€a€certain€occasion.€€Cleo€contends,€however,Ïthat€no€matter€what€label€is€given€to€the€provision,€it€is€unenforceable€because€theÏappellant€suffered€no€actual€monetary€damages.€€ÌÌà Ø àThe€Court€of€Appeals€interpreted€Paragraph€9€of€the€employment€contract€as€aÏliquidated€damages€provision€because€it€contemplates€the€ð ðpayment€of€a€sum€certainÏin€the€event€of€a€certain€occasion.ðð€€We€agree€that€Paragraph€9€provides€for€liquidatedÏdamages,€not€severance€pay.€€However,€our€interpretation€of€Paragraph€9€is€basedÏupon€the€specific€contract€language€that€recovery€is€due€in€the€event€that€CleoÏð ðterminates€this€agreement€and€[appellantððs]€employment€without€cause,ðð€resulting€in€aÏbreach€of€the€contract.€ÌÌà Ø àThe€distinction€between€liquidated€damages€and€severance€pay€is€important€inÏthis€case.€€If€Paragraph€9€provides€for€liquidated€damages,€then€recovery€isÏconditioned€upon€a€showing€that€Cleo€breached€the€contract€and€that€the€amount€of€Ð Ì5Ä.4 Ðrecovery€was€a€reasonable€estimation€of€damages.€€However,€if€the€provision€calls€forÏseverance€pay,€then€recovery€by€the€appellant€is€absolute€in€the€event€of€hisÏtermination,€regardless€of€whether€Cleo€breached€the€contract€or€whether€the€amountÏwas€a€reasonable€damage€assessment.€€€€€ÌÌà Ø àThe€term€ð ðliquidated€damagesðð€is€defined€by€case€law€as€a€ð ðsum€stipulated€andÏagreed€upon€by€the€parties€at€the€time€they€enter€their€contract,€to€be€paid€toÏcompensate€for€injuries€should€a€breach€occur.ðð€€òòV.L.€Nicholson€Co.€v.€Transcon€Inv.€&Ð œ”  ÐFin.€Ltd.,€Inc.óó,€595€S.W.2d€474,€484€(Tenn.€1980);€òòKimbrough€&€Co.€v.€Schmittóó,€939Ð h` ÐS.W.2d€105,€108€(Tenn.€App.€1996),€òòperm.€app.€deniedóó€(Tenn.€1996).€€The€stipulatedÐ 4, Ðamount€represents€an€estimate€of€potential€damages€in€the€event€of€a€contractualÏbreach€where€damages€are€likely€to€be€uncertain€and€not€easily€proven.€€òòV.L.Ð ÐÈ ÐNicholsonóó,€595€S.W.2d€at€484.€€Ð œ” ÐÌà Ø àIn€contrast,€the€recovery€of€severance€pay€is€not€conditioned€upon€a€breach€ofÏcontract€or€a€reasonable€estimation€of€damages.€€Generally,€severance€pay€is€a€formÏof€compensation€paid€by€an€employer€to€an€employee€at€a€time€when€the€employmentÏrelationship€is€terminated€through€no€fault€of€the€employee.€€òòBlackððs€Law€DictionaryóóÐ ˜%" Ð1374€(6th€ed.€1990).€€The€reason€for€severance€pay€is€to€offset€the€employeeððsÏmonetary€losses€attributable€to€the€dismissal€from€employment׃×Ý ƒ #ÃÝòòÚ  Ú6Ú  ÚóóÝ  Ý×  ×€and€to€recompenseÐ 0)("& Ðthe€employee€for€any€period€of€time€when€he€or€she€is€out€of€work.€€òòBradwell€v.€GAFÐ ü*ô#( ÐCorp.