## Facts

- Vanderbilt University hired Gerry DiNardo as head football coach under a five-year employment contract emphasizing his commitment to serve the full term to maintain program stability.
- The contract included reciprocal liquidated-damages provisions: Vanderbilt would pay remaining salary if it terminated him; DiNardo would pay Vanderbilt if he left early to coach at another institution.
- If DiNardo resigned and accepted another coaching job during the contract term, liquidated damages were calculated as his net salary for the remaining time on the contract.
- Before the five-year term ended, the parties executed an addendum extending the contract for two additional years; DiNardo later asserted the addendum required his attorney’s approval as a condition to becoming effective.
- DiNardo resigned on December 12, 1994, to become LSU’s head football coach.
- Vanderbilt demanded liquidated damages for the remaining year of the original contract and for the two-year extension; after DiNardo did not pay, Vanderbilt sued for breach of contract.
- The district court granted summary judgment for Vanderbilt, enforcing the clause for both the original contract and addendum and awarding $281,886.43.

## Issues

1. Whether the contract’s stipulated-damages provision was an enforceable liquidated-damages clause or an unenforceable penalty under Tennessee law.
2. Whether Vanderbilt waived its right to enforce liquidated damages by its conduct surrounding DiNardo’s pursuit of other employment.
3. Whether the addendum extending the contract was enforceable, including whether attorney approval was a condition precedent.
4. Whether, if enforceable, the addendum’s extended term was covered by the liquidated-damages clause.

## Decision

- Affirmed enforcement of the liquidated-damages clause as applied to the remaining year of the original five-year contract.
- Held the clause was a valid liquidated-damages provision because anticipated damages from a premature coaching departure were difficult to measure and the formula was a reasonable estimate at the time of contracting.
- Rejected DiNardo’s waiver argument because the record did not show a clear, unequivocal intentional relinquishment of Vanderbilt’s contractual right to liquidated damages.
- Reversed summary judgment as to liquidated damages for the addendum period and remanded because genuine disputes of material fact existed concerning whether the addendum became effective (including alleged attorney-approval condition precedent).
- Affirmed in part, reversed in part, and remanded.

## Legal Principles

- Under Tennessee law, a stipulated-damages clause is enforceable as liquidated damages when actual damages are uncertain or difficult to ascertain at contracting and the amount is a reasonable forecast of anticipated loss rather than a punitive exaction.
- In assessing reasonableness, courts may consider that some contract harms are intangible and hard to quantify (e.g., instability, recruiting disruption, and reputational effects) and may accept a salary-based formula as a permissible estimate.
- Waiver of a contractual right requires clear evidence of an intentional relinquishment; allowing discussions or negotiations does not, without more, establish waiver.
- Summary judgment is improper when material facts are disputed regarding contract formation or effectiveness, including whether a condition precedent to an addendum’s validity was satisfied.

## Conclusion

The Sixth Circuit enforced Vanderbilt’s liquidated-damages provision for DiNardo’s departure during the original contract term but required further proceedings on whether the later addendum was effective, making liquidated damages for the extension unavailable on summary judgment.


Vanderbilt University v. DiNardo, 174 F.3d 751 (6th Cir. 1999)