answered on 02/08/2017
Since both you and the recruitment agency have mutually agreed on the clause providing for payment of liquidated damages as stated in the agreement, and that specific breach has occurred thereby triggering the operation of the clause, it is likely to be enforceable if the court deems the sum of 100% of offered salary as a “genuine pre-estimate of loss” caused to the recruitment agency, as assessed at the time of contract formation. It will not be enforceable if found to be a “penalty”. Some situations where it will be held to be a penalty include: 1) Where the sum stipulated for is extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach. 2) If the breach consists only in not paying a sum of money, and the sum stipulated is a sum greater than the sum which ought to have been paid.