óó,€954€F.2d€798,€800€(2nd€Cir.€1992);€27€Am.€Jur.2d€òòEmployment€Relationshipóó€ððÐ È,À%* Ð70€(1996).€ñ`-ñœñ`-ñ€Theñ`-ñ›ñ`-ñ€amount€of€payment€is€generally€based€upon€the€types€of€services€andÏthe€number€of€service€years€performed€by€the€employee€on€behalf€of€the€employer.€ÏòòSeeóó€òòBalding€v.€ñ`-ñœñ`-ñTennesseeñ`-ñ›ñ`-ñ€ñ`-ñœñ`-ñDepððtñ`-ñ›ñ`-ñ€of€Employment€Sec.óó,€212€Tenn.€517,€370€S.W.2dÐ 02(+0 Ð546,€548€(1963).€€€€€€€€€€€€€€€€Ð ü3ô,2 Їà Ø àWith€these€principles€in€mind,€we€focus€on€the€language€in€Paragraph€9€toÏdetermine€whether€liquidated€damages€or€severance€pay€was€contemplated.ÏParagraph€9€provides€that€if€Cleo€terminates€the€contract€and€appellantððs€employmentÏwithout€cause,€the€appellant€shall€continue€to€receive€his€then€current€salary€from€theÏdate€of€termination€until€October€31,€1995,€the€contract€expiration€date.€€Paragraph€9Ïdoes€not€state€that€sums€payable€are€based€upon€an€€estimation€of€damages€in€theÏevent€of€a€breach€of€contract.€€However,€it€is€clear€that€the€provision€affords€theÏappellant€a€set€amount€of€compensation€in€the€event€that€Cleo€terminates€theÏagreement€and€appellantððs€employment,€without€cause,€before€the€end€of€theÏcontract.ñ`-ñœñ`-ññ`-ñ׃×ñ`-ññ`-ñ׃×ñ`-ñÝ ƒ #ÃÝòòÚ  Ú7Ú  ÚóóÝ  Ý×  ×ñ`-ñ›ñ`-ñ€€Relying€on€the€plain€meaning€of€the€language€in€Paragraph€9,€we€concludeÐ 4, Ðthat€recovery€therein€is€conditioned€upon€Cleoððs€breach€of€contract.€€ÌÌà Ø àA€contractual€provision€need€not€explicitly€include€the€term€ð ðliquidatedÏdamagesðð€to€constitute€a€liquidated€damages€provision.€€In€cases€as€here,€where€aÏprovision€entitles€one€party€to€a€stipulated€recovery€following€an€event€that€constitutesÏa€breach€of€contract,€courts€must€look€to€the€substance€of€the€provision€and€theÏintentions€of€the€parties€to€determine€whether€the€provision€calls€for€liquidatedÏdamages.€€If€the€parties€agree€in€the€contract€on€the€amount€of€damages€to€beÏrecovered€for€compensation,€upon€the€occurrence€of€a€particular€defaulting€event,Ïthen€the€damages€are€liquidated€unless€the€contract€states€otherwise.€€òòSeeóó€òòV.L.Ð ,)$"& ÐNicholsonóó,€595€S.W.2d€at€484.€€€€€€€€€Ð ø*ð#( Ðâ âÐ Ä,¼%* Ðà Ø àThe€language€in€Paragraph€9€reflects€the€partiesðð€intentions€to€compensate€theÏâ âappellant€with€a€set€monetary€amount€in€the€event€that€Cleo€terminated€the€contractÏand€the€employment€relationship€without€cause,€before€the€end€of€the€three„year€term.€ÏHaving€further€determined€that€the€termination€in€this€case€was€a€breach€of€contract,Ïwe€interpret€Paragraph€9€as€contemplating€the€payment€of€liquidated€damages.€€€€€€€ÌÌà@.€àò òIII.