Law 5110 Quiz: Contract Law different cases
Document Summary
Dunlop pneumatic tyre co ltd v new garage and motor co ltd (1915) ac 79. The claimant, dunlop, manufactured tyres and distributed them to retailers for resale. The contract between dunlop and new garage contained a clause preventing new garage from selling the tyres below list price. In the event that they were in breach the contract specified that 5/. would be payable for each tyre sold below the list price. The defendants sold some tyres below the list price and the claimant brought an action for damages based on the amount specified in the contract. The defendant argued that the relevant clause was a penalty clause and thus unenforceable. The trial judge held it was a liquidated damages clause and awarded the claimant 5/. per tyre. The court of appeal reversed this holding that the clause was a penalty clause and awarded the claimant 2/. per tyre representing the actual loss suffered.
