Liquidated Damages in Nevada

Liquidated damages in Nevada enforces a remedy to which the parties agreed in the contract, provided that the agreed remedy is not unduly harsh to the defendant and does not fail to provide the plaintiff a meaningful remedy.  Impact Mktg. Int’l LLC, 2012 WL 359914 (citing Mason v. Fakhimi, 865 P.2d 333, 335 (1993) (Under Nevada law, liquidated damages are a good faith estimate of the damages likely to occur upon breach and which the parties agree to in their contract)).  The terms of a valid liquidated damages clause supersede any default award of expectation/compensatory damages. “Liquidated damages have been defined as the sum which a party to a contract agrees to pay if he/she breaks some promise and which, having been arrived at by a good faith effort to estimate the actual damages that will probably ensue from breach, is recoverable as agreed-upon damages if breach occurs.”  Joseph F. Sanson Inv. Co. v. 268 Ltd., 106 Nev. 429, 435, 795 P.2d 493, 496-97 (1990).  In Nevada, liquidated damages are prima facie valid unless the party challenging the provision can prove that it amounts to a penalty.  See Mason v. Fakhimi, 865 P.2d 333, 335 (1993); Joseph F. Sanson Inv. Co., 106 Nev. at 435.  In Joseph F. Sanson Inv. Co., the Supreme Court rejected the awarding of attorney fees under the liquidated damages stipulation that were fifteen times greater than the actual fees billed because this amount resulted in a penalty.  Joseph F. Sanson Inv. Co., 106 Nev. at 435.

Even with the various remedies available, the injured party must do whatever it can to avoid its injury.  Under Avoidable Consequence Doctrine, “a party cannot recover damages for loss that he could have avoided by reasonable efforts.”  Connor v. S. Nev. Paving, Inc., 103 Nev. 353, 356, 741 P.2d 800, 801 (1987); see also Interstate Com. Bldg. Serv., Inc. v. Bank of Am. Nat’l Trust and Sav. Ass’n., 23 F. Supp. 2d 1166, 1176 (D. Nev. 1998) (stating that the parties have the duty to mitigate or minimize their losses flowing from a breach of contract).  The breaching party has the burden of proving that the aggrieved party failed to mitigate damages.  Connor, 103 Nev. at 355.

In Nevada, “disputes regarding breach of contract are questions for a jury to decide.”  Id.  Therefore, once the elements required for a valid contract are established, the enforceability of the breach of contract and the resulting awarding of damages are fact-specific and up to the jury.


See elements for other claims at the Nevada Law Library

Elements for the Defense of Laches

In Nevada, the defense of laches is available where delay by one party results in a disadvantage to the other such that the party seeking the defense of laches had a change in circumstances which would make granting relief to the delaying party inequitable.  Building & Constr. Trades v. Public Works, 108 Nev. 605,839 P.2d 633, 637 (1992).  The delay must cause actual prejudice.  Memory Gardens v. Pet Ponderosas, 88 Nev. 1, 4, 492 P.2d 123, 124 (1972).  The condition of the party asserting laches must become drastically altered, whereby it cannot be restored to its former state.  State v. Rosenthal, 107 Nev. 772, 819 P.2d 1296 (1991).  In circumstances where the statute of limitations has not run on an action, especially strong circumstances must exist to sustain the defense of laches.  Building & Constr. Trades v. Public Works, 108 Nev. 605,839 P.2d 633, 637 (1992).


See elements for other claims at the Nevada Law Library

A Primer On Nevada Business Formation: Three Popular Entities And How To Structure Them


What Type of Entity Should You Form?

Some of the most frequent questions that we receive from clients revolve around entity selection for conducting different types of businesses.  One aspect involves governance and authority.  The issue of governance and authority is important because it determines who has the legal authority to bind the company to contracts and to act on behalf of the company.

The three most popular types of entities are corporations, limited liability companies, and limited partnerships. There are others, however, that might be better suited to your needs. Continue reading A Primer On Nevada Business Formation: Three Popular Entities And How To Structure Them

Do I Need to Hurry and File My Nevada Homestead Exemption?


A Homestead Declaration is a simple document that can protect your home’s equity from attack by creditors. It prevents a forced sale of your home to satisfy your debts to most creditors (unpaid medical bills, bankruptcy, charge card debts, business/personal loans, accidents). Nevada Revised Statutes, Chapter 115 governs the declaration of a homestead. It declares that a homestead is limited to your primary residence. It protects your land with a dwelling on it (including a mobile home or condominium) where you reside. It does not protect any investment or rental property that you own. You are protected up to $550,000 in equity in your primary residence in Nevada. Continue reading Do I Need to Hurry and File My Nevada Homestead Exemption?