ó óˆÐ ÐÈ  ÐÌà Ø àThe€remaining€question€is€whether€the€appellant€may€recover€any€or€all€of€theÏdamages€set€forth€in€Paragraph€9.€€Under€that€paragraph,€the€sum€payable€is€theÏremainder€of€appellantððs€then€current€salary€from€the€date€of€termination€until€the€endÏof€the€contract€term€on€October€31,€1995.€€The€appellantððs€salary€as€of€DecemberÏ1994,€was€$103,000.€€Based€upon€that€amount€and€the€formula€provided€in€ParagraphÏ9,€the€trial€court€determined€that€the€remainder€of€salary€owed€under€the€three„yearÏcontract€was€$90,125.׃×Ý ƒ #ÃÝòòÚ  Ú8Ú  ÚóóÝ  Ý×  ×€€€€€€€€Ð < 4 ÐÌà Ø àCleo€does€not€dispute€the€calculation€of€damages€in€this€case,€but€insteadÏcontends€that€the€$90,125€amount€plus€prejudgment€interest€is€grossly€disproportionalÏto€any€actual€damages€suffered€by€the€appellant.€€Since€the€appellant€obtained€newÏemployment€on€December€12,€1994,€with€an€annual€salary€of€$110,000,€Cleo€arguesÏthat€appellantððs€recovery€of€liquidated€damages€under€Paragraph€9€would€constituteÏan€unlawful€penalty.€€€€€€€€€€€€€ÌÌà Ø àThe€basis€of€Cleoððs€contention€is€that€if€the€appellant€suffered€no€actualÏdamages€from€the€termination€of€his€employment,€then€his€recovery€under€ParagraphÐ 42,+0 Ð9€would€have€no€compensatory€function,€but€would€instead€simply€punish€Cleo€for€theÏtermination.€€Both€parties€acknowledge€that€Tennessee€law€disfavors€the€enforcementÏof€a€liquidated€damages€provision€when€the€provision€serves€only€to€penalize€theÏdefaulting€party€for€a€breach€of€contract.€€òòSeeóó€òòTesterman€v.€Home€Beneficial€Life€Ins.Ð l d ÐCo.óó,€524€S.W.2d€664,€668€(Tenn.€App.€1974),€òòperm.€app.€deniedóó€(Tenn.€1975).Ô‡XVDXXXº½Ô׃×Ý ƒ #ÃÝòòÚ  Ú9Ú  ÚóóÝ  Ý×  ×€€€€Ô#†Xº½XXXVDÕ}#Ô€€Ð 80 ЀÌà Ø àThe€fundamental€purpose€of€liquidated€damages€is€to€provide€a€means€ofÏcompensation€in€the€event€of€a€breach€where€damages€would€be€indeterminable€orÏotherwise€difficult€to€prove.€€òòV.L.€Nicholsonóó,€595€S.W.2d€at€484;€22€Am.€Jur.€2dÐ €x ÐòòDamagesóó€ðð€683€(1988);€Restatement€(Second)€of€Contracts€ðð€356€cmt.€(1979).€€ByÐ LD Ðstipulating€in€the€contract€to€the€damages€that€might€reasonably€arise€from€a€breach,Ïthe€parties€essentially€estimate€the€amount€of€potential€damages€likely€to€be€sustainedÏby€the€nonbreaching€party.€€ð ðIf€Ô€XVDXXXº½Ôthe€[contract]€provision€is€a€reasonable€estimate€of€theÐ ´¬ Ðdamages€that€would€occur€from€a€breach,€then€the€provision€is€normally€construed€asÏan€enforceable€stipulation€for€liquidated€damages.ðð€€òòV.L.€Nicholsonóó,€595€S.W.2d€atÐ x p Ð484€(citing€òòCity€of€Bristol€v.€Bostwickóó,€146€Tenn.€205,€240€S.W.