Jessel MR said: ‘You may depart from the literal meaning of words, if reading the words literally leads to an absurdity.’ and ‘It has always appeared to me that the doctrine of the English law as to non-payment of money – the general rule being that you cannot recover damages because it is not paid by a certain day, is not quite consistent with reason. A man may be utterly ruined by the non-payment of a sum of money on a given day, the damages may be enormous, and the other party may be wealthy.’
He dealt with the question of whether a sum of money was a penalty or liquidated damages, saying: ‘I now come to the last class of cases. There is a class of cases relating to deposits. Where a deposit is to be forfeited for the breach of a number of stipulations, some of which may be trifling, some of which may be for the payment of money on a given day, in all those cases the Judges have held that this rule does not apply, and that the bargain of the parties is to be carried out. I think that exhausts the substance of the cases.’ However, he also observed that ‘The ground of that doctrine I do not know’
Sir George Jessel MR
(1882) 21 Ch D 243
England and Wales
Cited by:
Cited – Dunlop Pneumatic Tyre Company Ltd v New Garage and Motor Company Ltd HL 1-Jul-1914
The appellants contracted through an agent to supply tyres. The respondents contracted not to do certain things, and in case of breach concluded: ‘We agree to pay to the Dunlop Pneumatic Tyre Company, Ltd. the sum of 5 l. for each and every tyre, . .
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, Damages
Leading Case
Updated: 09 November 2021; Ref: scu.440840