High Court of Australia – Contract – Penalty – Agreement to purchase service station from distributor of fuel – Collateral agreement requiring fuel to be purchased exclusively from distributor – Breach of collateral agreement – Termination of collateral agreement by distributor pursuant to contractual power – Option to buy back service station exercisable by distributor on termination of collateral agreement – Whether option void and unenforceable as a penalty – Whether exercise of option oppressive or extravagant and unconscionable compared with genuine pre-estimate of damage – Relevance of proportionality to penalty questions.
GLEESON CJ, GUMMOW, KIRBY, HAYNE, CALLINAN AND HEYDON JJ. These appeals concern the effect of contracts by which each of Ringrow Pty Ltd, Ultimate Fuel Pty Ltd and Nader-One Pty Ltd bought service stations from BP Australia Pty Ltd. The identical point arises in each appeal and it is convenient to confine analysis to the first appeal.
Judges:
Lgleeson CJ, Gummow, Kirby, Hayne, Callinan, Heydon JJ
Citations:
(2005) 222 ALR 306, [2005] HCA 71, (2005) 224 CLR 656, (2005) 222 ALR 306, (2005) 80 ALJR 219
Links:
Jurisdiction:
Australia
Cited by:
Cited – Cavendish Square Holding Bv v Talal El Makdessi; ParkingEye Ltd v Beavis SC 4-Nov-2015
The court reconsidered the law relating to penalty clauses in contracts. The first appeal, Cavendish Square Holding BV v Talal El Makdessi, raised the issue in relation to two clauses in a substantial commercial contract. The second appeal, . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 09 May 2022; Ref: scu.593105