€774€(1921);€22€Am.Ð X"P ÐJur.€òòDamagesóó€ðð€227€(1965)).€€However,€if€the€stipulated€amount€is€unreasonable€inÐ 8$0  Ðrelation€to€those€potential€or€estimated€damages,€then€it€will€be€treated€as€a€penalty.€Ï22€Am.€Jur.€2d€òòDamagesóó€ðð€686€(1988);€Restatement€(Second)€of€Contracts€ðð€356Ð ø'ð $ Ð(1979).ÌÌà Ø àAlthough€most€jurisdictions€disfavor€the€enforcement€of€penalties€under€contractÏlaw,€there€is€a€split€in€authority€on€the€proper€method€for€determining€whether€aÏliquidated€damages€provision€constitutes€a€penalty.€€One€method,€commonly€referredÐ X1P*. Ðto€as€the€ð ðprospective€approach,ðð€focuses€on€the€estimation€of€potential€damages€andÏthe€circumstances€that€existed€at€the€time€of€contract€formation.ñ`-ñœñ`-ññ`-ñ׃ ×ñ`-ññ`-ñ׃×ñ`-ñÝ ƒ #ÃÝòòÚ  Ú10Ú  ÚóóÝ  Ý×  ×ñ`-ñ›ñ`-ñ€€Under€thisÐ èà Ðapproach,€the€amount€of€actual€damages€at€the€time€of€breach€is€of€little€or€noÏsignificance€to€the€recovery€of€liquidated€damages.€€22€Am.€Jur.€2d€òòDamagesóó€ðð€723Ð ¨   Ð(1988).€€If€the€liquidated€sum€is€a€reasonable€prediction€of€potential€damages€and€theÏdamages€are€indeterminable€or€difficult€to€ascertain€at€the€time€of€contract€formation,Ïthen€courts€following€the€prospective€approach€will€generally€enforce€the€liquidatedÏdamages€provision.€€òòSeeóó€òòe.g.óó€òòGaines€v.€Jonesóó,€486€F.2d€39,€46€(8th€Cir.€1973)Ð (  Ð(applying€Missouri€law);€òòBrazen€v.€Bell€Atl.€Corp.óó,€695€A.2d€43,€48€(Del.€1997).€€€€€€€€€€€€€Ð  ÐÌà Ø àIn€contrast,€a€second€approach€has€developed€in€which€courts€not€only€analyzeÏthe€estimation€of€damages€at€the€time€of€contract€formation,€but€also€address€whetherÏthe€stipulated€sum€reasonably€relates€to€the€amount€of€actual€damages€caused€by€theÏñ`-ñœñ`-ñbreach.ñ`-ñ›ñ`-ñ׃x ×Ý ƒ #ÃÝòòÚ  Ú11Ú  ÚóóÝ  Ý×  ×€€Under€this€retrospective€approach,€the€estimation€of€potential€damages€andÐ h` Ðthe€difficulty€in€measuring€damages€remain€integral€factors€for€the€courtsðð€review.€€òòSeeóóÐ H!@ Ðòòe.g.óó€òòLake€Ridge€Academy€v.€Carneyóó,€613€N.E.2d€183,€188„89€(Ohio€1993);€òòHighgateÐ (#  ÐAssoc.,€LTD.€v.€Merryfieldóó,€597€A.2d€1280,€1282€(Vt.€1991).€€However,€as€part€of€thatÐ  Ðreview,€the€actual€damages€at€the€time€of€breach€are€also€relevant€in€determiningÏwhether€the€original€estimation€of€damages€was€reasonable.€€òòSeeóó€òòKelly€v.€Marxóó,€694Ð È À ÐN.E.2d€869,€871€(Mass.€Ct.€App.€1998);€òòWassenaar€v.€Panosóó,€331€N.W.2d€357,€361„Ð ¨   Ð62€(Wis.€1983).€€If€the€liquidated€sum€greatly€exceeds€the€amount€of€actual€damages,Ïthen€courts€following€this€latter€approach€will€treat€the€estimated€sum€as€a€penalty€andÏwill€limit€recovery€to€the€actual€damages.