United Airlines, Inc. v. Austin Travel Corp

867 F.2d 737 (2nd Cir. 1989)

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Nature of the Case

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Facts

United (P) sued Austin (D) to recover damages for a breach of leases obligating D to use P's computerized reservation system. In 1985, D acquired two smaller travel agencies both of which subscribed to Apollo owned by P. By separate agreements, D assumed the contracts of those agencies with P and then executed a five-year Apollo contract covering two of its other locations. P then moved the Sabre system into three locations covered by the Apollo and used the two systems side by side. D then notified P that it wished to discontinue use of the Apollo system at one location. D agreed for a fee of $90,511.43. D accepted and discontinued use. System One then offered indemnity to D to switch to its system. D made the switch and abandoned all the Apollo contracts. D claimed that the liquidated damages clause in the contract was unreasonable and unenforceable. The district court gave the judgment to P for $408,375, and D appealed.