Mark Lucas reviews some recent developments in relation to the law on penalties, the interpretation of contracts, and implied terms
Rarely do the courts produce a seismic shift in the laws relating to commercial contracts - more often the law develops gradually. The following recent cases from 2016 are good examples of small tremors in the wake of tectonic shifts on three issues affecting commercial contracts.
The change to our understanding of the enforceability of penalty clauses in Cavendish Square Holding BV v Talal El Makdessi; ParkingEye Limited v Beavis  UKSC 67 was certainly a major tremor.
In Cavendish Square, the Supreme Court instituted a new standard to establish whether penalties are unenforceable. This replaced Lord Dunedin's tests in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor C...