[razorboy]

So the situation is I signed an employment contract with Firm A but after signing the contract, a more attractive job offer from Firm B came and I accepted the offer.

I then informed Firm A of my changed decision before the scheduled commencement date of employment and Firm A now wants me to pay half a month's salary as liquidated damages of not commencing employment based on the clause in the signed contract or legal action will be taken against me.

I researched online that the 'liquidated damages clause' stated within the contract cannot be enforced if it is in nature imposing a penalty to punish for the breach or to deter the breach of the employment contract, which I believe it is in this case since the amount of S$2,000+ is not a genuine estimate of the damages the company will have to bear as a result of my termination especially since it is before the start of my employment (the genuine amount of damages suffered by the company is the only thing enforceable in a contract).

Can anyone give advice on whether I am liable to pay the S$2,000 and if I do not, will Firm A really take legal action against me? Thanks..