This book is only available in PDF format
Author: Paul David KC
Published: 29 June 2016
Pages: 24

Introduction

The aim of this paper is to outline the law on penalties in contract law, consider recent changes in the law and provide some practical comment on the effect of those changes. At the time of the Contract Law seminar in November 2015, the UK Supreme Court had just handed down its judgments on the appeals in Makdessi v Cavendish Square Holdings BV (“Makdessi”) and Parking Eye Ltd v Beavis ( “Parking Eye”).¹ The judgments reviewed the doctrine of penalties at common law and reformulated the approach to the question whether a provision in a contract should be set aside on the grounds that it is penal. As New Zealand law has been based on the House of Lords case which was reconsidered by the UK Supreme Court – Dunlop Pneumatic Tyre Company Ltd v New Garage and Motor Company Limited² - the reformulation of the principles is of obvious importance and interest.

(continued...)

____________________
1 [2015] UKSC 67. The oral presentation at the seminars covered the Supreme Court judgments but the written material had been finalised before the judgments were given.
2 [1914] UKHL 1.
 

Content outline

• The Dunlop case
• UK Supreme Court – Parking Eye and Makdessi
  • Parking Eye Ltd v Beavis
  • Makdessi v Cavendish Square Holdings BV
  • The cases in the Supreme Court
• The new UK test in Parking Eye/Makdessi
  • Lord Neuberger and Lord Sumption
  • Lord Mance and Lord Hodge
• Summary of position in English law
• Areas of uncertainty