The primary published case is Del Monte Properties & Investments, Inc. v. Dolan (2018) 26 Cal.App.5th Supp. 20, 24. In Del Monte the Court held that the landlord must prove that the actual losses caused by late payment of rent were extremely difficult or impracticable to determine. Moreover, an agreement to the term setting the amount is not enough. Landlord must show that the losses caused by late payment of rent in this case were extremely difficult or impracticable to determine, liquidated damages were not justified under Civil Code § 1671.
The Court also held that “Setting the liquidated damages to a percentage of the contract price demonstrates a purpose other than compensating losses. Garrett v. Coast & Southern Fed. Sav. & Loan Assn., 9 Cal.3d at 740. Some analysis of actual losses is required prior to setting the amount. Util. Consumers’ Action Network, Inc. v. AT&T Broadband of Southern California, Inc. (2006) 135 Cal.App.4th 1023, 1031. Post-hoc rationalization will be rejected. In re Cellphone Termination Fee Cases, 193 Cal.App.4th at 328.
(Del Monte Properties & Investments, Inc. v. Dolan (2018) 26 Cal.App.5th Supp. 20, 24 )