The UKSC reformulated the penalty clause rule, replacing the Dunlop test with a legitimate interest test asking whether the clause is extravagant or unconscionable relative to that interest.
Contract — Breach and Remedies
Remoteness of damage in contract may depend on whether the defendant assumed responsibility for the type of loss, not merely reasonable contemplation.
Where a charterparty was repudiated, damages are assessed by reference to subsequent events that would have terminated the contract early, reducing the award accordingly.
Where cost of cure is disproportionate to benefit obtained, damages for defective performance may be limited to diminution in value or loss of amenity rather than cost of reinstatement.
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