Cases - Clydebank Engineering and Shipbuilding Company Ltd v Don Jose Ramos Yzquierdo y Castenada
Record details
- Name
- Clydebank Engineering and Shipbuilding Company Ltd v Don Jose Ramos Yzquierdo y Castenada
- Date
- (1905)
- Citation
- AC 6, 11
- Legislation
- Keywords
- Construction contracts - liquidated damages - time limit for late delivery - waiver - whether penalty or liquidated damages clause - whether payment of full price constitutes waiver
- Summary
-
This case concerned the construction of 4 torpedo vessels for the Spanish Government. Late delivery was to be penalised under the contract at a rate of £500 per week. Lord Halsbury held that it was:
'obvious on the face of the contract that the very thing intended to be provided against by this pactional amount of damages is to avoid kind of minute and somewhat difficult and complex system of examination that would be necessary if you were to attempt to prove the damage'.
The Spanish government, the underlying contract contained a provision that was described as a 'penalty' clause for non-completion to time. The House of Lords upheld the provision on the basis that is was a genuine LAD clause. Though the parties to a contract who use the word 'penalty' or 'liquidated damages' may prima facie be supposed to mean what they say, the expression used is not conclusive.
The employer, having paid the full contract price to the contractor, was held not to have waived his right to recover liquidated damages.