€€òòKellyóó,€694€N.E.2d€at€871;€òòShallow€BrookÐ H@  ÐAssoc.€v.€Dubeóó,€599€A.2d€132,€137€(N.H.€1991).€€€€€€€€€€Ð (  ÐÌà Ø àWhile€this€Court€has€not€previously€addressed€the€issue,€we€note€that€the€CourtÏof€Appeals€has€followed€the€latter€approach€using€both€a€prospective€review€of€theÏcircumstances€at€the€time€of€contract€formation€and€a€review€of€the€actual€damages€atÏthe€time€of€breach.€€òòSeeóó€òòÔ‡Xº½XXXVDÔKimbrough€&€Co.óó,€939€S.W.2d€at€108;€òòÔ#†XVDXXXº½µ#ÔBeasley€v.€Horrellóó,€864Ð ˆ€ ÐS.W.2d€45,€50€(Tenn.€App.€1993),€òòperm.€app.€deniedóó€(Tenn.€1993);€òòKendrick€v.Ð ld ÐAlexanderóó,€844€S.W.2d€187,€190„91€(Tenn.€App.€1992),€òòperm.€app.€deniedóó€(Tenn.Ð L!D Ð1992);€òòHarmonóó,€699€S.W.2d€at€163;€òòEller€Bros.,€Inc.€v.€Home€Fed.€Sav.€&€LoanÐ ,#$ ÐAssoc.óó,€623€S.W.2d€624,€628€(Tenn.€App.€1981),€òòperm.€app.€deniedóó€(Tenn.€1981).€Ð  %  ÐAfter€careful€consideration,€we€find€that€there€are€inherent€problems€with€theÏretrospective€analysis€and€are€persuaded€that€a€prospective€approach€is€the€betterÏrule.€€Therefore,€to€the€extent€that€the€Court€of€Appeals€has€adopted€a€retrospectiveÏapproach,€those€cases€are€overruled.€€Ìò òÌà Ø àó óFrom€our€review€of€the€law€on€liquidated€damages,€we€recognize€that€there€areÐ L0D), Ðtwo€important€interests€at€issue:€€the€freedom€of€parties€to€bargain€for€and€to€agreeÏupon€terms€such€ñ`-ñœñ`-ñasñ`-ñ›ñ`-ñ€liquidated€damages€and€the€limitations€set€by€public€policy.€ÏGenerally,€the€parties€to€a€contract€are€free€to€agree€upon€liquidated€damages€andÐ ì5ä.2 Ðupon€other€terms€that€may€not€seem€desirable€or€pleasant€to€outside€observers.€€òòSeeóóÐ  ÐòòChapman€Drug€Co.€v.€Chapmanóó,€207€Tenn.€502,€341€S.W.2d€392,€398€(1960);€22€Am.Ð èà ÐJur.€2d€òòDamagesóó€ðð€686€(1988).€€In€that€respect,€courts€should€not€interfere€in€theÐ È À Ðcontract,€but€should€carry€out€the€intentions€of€the€parties€and€the€terms€bargained€forÏin€the€contract,€unless€those€terms€violate€public€policy.€€òòSeeóó€ñ`-ñœñ`-ñòòMcKayñ`-ñ›ñ`-ñ€v.€Louisville€&ò òÐ ˆ€ Ðó óN.R.€Co.óó,€133€Tenn.€590,€182€S.W.€874,€875€(1916)€(citing€òòBaltimore€&€Ohio€S.W.€Ry.Ð h`  ÐCo.€v.€Voightóó,€176€U.S.€498,€505,€20€S.Ct.€385,€387,€44€L.Ed.€560€(1900)).ò òÐ H@  ÐÌà Ø àó óBoth€the€prospective€and€the€retrospective€approaches€allow€courts€to€reviewÐ  Ðliquidated€damages€provisions€together€with€the€limitations€set€by€public€policy.€ÏHowever,€we€conclude€that€the€prospective€approach€is€the€better€rule€based€upon€theÏconsideration€it€affords€to€the€intentions€of€the€parties€and€to€the€freedom€to€contract.