Penalty clauses — how to spot them and how to avoid them

When entering into corporate and commercial contracts, it is common to structure the deal so that if there is a breach it can be compensated without having to bring court proceedings. This can be achieved by mechanisms such as forfeiture clauses, put and call arrangements and compulsory buy-back provisions. However, as highlighted by a recent High Court decision, any party hoping to rely on such provisions will need to ensure that they do not constitute unenforceable penalties. We look at the practical points to consider arising from the case.

Click on the link above to download the briefing.

Analysis from The Lawyer

  • Simon Callander

    Keeping in step with regulation

    The culture of compliance that pervaded regulation in the past is giving way to a fresh principles-based approach 

  • head1

    LPOver and out?

    The trend for unbundling legal work is advancing through the law firm ranks but there is still resistance in some quarters - namely in-house. We asked why

View more analysis from The Lawyer

Overview

90 High Holborn
London
WC1V 6XX
UK

Turnover (£m): 111.30
No. of Lawyers: 322