offer letter contract clause- liquidated damage query
2 years ago
I got an offer letter from a company and it was written in the offer letter that
"Upon acceptance of this Offer/Letter (“Contract”), should you fail or refuse to commence the performance of duties under this Offer/Letter (“Contract”), on the effective Date as stated under this letter, you shall pay to the Company, an amount equivalent to two (2) months CTC(Cost to the company) as liquidated damages, which is agreed and understood
to be a fair pre-estimate of the damages suffered by the Company on account of such action. Notwithstanding the above,the Company retains the right to a file a claim for damages or take appropriate action in relation to any breach of the obligations by you under this Contract."
i accepted the offer letter(as it was best at that time) but now i have much better offers in hand and i am giving it another thought. So i wanted to ask what is my legal options here . Also is there anyway i can reject to join without incurring any damage. any help plz
Ayantika Mondal @ Prime Legal
Responded 2 years ago
You have to abide by the terms of the contract. You can take any decision you like and the company can't force you to comply with the agreement. But they can sue you for the breach and ask for compensation.
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If there is such a clause you have to abide by it. But that does not mean you can't join any other firm. You may have to pay the abovementioned compensation but if you are in the opinion that the said clause of the agreement is not reasonable, you can challenge the validity of that in court.
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