It is underlying premise of this article that, where commercial parties have freely agreed, withi... more It is underlying premise of this article that, where commercial parties have freely agreed, within a binding contract, to a regime for liquidated damages ("LDs") which is expressed in terms sufficiently certain to be enforced, the law should uphold its enforcement upon those terms. Such a notion serves a desirable commercial purpose in that it allows parties to anticipate with maximal certainty the remedial consequences where the contract is breached. It is also consistent with the underlying rationale for the enforcement of contracts which seeks to ensure that obligations are undertaken freely and, once such voluntariness is established, allows for minimal interference by the courts.
In 1915 the House of Lords delivered reasons for judgement in Dunlop Pneumatic Tyre Co Ltd. v. Ne... more In 1915 the House of Lords delivered reasons for judgement in Dunlop Pneumatic Tyre Co Ltd. v. New Garage and Motor Co. Ltd. in which it set out the applicable test and guidelines to determine whether a stipulated sum payable on breach of a contract was to be treated as liquidated damages and enforceable, or as a penalty and hence unenforceable. The test was universally applied throughout the common law world. The High Court of Australia's decision in 2012 in Andrews v. Australia and New Zealand Banking Group has recast the test. This article reviews the first instance decision of Gordon J. from the Federal Court of Australia together with the High Court decision and concludes that the latter is unsatisfactory, as it will be difficult to apply to a wide variety of commercial transactions and thereby lead to uncertainty and confusion in an area of contract law that has been trouble free for nearly a century.
This article discusses comparative observations and recent developments in the common law in the ... more This article discusses comparative observations and recent developments in the common law in the context of penalties and the Conventional Penalties Act 1962 in South Africa. The article considers the historical development of the penalty doctrine which led to the enactment of the Act. In considering the penalty stipulations in contracts the Court has a discretion to reduce such amounts to sums that are reasonable after taking into account the prejudice suffered by the non breaching party following the breach of contract. The Act differs significantly from the common law position in Australia and England and this is highlighted in a number of respects in the article.
This article considers the benefits that a liquidated damages clause can provide to contracting p... more This article considers the benefits that a liquidated damages clause can provide to contracting parties from practical, commercial and economics perspectives.It also reviews some of the case law and academic commentary that recognises these benefits.
This article supports the use of formulae to calculate liquidated damages or stipulated sums in c... more This article supports the use of formulae to calculate liquidated damages or stipulated sums in contracts that are complex or in situations where the loss and damages that contracting parties may suffer are difficult to pre-estimate. Formulae also have a beneficial role to play in the calculation of loss entitlements in a range of commercial contracts that are also reviewed in this article.
This article considers the benefits that a liquidated damages clause can provide to contracting p... more This article considers the benefits that a liquidated damages clause can provide to contracting parties from practical, commercial and economics perspectives.It also reviews some of the case law and academic commentary that recognises these benefits.
It is underlying premise of this article that, where commercial parties have freely agreed, withi... more It is underlying premise of this article that, where commercial parties have freely agreed, within a binding contract, to a regime for liquidated damages ("LDs") which is expressed in terms sufficiently certain to be enforced, the law should uphold its enforcement upon those terms. Such a notion serves a desirable commercial purpose in that it allows parties to anticipate with maximal certainty the remedial consequences where the contract is breached. It is also consistent with the underlying rationale for the enforcement of contracts which seeks to ensure that obligations are undertaken freely and, once such voluntariness is established, allows for minimal interference by the courts.
In 1915 the House of Lords delivered reasons for judgement in Dunlop Pneumatic Tyre Co Ltd. v. Ne... more In 1915 the House of Lords delivered reasons for judgement in Dunlop Pneumatic Tyre Co Ltd. v. New Garage and Motor Co. Ltd. in which it set out the applicable test and guidelines to determine whether a stipulated sum payable on breach of a contract was to be treated as liquidated damages and enforceable, or as a penalty and hence unenforceable. The test was universally applied throughout the common law world. The High Court of Australia's decision in 2012 in Andrews v. Australia and New Zealand Banking Group has recast the test. This article reviews the first instance decision of Gordon J. from the Federal Court of Australia together with the High Court decision and concludes that the latter is unsatisfactory, as it will be difficult to apply to a wide variety of commercial transactions and thereby lead to uncertainty and confusion in an area of contract law that has been trouble free for nearly a century.
This article discusses comparative observations and recent developments in the common law in the ... more This article discusses comparative observations and recent developments in the common law in the context of penalties and the Conventional Penalties Act 1962 in South Africa. The article considers the historical development of the penalty doctrine which led to the enactment of the Act. In considering the penalty stipulations in contracts the Court has a discretion to reduce such amounts to sums that are reasonable after taking into account the prejudice suffered by the non breaching party following the breach of contract. The Act differs significantly from the common law position in Australia and England and this is highlighted in a number of respects in the article.
This article considers the benefits that a liquidated damages clause can provide to contracting p... more This article considers the benefits that a liquidated damages clause can provide to contracting parties from practical, commercial and economics perspectives.It also reviews some of the case law and academic commentary that recognises these benefits.
This article supports the use of formulae to calculate liquidated damages or stipulated sums in c... more This article supports the use of formulae to calculate liquidated damages or stipulated sums in contracts that are complex or in situations where the loss and damages that contracting parties may suffer are difficult to pre-estimate. Formulae also have a beneficial role to play in the calculation of loss entitlements in a range of commercial contracts that are also reviewed in this article.
This article considers the benefits that a liquidated damages clause can provide to contracting p... more This article considers the benefits that a liquidated damages clause can provide to contracting parties from practical, commercial and economics perspectives.It also reviews some of the case law and academic commentary that recognises these benefits.
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Papers by Richard Manly