Part III Particular Contractual Provisions, 24 Payment, Agreed Damages, and Acceleration Clauses

Subject(s):

Interpretation of contract — Contract clauses and damages — Delivery and damages — Types of damages — Modes of payment

This chapter discusses payment, liquidated damages, minimum payment, and accelerated payment clauses. It first gives a brief introduction to payment clauses and their construction, before turning to liquidated damages clauses. For the latter, the chapter introduces the clause with a set of propositions delivered during the Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd case. Next, the chapter turns to minimum payment clauses. These clauses are a feature of many hire-purchase arrangements and are subject to the new legitimate interest test. Acceleration clauses, meanwhile, are particularly common in asset finance arrangements and commercial lending. Such clauses often work in tandem with express termination clauses, and appear to have become more common in the wake of the restrictive common law approach to damages resulting from the exercise of an express termination provision.