If Shylock sought to enforce his penalty clause today, would he find vindication in the common law? One cannot help but wonder after the Supreme Court’s decision in Makdessi and Parking Eye. This article is based on Mathias Cheung’s first prize winning entry in the 2015 Hudson Prize Society of Construction Law essay competition.
This article revisits the doctrine of penalties in the construction context, by first setting out the law as conventionally understood since the seminal case of Dunlop, and then comparing it with the new approach in Makdessi. In light of the important risk allocating role of LADs in construction contracts, it is the author’s thesis that the Makdessi approach could potentially undermine certainty and efficiency, and parties should refrain from inflating the amount of LADs in the name of “legitimate business interests”.
To read the full article please click here: Shylock’s Construction Law: The brave new life of liquidated damages? (2017) 33 Const. L.J., Issue 3. This was first published in Construction Law Journal.
Mathias is happy to deliver presentations on the topic, if you are interested in receiving such please contact Matthew Ashman.