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Cavendish Square Holding BV v Talal El Makdessi [2015] UKSC 67, together with its companion case ParkingEye Ltd v Beavis, are English contract law cases concerning the validity of penalty clauses and (in relation to ParkingEye Ltd v Beavis) the application of the Unfair Terms in Consumer Contracts Directive (as implemented in the UK by, at the time, the Unfair Terms in Consumer Contracts ...
A clause which provides for a large payment in pursuant of the performance of obligations is not a penalty at law. [25] In Berg v Blackburn Rovers FC [ 26 ] it was held that where a football club exercised its right to terminate employment of a manager upon payment out of the remaining salary due under the contract, this was the performance of ...
Many clauses which are found to be penal (i.e. "penalty clauses") are expressed as liquidated damages clauses but have been seen by courts as excessive and thus invalid. [2] The judicial approach to penal damages is conceptually important as it is one of the few examples of judicial paternalism in contract law. Even if two parties genuinely and ...
For example, Article 1226 of the French Civil Code provides for clause pénale, a variant of liquidated damages which combines compensatory and coercive elements. Judges may adjust excessive contract penalties, but such clauses are not generally void as a matter of French law. [19]
A take-or-pay contract, or a take-or-pay clause within a contract, is a payment obligation agreed between a business customer and its supplier. With this kind of contract, the customer either takes the product from the supplier or pays the supplier a penalty. For any product the company takes, it agrees to pay the supplier a certain price, say ...
The Unfair Contract Terms Act 1977 regulates clauses that exclude or limit terms implied by the common law or statute. Its general pattern is that if clauses restrict liability, particularly negligence , of one party, the clause must pass the "reasonableness test" in section 11 and Schedule 2.
For example, a motorway construction contract may have an estimated finish date with a "penalty clause" for every day late; but provided that this date is realistic and the "penalty" is a reasonable approximation of loss, the clause will be valid. The validity of the clause will be advanced if there is an equivalent bonus for finishing early.
In construction law and real estate, exculpatory clauses are sometimes included in nonrecourse loans to minimize personal liability for the borrower. [5] Exculpatory clauses are also applied more generally in construction law to immunize a person from the consequences of his/her negligence, though this application is subject to stringent ...