ò òÐ ¨  Ðó óÌà Ø àWhen€parties€agree€to€a€liquidated€damages€provision,€it€is€generally€presumedÏthat€they€considered€the€certainty€of€liquidated€damages€to€be€preferable€to€the€risk€ofÏproving€actual€damages€in€the€event€of€a€breach.€€22€Am.€Jur.€2d€òòDamagesóó€ðð€726.€€Ð (#  ÐLiquidated€damages€permit€the€parties€to€allocate€business€and€litigation€risks€andÏoften€serve€as€part€of€the€contractual€bargain.€€In€addition,€they€lend€certainty€to€theÏcontractual€agreement€and€allow€the€parties€to€resolve€defaults€and€other€relatedÏdisputes€efficiently,€when€actual€damages€are€impossible€or€difficult€to€measure.€€ñ`-ñœñ`-ñC.T.ÏMcCormick,€òòHandbook€on€the€Law€ofñ`-ñ›ñ`-ñ€Damagesóó€ðð€157€(1935).ò òÐ ˆ,€%( ÐÌà Ø àó óThe€retrospective€approach,€however,€undermines€the€certainty€and€otherÐ H0@), Ðbenefits€afforded€by€liquidated€damages.€€Under€that€approach,€the€parties€areÏallowed€to€fully€litigate€actual€damages€following€a€breach€of€contract.€€€If€theÏnonbreaching€party€fails€to€prove€actual€damages,€then€he€or€she€is€barred€fromÐ è5à.2 Ðrecovering€the€liquidated€sum€originally€agreed€upon€in€the€contract.€€We€find€that€it€isÏunfair€to€require€the€nonbreaching€party€to€prove€actual€damages€in€cases€where€theÏparties€agreed€in€advance€to€a€liquidated€damages€provision.€€Such€a€requirementÏignores€the€original€intentions€of€the€parties€and€defeats€the€purposes€of€stipulating€inÏadvance€to€potential€damages.Ìò òÌà Ø àó óWe,€therefore,€adopt€a€prospective€approach€for€addressing€the€recovery€ofÐ H@  Ðliquidated€damages.€€Under€this€approach,€courts€must€focus€on€the€intentions€of€theÏparties€based€upon€the€language€in€the€contract€and€the€circumstances€that€existed€atÏthe€time€of€contract€formation.׃×Ý ƒ #ÃÝòòÚ  Ú12Ú  ÚóóÝ  Ý×  ×€€Those€circumstances€include:€€whether€the€liquidatedÐ èà Ðsum€was€a€reasonable€estimate€of€potential€damages€and€whether€actual€damagesÏwere€indeterminable€or€difficult€to€measure€at€the€time€the€parties€entered€into€theÏcontract.€€òòSeeóó€òòV.L.€Nicholsonóó,€595€S.W.2d€at€484.€€If€the€provision€satisfies€thoseÐ ˆ€ Ðfactors€and€reflects€the€partiesðð€intentions€to€compensate€in€the€event€of€a€breach,Ïthen€the€provision€will€be€upheld€as€a€reasonable€agreement€for€liquidated€damages.€ò òÐ H!@ Ðó óHowever,€ñ`-ñœñ`-ñif€the€provision€and€circumstances€indicate€that€the€parties€intended€merelyÐ (#  Ðto€penalize€for€a€breach€of€contract,€then€the€provisionñ`-ñ›ñ`-ñ€is€unenforceable€as€againstÏpublic€policy.€€€€Ìñ`-ñœñ`-ñÌñ`-ñ›ñ`-ñÌà@/€àò òIV.ó óˆÐ ˆ,€%( ÐÌà Ø àWe€now€turn€to€the€liquidated€damages€provision€in€this€case.