Common law enforced the bonds according to their letter. But equity regarded the real intention of the parties as being that the bond should stand as security only, and restrained its enforcement at common law on terms that the debtor paid damages, interest and costs.
Lord Thurlow LC said: ‘where a penalty is inserted merely to secure the enjoyment of a collateral object, the enjoyment of the object is considered as the principal intent of the deed, and the penalty only as accessional, and, therefore, only to secure the damage really incurred . .’
Judges:
Lord Thurlow LC
Citations:
[1783] EngR 158, (1783) 1 Bro CC 418, (1783) 28 ER 1213
Links:
Jurisdiction:
England and Wales
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.
Equity, Contract
Updated: 07 May 2022; Ref: scu.372287
