Jeancharm Ltd (t/a Beaver International) v Barnet Football Club Ltd. [2003] EWCA Civ 58 (16 January 2003)

Jeancharm Ltd (t/a Beaver International) v Barnet Football Club Ltd. [2003] EWCA Civ 58 (16 January 2003)

The 5% per week interest clause (amounting to 260% per annum) is extravagant and unconscionable, not a genuine pre-estimate of loss, and therefore constitutes a penalty under the rule in Dunlop. It is unenforceable.

Citation
[2003] EWCA Civ 58
Parties
Claimant/respondent: Jeancharm Limited t/a Beaver International; Defendant/appellant: Barnet Football Club Limited
Jurisdiction
England and Wales
Judgment Date
16 January 2003
Procedural Posture
Civil Appeal / Appeal From Leeds County Court Decision
Outcome
Appeal allowed
Legal Topics
Penalty Clauses, Liquidated Damages, Freedom of Contract, Interest on Late Payment
Contract Law Penalty Clauses Liquidated Damages Freedom of Contract Interest on Late Payment

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 12 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Jeancharm Limited t/a Beaver International

Claimant/respondent

Barnet Football Club Limited

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From Leeds County Court Decision

Legal Issues

  1. 1 Whether the contractual clause imposing 5% per week interest for late payment is an unenforceable penalty clause under common law.

Ratio Decidendi

The 5% per week interest clause (amounting to 260% per annum) is extravagant and unconscionable, not a genuine pre-estimate of loss, and therefore constitutes a penalty under the rule in Dunlop. It is unenforceable.

Court Disposition

Appeal allowed

Orders

  • The penalty interest clause is unenforceable.
  • Barnet Football Club Limited's liability is limited to the principal sum found due, not the penal interest.