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Penalty Doctrine Considered by High Court of Australia after
9 August 2016
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Australia’s highest court has considered an alleged penalty clause and has taken an approach largely consistent with last year’s UK Supreme Court decision in
The judgment confirms, however, that while the penalty doctrine only applies to secondary obligations under English law, Australian law allows a broader range of clauses to be considered penalties in appropriate circumstances.
The general commitment of common law jurisdictions to freedom of contract and upholding parties’ bargains remains a key theme of the judgments in both England and Australia.
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