Contracts: agreed remedies
A Practice note that provides guidance on agreed remedies in contract law, focusing on the critical distinction between enforceable liquidated damages clauses and unenforceable penalties. This Practice note details the evolution of the rule against penalties, from the traditional "genuine pre-estimate of loss" test in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79 to the modern framework established by the Supreme Court in Cavendish Square Holding BV v El Makdessi and ParkingEye Ltd v Beavis [2015] UKSC 67. It explores what makes a provision extravagant or unconscionable. The Practice note also addresses the enforceability of deposits and advance payments, the consequences of a clause being deemed penal, and considers related provisions like default interest, indemnity, and acceleration clauses.
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