€€The€Court€ofÏAppeals€found€that€the€liquidated€sum€was€a€reasonable€estimation€of€potentialÐ (2 +. Ðdamages€at€the€time€the€parties€entered€into€the€contract.€€We€agree.€€Neither€theÏappellant€nor€Cleo€had€certain€knowledge,€when€forming€the€contract,€that€theÏappellant€would€be€able€to€secure€other€employment€in€the€event€that€Cleo€terminatedÏhis€employment€without€cause.€€It€was€within€the€fair€contemplation€of€the€parties€thatÏthe€appellant€might€not€be€able€to€find€a€similar€professional€position€at€the€sameÏsalary€and€that€he€might€suffer€damages€that€would€be€difficult€to€prove,€including€lossÏof€professional€status,€prestige,€and€advancement€opportunities.€€The€language€inÏParagraph€9€reflects€the€partiesðð€intentions€to€compensate€and€to€protect€the€appellantÏagainst€those€potential€losses€in€the€event€of€a€breach€by€Cleo.ÌÌà Ø àThe€Court€of€Appeals,€however,€went€further€in€addressing€whether€theÏstipulated€sum€reasonably€related€to€the€appellantððs€actual€damages.€€Cleo€insists€thatÏthe€intermediate€courtððs€analysis€was€both€proper€and€fair€based€upon€the€fact€that€theÏappellant€obtained€new€employment€at€a€higher€salary€after€the€termination.€€While€weÏquestion€whether€the€record€is€sufficient€on€the€issue€of€actual€damages,׃×Ý ƒ #ÃÝòòÚ  Ú13Ú  ÚóóÝ  Ý×  ×€weÐ H!@ Ðconclude€that€the€extent€of€actual€damages€has€no€bearing€on€the€appellantððs€recoveryÏof€liquidated€damages€under€Paragraph€9.€€The€liquidated€sum€is€recoverable€basedÏupon€our€conclusion€that€it€was€reasonable€at€the€time€the€parties€entered€into€theÏcontract€and€that€it€reflects€the€partiesðð€original€intentions€to€compensate€for€aÏtermination€of€employment.ÌÌà Ø àThe€parties€themselves€were€in€the€best€position€to€know€what€considerationsÏinfluenced€their€bargaining€at€the€time€they€entered€into€the€contract.€€While€ð ððð[t]heÏbargain€may€be€an€unfortunate€one€for€the€delinquent€party,€...€it€is€not€the€duty€ofÐ (2 +. Ðcourts€of€common€law€to€relieve€parties€from€the€consequences€of€their€ownÏimprovidence.ðððð€€òòWatson€v.€Ingramóó,€881€P.2d€247,€250€(Wash.€1994)€(quoting€òòDwinelÐ èà Ðv.€Brownóó,€54€Me.€468,€470€(1867)).€€òòSeeóó€òòalsoóó€òòMcKayóó,€182€S.W.€at€875;€òòWhaley€v.Ð È À ÐUnderwoodóó,€922€S.W.2d€110,€112€(Tenn.€App.€1995).€€Accordingly,€to€the€extent€theÐ ¨   ÐCourt€of€Appeals€based€its€decision€upon€a€review€of€actual€damages,€that€decision€isÏoverruled.€€€€ÌÌò òà@àà+€àCONCLUSIONó óˆÐ (  ÐÌà Ø àBased€upon€the€foregoing,€we€conclude€that€summary€judgment€for€theÏappellant€was€appropriate€on€the€issue€of€constructive€termination.