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I can't believe they found a lawyer either ignorant or optimistic enough to put this in.

I sure can. My only question is: Did he bite his pinky while adding the clause and pronounce it "meeeelion"?

Its strange to think that, as a lawyer, you can write a 'program' in legalese to run on 'the legal system' and collect your pay without ever having to run it. Your client finds out later (much) if it will run or not! Wish my code worked that way.

The $2MM liquidated damages clause may indeed be a penalty, but clause would then just disappear. Either way it wouldn't affect the validity of the rest of the contract.

On top of that, it's cheaper to fight it in court than to settle! :)