Contract

Authority established that, in a case where there was a range of possible loss attributable to the breach or breaches upon which a liquidated sum became payable under a contractual clause, the following guidelines were relevant for determining whether the clause was a genuine pre-estimate: (i) a sum would be penal if it was extravagant in amount in comparison with the maximum conceivable loss for the breach; (ii) a sum payable on the happening or non-happening of a particular event was not to be presumed to be penal simply because the fact that the event did or did not occur was the result of several breaches of varying severity; (iii) a sum payable in respect of different breaches of the same stipulation was not to be presumed to be penal because the effect of the breach might vary; (iv) the same applied in respect of breaches of different stipulations if the damage likely to arise from those breaches was the same in kind; (v) however, the presumption might arise