€€Moreover,Ïbecause€Paragraph€9€was€a€reasonable€estimation€of€damages€at€the€time€the€partiesÏentered€into€the€contract,€we€conclude€that€the€appellant€is€entitled€to€recover€the€fullÏamount€stipulated€in€that€provision.€€The€judgment€of€the€Court€of€Appeals€is€reversedÏand€the€trial€courtððs€award€of€summary€judgment€for€the€appellant€is€reinstated.€€CostsÏof€this€appeal€are€taxed€to€the€appellee,€Cleo.€€€€€€€€€ÌÓQVÓÌÌà Ø àà 0 àà ˆ àà à àà 8 àà  àà è à______________________________Ìà Ø àà 0 àà ˆ àà à àà 8 àà  àà è àWILLIAM€M.€BARKER,€JUSTICEÌÌÌÌñ`-ñœñ`-ñCONCUR:ñ`-ñ›ñ`-ñÌÌAnderson,€C.J.,ÌDrowota,€Birch,€Holder,€œñ`-ñœñ`-ñJJ.ñf-ñÌñf-ñ›œñg-ñÌÌÌÌñg-ññ`-ñ›ñ`-ññg-ñÌÌñg-ññ`-ñœñ`-ññg-ñÔ‡Xº½XXXVDÔÑ7€º½XXdæXXdæ7ÑÑ  ÑÓ=€º½XÐXdXÐXd=Óà@%€àSUPREME€COURT,€JACKSONˆÐ ø4ð-1 ÐÌñc-ñÌñc-ññg-ññd-ñÌÌñd-ññg-ñÌANTHONY€P.€GUILIANOà à àà 8 àà  à)Ð 8ˆ15 Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)Ìà Ø àPlaintiff/Appellantà à àà 8 àà  à)à è àSHELBY€CIRCUITÐ îæ Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)à è à67428€T.D.€BelowÐ ÔÌ Ðv.à Ø àà 0 àà ˆ àà à àà 8 àà  à)Ð º ² Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)à è à02S01„9801„CV„00002Ð   ˜ ÐCLEO,€INC.à 0 àà ˆ àà à àà 8 àà  à)à è àÐ † ~ Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)à è àCourt€of€Appeals€Reversed,à  # àÐ l d Ðà Ø àDefendant/Appelleeà 8 àà  à)à è àTrial€Court€AffirmedÐ R J Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)à è àÐ 80 Ðà Ø àà 0 àà ˆ àà à àà 8 àà  à)Ìà Ø àà 0 àà ˆ àà à àà 8 àà  àÌÌÔ#†XVDXXXº½=²#Ôòòà0 Ø àà € àà@UU,€Ø €%Ø €%àJUDGMENTóóˆà @ àÐ ÐÈ  ÐÓÓÌà Ø àThis€case€was€heard€on€the€record€on€appeal€from€the€Court€of€Appeals,Ïapplication€for€permission€to€appeal€having€heretofore€been€granted,€with€briefs€andÏargument€of€counsel;€and€in€consideration€thereof,€this€Court€is€of€the€opinion€that€theÏappellant,€Anthony€P.€Guiliano,€was€terminated€from€his€employment€and€that€theÏliquidated€damages€provision€is€fully€enforceable€against€the€appellee,€Cleo,€Inc.ÌÌà Ø àIn€accordance€with€the€opinion€filed€herein,€it€is,€therefore,€ordered€andÏadjudged€that€the€judgment€of€the€Court€of€Appeals€is€reversed€and€the€trial€courtððsÏorder€granting€summary€judgment€in€favor€of€the€appellant€is€affirmed.€€The€case€isÏremanded€to€the€Circuit€Court€of€Shelby€County€for€the€execution€of€the€judgment€andÏfor€the€collection€of€costs€accrued€below.ÌÌà Ø àCosts€of€this€appeal€will€be€paid€by€the€appellee€for€which€execution€shall€issueÏif€necessary.ÌÓ€¸ÓÌÌÌÌ06/28/99€€€ñg-ññ`-ñ›œñ`-ññ_-ññ^-ñÐ ô8ì16€ Ðñ^-ññ_-ññ`-ñ›ñ`-ññb-ñña-ñÐ ô8ì16ï Ðña-ññb-ñ›