‘The new UK law on penalty clauses and European private law’

“Recent decisions by the UK Supreme Court on penalty clauses are of some interest from the point of view of European private law. The decisions were in the conjoined cases of Cavendish Square Holding BV v Talal El Makdessi and ParkingEye Limited v Beavis [2015] UKSC 67. They have been admirably discussed by Martin Hogg in his Obligations blog on this website. It suffices here to say that the court disapproved of using the distinction between penalty clauses and liquidated damages clauses, incorporating a genuine pre-estimate of loss, as a determinative test, although it may still be a factor to be taken into account in applying the new tests outlined below. The court also disapproved of any test based on whether a clause was intended to operate in terrorem …” (more)

[Eric Clive, European Private Law News, 28 January]

Leave a Reply