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ARTICLE · 04 OCTOBER 2016

Penalties in commercial contracts

Swaab Attorneys
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We discuss whether certain clauses commonly found in ordinary commercial contracts could be considered to be penalties.

AustraliaCorporate/Commercial Law
Natalie Miccoli (Formerly With Swaab Attorneys)
Natalie Miccoli (Formerly With Swaab Attorneys)
Swaab Author
Swaab Author
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IN BRIEF

In our previous issue, we examined the general law of penalties in contracts, particularly in light of the recent High Court decision, which held that credit card late payment fees charged by ANZ were not penalties.1 The significance of a clause being regarded as a penalty is that it is not enforceable. If you missed last month's issue, you can find our previous article here.

In this month's issue, we discuss whether clauses which are commonly found in ordinary commercial contracts, such as shareholder and joint venture agreements, could be considered to be penalties even where they do not require one party to make a financial payment to another, and what this could mean for you if you are considering entering into such contracts.

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