Elements for a Claim of Invasion of the Right of Publicity


In Nevada, the elements for a claim of invasion of privacy by invasion of the right of publicity or appropriation of the name and likeness of a famous person are:

  1. Defendant uses the name, voice, signature, photograph or likeness of another by a person, firm or corporation;
  2. Without the permission of the person;
  3. The misappropriation of the person’s likeness or identity is a personal injury;
  4. Defendant sought and obtained commercial value from the misappropriation of the person’s name or likeness;
  5. The commercial value belongs to the famous person;
  6. Plaintiff is entitled to compensation for damages of not less than $750 for the commercial value taken by the defendant; and
  7. Plaintiff is entitled to injunctive relief and punitive damages.

NRS 597.770 – NRS 597.810; People for the Ethical Treatment of Animals v. Bobby Berosini, Ltd., 895 P.2d 1269, 1278 (Nev. 1995); Hetter v. District Court, 110 Nev. 513, 519 (Nev. 1994).


See elements for other claims at the Nevada Law Library

Thinking of Forming Your Business Using an Online Service? Is it Tantamount to Playing Russian Roulette?


Litigators are fairly well known to be the scourge of the civilized world. After all, they are responsible for the number of lawsuits as well as the enormous costs associated with them, right? The truth is that I know litigators like that, but the majority of business attorneys I know do their best to keep their business clients from getting into legal battles. Saving the client from their own mistakes is sometimes difficult. It is made exponentially more difficult when the business owner decides it is cheaper to form the business using one of the various online services or legal software. They might as well be stamped with a warning that in case of a dispute, they almost guarantee full employment for litigators. Continue reading Thinking of Forming Your Business Using an Online Service? Is it Tantamount to Playing Russian Roulette?

Buying A Business:  Are The Assets Free And Clear Of Liens?

When buying a business, the buyer should ensure that all assets must be free and clear of liens.  As a reminder, when purchasing a business, you can purchase either the ownership (the stock or the membership interest, for example) or the assets.  Either or both can be subject to liens.  Therefore, it is imperative that a lien search be conducted. Continue reading Buying A Business:  Are The Assets Free And Clear Of Liens?

Elements for a Claim of Equitable Estoppel or Promissory Estoppel

In Nevada, the elements to prove equitable estoppel or promissory estoppel are:

  1. Party to be estopped must be apprised of true facts;
  2. The party to be estopped must have intended that his conduct shall be acted upon or must so act that the party asserting estoppels has the right to believe it was so intended;
  3. The party asserting estoppel must be ignorant of the true facts; and
  4. The party asserting estoppels relied on the conduct of the other party, to his detriment.

Equitable Estoppel operates to prevent a party from asserting legal rights that, in equity and good conscience, they should not be allowed to assert because of their own conduct.  Silence can raise estoppel.  NGA No. 2 Ltd. Liability Co. v. Rains, 13 Nev. 1151, 946 P.2d 163 (1997); Vancheri v. GNLV. Corp.,105 Nev. 417, 421, 777 P.2d 366, 369 (1989); Pink v. Busch, 100 Nev. 684, 691 P.2d 456 (1984); Cheqer, Inc. v. Painters and Decorators Joint Committee, Inc., 98 Nev. 609, 655 P.2d 996 (1982).


See elements for other claims at the Nevada Law Library

Elements for a Claim of Invasion of Privacy Through Disclosure of False Light

In Nevada, the elements for a claim of invasion of privacy through disclosure of false light are:

  1. The defendant gave publicity to a matter concerning the plaintiff that placed the plaintiff before the public in a false light (at least an implicit false statement of objective fact);
  2. The false light would be highly offensive to a reasonable person;
  3. The defendant had knowledge of, or acted in reckless disregard as to, the falsity of the publicized matter and the false light in which the plaintiff would be placed (requiring actual malice); and
  4. Plaintiff suffered emotional harm.

Flowers v. Carville, 310 F.3d 118, 1132 (9th Cir. 2002); Wood v. Hustler Magazine, Inc., 736 F.2d 1084, 1093 (5th Cir. 1984) (disclosure of stolen nude photos); Vail v. Pioneer Mut. Life. Ins. Co., 2010 U.S. Dist. LEXIS 107994, *5-6 (D. Nev. July 20, 2011) (citing Restatement (Second) of Torts § 652); Flowers v. Carville, 266 F. Supp. 2d 1245, 1252 (D. Nev. 2003).


