An acceleration clause in a settlement agreement compromising a partnership accounting claim is not a penalty, because the settlement sum represents an existing equitable debt arising from the partnership dealings, not a new obligation created by the agreement. The penalty doctrine does not apply where a pre-existing debt is ascertained and made payable by instalments with a provision for acceleration on default. Where a settlement agreement makes instalments payable on fixed days that are not the days for performance of the other party's obligations, no implied term of interdependence will be found.
The full text is available to signed-in members, including the 3 later cases that cite this judgment.