← All Authorities
Hong Kong Leading Case cavendish testprimary vs secondary obligationliquidated damagespayment in lieu

Law Ting Pong Secondary School v Chen Wai Wah

[2021] HKCA 873
JurisdictionHong Kong
CourtCourt of Appeal of the High Court (Hong Kong)
Year2021
StatusBinding authority

Key Principle

Hong Kong adopts the modern Cavendish penalty test: a clause is penal only if it imposes a secondary obligation on breach that is out of all proportion to the innocent party's legitimate interest; primary obligations (e.g. payment in lieu of notice) do not engage the penalty rule.

Area of Law

Contract & Commercial

Related Cases

Eminent Investments (Asia Pacific) Ltd v DIO Corporation Ltd (2020) 23 HKCFAR 487; [2020] HKCFA 38
Sinoearn International Ltd v Hyundai-CCECC Joint Venture (2013) 16 HKCFAR 632
Hyundai Engineering and Construction Co Ltd v Vigour Ltd [2005] 3 HKLRD 723 (CA)

Ask CommonBench about this case

Get a detailed analysis of Law Ting Pong Secondary School v Chen Wai Wah and how it applies to your situation.

Explain Law Ting Pong Secondary School...