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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA LW Exams › liquidated damages and penalty clause
Hi Sir
I want to ask why there is a difference in the judgement of the two cases DUNLOP PNEUMATIC TYRE V NEW GARAGE AND MOTOR and FORD MOTOR V ARMSTRONG when in both cases there was a single amount estimated for all the breaches
but the first one is regarded as genuine preestimate whereas in second case the amount payable for different breaches is penalty and hence void?
can you please differentiate between how to gauge whether amount estimated is penalty or genuine pre estimate
Thanks
If it’s claimed to be a genuine pre-estimate, the claimant would have to show the basis of the calculation arriving at the per diem rate. In Interfoto v Stiletto the “pre-estimate arrived at a figure across the board whereas in fact the pictures were quite varied and the Court decided that this was not a genuine pre-estimate at all.