XH v T Ltd [2024] NZDT 410 (2 May 2024) [pdf, 199 KB]
...NZSC 53 (Honey Bees) the Supreme Court said that: “A clause stipulating a consequence for a breach of a term will be an unenforceable penalty if the consequence is out of all proportion to the legitimate interests of the innocent party in performance of the primary obligation” and “Determining whether or the impugned clause is an unenforceable penalty requires an objective exercise of construction, notionally undertaken at the time of the contract formation, and by refe...