On Nov. 24, 2020, the New York State Court of Appeals issued its decision in Trustees of Columbia Univ. in the City of N.Y. v. D’Agostino Supermarkets, where it found unenforceable certain liquidated damages for breach of a settlement agreement.

In Columbia, the tenant had failed to make timely rent payments to the landlord. The parties then entered into a surrender agreement pursuant to which the tenant agreed, in exchange for termination of the lease, (1) to immediately surrender the leased space back to the landlord; and (2) to make several installment payments to the landlord which, in the aggregate, were equivalent to about 15% of the tenant’s remaining rent under the lease.