## Facts

- MX Technologies Inc. (MX) considered hosting a major corporate conference for clients and prospects and tentatively selected the Stein Eriksen Lodge (Stein) as the venue.
- MX assigned its events manager, assisted by an events coordinator, to negotiate with Stein about rooms, food, and related services.
- The events manager signed written agreements with Stein committing MX to more than $350,000 in bookings and services.
- MX maintained an internal policy requiring the chief financial officer (CFO) to approve commitments over $20,000, and the events manager did not obtain CFO approval.
- The events manager stated she obtained approval from her supervisor, the chief marketing officer (CMO), but the CMO disputed that claim.
- MX later decided not to hold the conference. When Stein sought performance and payment, MX asserted the contracts were invalid because the events manager lacked authority and argued the contracts’ liquidated-damages provisions were unconscionable.
- Stein sued MX for breach of contract and sought contract-based liquidated damages tied to the timing of MX’s cancellation.
- The district court granted summary judgment to Stein, ruling the events manager had authority as a matter of law and that the liquidated-damages provisions were enforceable; it also treated MX’s effective cancellation as occurring sixty days before the event.
- MX appealed.

## Issues

1. Whether summary judgment was proper on the questions of the events manager’s authority to bind MX (actual or apparent) and whether MX later ratified the agreements.
2. Whether the contracts’ liquidated-damages provisions were unconscionable and therefore unenforceable.
3. Whether the district court correctly treated MX as not having cancelled the parties’ contractual relationship until sixty days before the event for purposes of the liquidated-damages schedule.

## Decision

- Affirmed the ruling that the liquidated-damages provisions were not unconscionable as a matter of law.
- Affirmed the district court’s implied determination that MX did not cancel any contractual relationship until sixty days before the event.
- Vacated the summary judgment ruling on authority and ratification, holding that genuine disputes of material fact required further proceedings.
- Remanded for trial-court proceedings on the disputed authority and ratification issues.

## Legal Principles

- Summary judgment is appropriate only when no genuine dispute of material fact exists and the moving party is entitled to judgment as a matter of law; on appeal, the evidence and reasonable inferences are viewed in favor of the party that lost on summary judgment.
- Actual authority depends on the principal’s manifestations to the agent; an employee’s job title and tasks may support an inference of authority, but internal approval limits and conflicting testimony can create fact questions that a judge may not resolve on summary judgment.
- Apparent authority depends on the principal’s manifestations to the third party and the third party’s reasonable reliance; internal corporate policies not communicated to the third party do not automatically defeat apparent-authority claims.
- Ratification may bind a principal to an unauthorized act if, with knowledge of material facts, the principal accepts the benefits of the transaction or otherwise signals assent; whether the principal had sufficient knowledge and whether its conduct amounted to assent can present fact questions.
- Under Utah unconscionability doctrine, a court evaluates both procedural and substantive unconscionability; a meaningful showing is required, and commercial contracts between businesses are less likely to be set aside absent extreme unfairness.
- Liquidated damages are enforceable when they are a reasonable estimate of damages at the time of contracting and actual damages would be difficult to measure; they are not enforceable if they operate as a penalty.
- Where liquidated damages vary by cancellation timing, the effective cancellation date may turn on whether communications and conduct amounted to an unambiguous termination; continued planning and mixed messages can support treating cancellation as occurring later.

## Conclusion

The Utah Court of Appeals upheld the event contracts’ liquidated-damages provisions and agreed that MX did not effectively cancel until sixty days before the conference date, but it held that disputed facts prevented summary judgment on whether MX’s events manager had authority to sign the agreements and whether MX later ratified them, requiring remand for further proceedings.


Stein Eriksen Lodge Owners Assn., Inc. v. MX Technologies Inc., 508 P.3d 138 (2022)