See elements for other claims at the Nevada Law Library

When Should a Business Owner Consider Disability Insurance?


What is Disability Insurance?

Disability insurance attempts to insure you against any injury, sickness or illness which would prevent you from earning an income. It is designed to replace up to 66% of your gross income on a tax-free basis should you become disabled. It covers both long term and short term disabilities. Don’t think you need disability insurance?

Consider these sobering statistics:

  • Just over 1 in 4 of today’s 20 year-olds will become disabled before they retire. Source: Social Security Administration, Fact Sheet March 18, 2011;
  • Over 36 million Americans are classified as disabled; about 12% of the total population. More than 50% of disabled Americans are in their working years, from 18-64. Source: U.S. Census Bureau;
  • 8.3 million Disabled wage earners, over 5% of U.S. workers, were receiving Social Security Disability (SSDI) benefits at the conclusion of March 2011. Source: Social Security Administration, Disabled Worker Beneficiary Statistics,; and
  • In December 2010, there were over 2.5 million disabled workers in their 20s, 30s, and 40s receiving SSDI benefits. Source: Social Security Administration, Disabled Worker Beneficiary Statistics, . Please consider whether you need disability insurance on yourself or a loved one today.

Smart business owners will partially fund their buy/sell agreements through disability insurance and will carry disability insurance on key employees to benefit the business. Even if you have a policy through your employer, you should consider an additional policy so that your family does not have to worry about income if you become disabled for even a short period of time.



Proving Defamation in Nevada

In Nevada, the elements for a claim of defamation are:

  1. False and defamatory statement by defendant concerning the plaintiff;
  2. Unprivileged publication of the statement to third party;
  3. Some level of fault amounting at least to negligence; and
  4. Actual or presumed damages. Damages which will be presumed if defamation tends to injure plaintiff in his business (defamation per se).

“Defamation” is defined as “a publication of a false statement of fact.”  Pegasus v. Reno Newspapers, Inc., 118 Nev. 706, 714, 57 P.3d 82, 87 (2002).  To succeed on a defamation claim, a plaintiff must prove the following elements: (a) a false and defamatory statement concerning another; (b) an unprivileged publication to a third party; (c) fault amounting at least to negligence on the part of the publisher; and (d) either actionability of the statement irrespective of special harm, or the existence of special harm caused by the publication.  Lubin v. Kunin, 117 Nev. 107, 111, 17 P.3d 422, 425 (2001) (quoting PETA v. Boby Berosini, Ltd., 111 Nev. 615, 619, 895 P.2d 1269, 1272 (1995) (quoting the Restatement (Second) of Torts: Elements Stated § 558 (1965)) modified on other grounds by Las Vegas Dountown Redev. Agency v. Hecht, 113 Nev. 644, 650, 940 P.2d 134, 138 (1997)). Continue reading Proving Defamation in Nevada

Equitable Liens in Nevada

The following abstract explains Nevada law regarding equitable liens.


The Nevada Supreme Court has acknowledged equitable liens as a remedy where an intention to create such a lien appears, and where the property which is to become subject to the lien is identifiable.  Union Indemnity co. v. A.D. Drumm, Inc., 57 Nev. 242, 70 P.2d 767 (1937).      The Nevada Supreme Court has relied upon Professor Pomery’s definition of an equitable lien:

In order, however, that a lien may arise in pursuance of the doctrine of equitable lien, agreement must deal with some particular property, either by identifying it, or by so describing it that it can be identified, and must indicate with sufficient clearness an intent that property so described, or rendered capable of identification, it to be held, or transferred as security for the obligation. Continue reading Equitable Liens in Nevada

Elements for a Claim of Declaratory Relief

In Nevada, the elements for an equitable claim of declaratory relief are:

  1. A justifiable controversy exists between two or more parties;
  2. Regarding their respective rights pursuant to a contract;
  3. Such that the plaintiff asserts a claim of a legally protected right;
  4. The issue is ripe for judicial determination; and
  5. Plaintiff asks the court to determine the parties’ relative rights under the contract.

NRCP 57; NRS Chapter 30; Kress v. Corey, 65 Nev. 1, 189 P.2d 352 (1948).


See elements for other claims at the Nevada Law Library