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1 The Historical Origins of the ‘Penalty’ Rule

From: Liquidated Damages and Penalty Clauses

Roger Halson

From: Oxford Legal Research Library (http://olrl.ouplaw.com). (c) Oxford University Press, 2015. All Rights Reserved.date: 10 August 2020

Damages and contract — Liquidated or agreed damages — Penalty clauses and damages

The penalty doctrine has recently been subject to extensive review in the highest appellate courts of the Supreme Court of the UK and the High Court of Australia. Despite the agreement between senior appellate tribunals in the two major common law jurisdictions on the importance of a historical perspective, both propose subtly different historical analyses to justify very different conclusions about the ambit of the modern common law jurisdiction to set aside so-called penalties. This disagreement makes necessary an investigation of the history of the control of penalty clauses back to its earliest origins, in order to understand the modern doctrine. This chapter discusses the early history prior to 1600, later history from 1600 to 1915, and the case of Dunlop Pneumatic Tyre Co v New Garage and Motor Co (1915).

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