Kay v Playup Australia Pty Ltd

(2020) 19 BPR 40; [2020] NSWCA 33

NSW Court of Appeal

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Interrogate

Catchwords

1. Contract
2. › Remedies
3. › Penalty
4. › Doctrine extends beyond payment of stipulated sum to deprivation of contractual rights
5. › Whether clause avoiding restraints and warranties upon late payment was a penalty
6. › Whether deprivation of accrued contractual rights can amount to a penalty
1. Contract
2. › Construction
3. › Interpretation
4. › Dependent and independent obligations
5. › Whether buyer's obligation to pay deferred instalments was dependent on seller's completion obligations
6. › Whether 'clear words' are required to find a relation of independency
1. Contract
2. › Construction
3. › Interpretation
4. › Distinction between 'Completion' as event and 'Completion Date' as defined date
5. › Whether parties agreed in writing to defer Completion Date
1. Equity
2. › Equitable remedies
3. › Relief against forfeiture
4. › Scope of doctrine
5. › Whether doctrine confined to proprietary or possessory rights as distinct from mere contractual rights

Quick Take

Practitioners drafting commercial agreements should note that clauses providing for the deprivation of accrued contractual rights (such as restraints and warranties) upon breach may be struck down as penalties if the consequences are out of all proportion to the legitimate interest in securing performance.