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upr000089 69

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upr000089-069
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    Mr W. Hi Rouse a. December 29, 1952 I am also enclosing one copy of a draft of a pro­posed agreement between tin# Union Pacific and the Las Uegas Valley Water District which will be attached as Exhibit "Bw to the proposal of the District for the pur* chase of the water production and distribution system at Las Vegas, This agreement provides for the eventual re* location or removal of certain pipe lines and power lines now located upon the property of the Union Pacific which will not be sold to the District. Borne of the existing pipe lines are so located as to interfere with the sale of our property for industrial or subdivision purposes, and the purpose of this agreement is to require the Dis* trict to remove or relocate such facilities and to give the Railroad an option to do so if the District falls to carry out its obligations. The agreement also contains a provision which is an agreement for liquidated damages if the said facilities q.t $ not fdlocEtdd of foiovod by #ith©f tbo Bistriot o t Union pacific* This provision is somewhat troublesome because of the danger that a provision for liquidated damages might be held to be unenforceable. With this thought in mind 1 have attempted to draft the liquidated damage clause so that the payments into the trust fund by the District would be held as security for actual damages which might be found to exist in the event the liquidated damage clause was held invalid* This clause has been drafted with the provisions of Sections 1670 and 1671 ©f the California Civil Code in mind, which prohibit provisions for liquidated dam­ages except in oases where it would be impracticable or extremely difficult to fix the actual damages* Of course these provisions would not govern this contract, which will undoubtedly be consummated in the State of Nevada. However in drafting the clause I have been assuming *;hat the law in Nevada is similar to that in California• I am sending a copy of this agreement to Mr. Cory with the re­quest that he advise us whether he believes the proposed liquidated damage provision is a satisfactory provision under Nevada law* I should appreciate your comments on all of the en­closures as soon as possible and assume that your com-