Liquidated Damages - the Effect of Contract Termination
In Triple Point Technology, Inc v. PTT Public Company Ltd [2021] UKSC 2 (16 July 2021) the UK Supreme Court provided a reminder of the effect of termination of a contract on a liquidated damages provision. If the provision is silent on the consequences of termination of the contract:
- Liquidated damages will cease to accrue on termination, but those accrued as at the date of termination will survive.
- Following termination, a claim for damages for breach of contract under general English law principles should be pursued.
The parties to a contract should therefore consider whether this is the outcome they wish to apply or whether language should be included to allow recovery of liquidated sums after termination, thus potentially avoiding the task of proving loss in a general damages claim.
Photo by Farzad Nazifi on Unsplash
If you have any questions, please contact Paul de Cordova, or your usual Jurit contact.
Paul de Cordova Consultant Solicitor - Commercial +44 (0) 20 7846 0208 paul.decordova@jurit.com
Please note this paper is intended to provide general information and knowledge about legal developments and topics which may be of interest to readers. It is not a comprehensive analysis of law nor does it provide specific legal advice. Advice on the specific circumstances of a matter should be sought.
