Selected Cases by Article & Issues
(1) Where the contract provides that a party who does not perform is to pay a specified sum to the aggrieved party for such non-performance, the aggrieved party is entitled to that sum irrespective of its actual harm.
(2) However, notwithstanding any agreement to the contrary the specified sum may be reduced to a reasonable amount where it is grossly excessive in relation to the harm resulting from the non-performance and to the other circumstances.
|1||Validity of agreed payment for non-performance||6|
|2||Agreed sum "grossly excessive" in relation to actual harm||3|
|2.1||Reduction of agreed sum||5|
|3||Agreed payment for non-performance and right to request performance in natura|
|4||Agreed payment for non-performance and right to claim damages for further harm||1|
|5||Agreed payment for non-performance and exemption clauses|