The Avon Company v. Fareva Morton Grove
The Avon Company, f/k/a New Avon LLC, and LG H&H Company, Ltd. v. Fareva Morton Grove, Inc. and Fareva S.A.
- Alvin Hellerstein
- 1:22-cv-04724
- U.S. District Court · Southern District of New York
- 2
In The Avon Company v. Fareva Morton Grove, Judge Hellerstein held Fareva must prove the liquidated-damages provisions are unenforceable.
The ruling affects The Avon Company, LG H&H Company, Ltd., Fareva Morton Grove, Inc., and Fareva S.A. by assigning Fareva the burden of proving that the two liquidated-damages provisions are unenforceable.
What happened
The Avon Company, LG H&H Company, Ltd., and Fareva disputed which side had to prove whether two liquidated-damages provisions in their Manufacturing and Supply Agreement could be enforced.
Fareva argued that Avon had to carry that burden, relying on New York Uniform Commercial Code annotations and an older New York City case. The court rejected that argument.
Judge Hellerstein ruled that Fareva, which sought to avoid paying the agreed liquidated damages, bears the burden of proving that the provisions are unenforceable. The ruling decided only who must provide that proof, not whether the provisions are ultimately enforceable.
The detailed version
- The Avon Company v. Fareva Morton Grove · No. 1:22-cv-04724
- Alvin Hellerstein
- Oct. 28, 2025
Issue
The parties asked the court to decide which side bears the burden of proof regarding the enforceability of two liquidated-damages provisions in their long-term Manufacturing and Supply Agreement.
Ruling
The court held that Fareva bears the burden of proving that the liquidated-damages provisions are unenforceable. The court described Fareva as the party seeking to avoid paying provisions to which it had previously agreed.
Reasoning
Fareva argued that Avon should bear the burden, citing annotations to New York Uniform Commercial Code § 2-718(1) and a 1956 New York City municipal court decision. The court rejected that position, explaining that those authorities did not override decisions from New York's highest court holding that a party seeking to avoid liability for liquidated damages bears the burden.
The court also stated that contracts governed by the New York Uniform Commercial Code should be interpreted using common-law principles when those principles do not conflict with the Code. It further noted that courts in other states applying the Uniform Commercial Code likewise place the burden on the party seeking to avoid liquidated damages.
Effect of the Order
Fareva must prove the invalidity or unenforceability of the liquidated-damages provisions. The opinion does not decide whether those provisions are ultimately enforceable or whether liquidated damages are owed.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.