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ARTICLE · 19 DECEMBER 2016

Liquidated Damages Following Cavendish

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On 4 November 2015, the Supreme Court handed down judgment in joint appeals relating to Cavendish Square Holdings Ltd v Talal El Makdessi (the "Cavendish Appeal") and ParkingEye Ltd v Beavis (the "Beavis Appeal").

United KingdomReal Estate and Construction
Andrew Weston
Andrew Weston
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On 4 November 2015, the Supreme Court handed down judgment in joint appeals relating to Cavendish Square Holdings Ltd v Talal El Makdessi (the "Cavendish Appeal") and ParkingEye Ltd v Beavis (the "Beavis Appeal")1. These appeals provided the first opportunity for the Supreme Court, or the House of Lords, to consider the law concerning penalty clauses in approximately 100 years.

The two appeals related to non-construction-related disputes. The Cavendish Appeal concerned the effect of two clauses related to non-compete covenants in an agreement regarding the sale of a controlling stake in business. The Beavis Appeal concerned the enforceability of a parking fine.

As Andrew Weston sets out below, the Supreme Court judgment is relevant to construction contracts as it impacts upon the law relating to liquidated damages.

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