Castaneda v. Clydebank Engineering and Shipbuilding Co., Ltd [1904] UKHL 74 (17 November 1904)

Castaneda v. Clydebank Engineering and Shipbuilding Co., Ltd [1904] UKHL 74 (17 November 1904)

The contractual sum of £500 per week for late delivery was liquidated damages, not a penalty, as it was proportionate to the breach and not shown to be unconscionable or exorbitant; no waiver occurred as there was no evidence of intention to relinquish the right to damages.

Citation
[1904] UKHL 74
Parties
Pursuer/respondent: Castaneda (Spanish Government); Defender/appellant: Clydebank Engineering and Shipbuilding Company, Limited
Jurisdiction
United Kingdom
Judgment Date
17 November 1904
Procedural Posture
Civil Appeal (contract/damages) / Final Appeal (house of Lords)
Outcome
Appeal dismissed; interlocutors affirmed.
Legal Topics
Liquidated Damages, Penalty Clauses, Breach of Contract, Waiver of Rights
Contract Law Commercial Law Liquidated Damages Penalty Clauses Breach of Contract Waiver of Rights

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Parties

Castaneda (Spanish Government)

Pursuer/respondent

Clydebank Engineering and Shipbuilding Company, Limited

Defender/appellant

Procedural Posture

Civil Appeal (contract/damages) / Final Appeal (house of Lords)

Legal Issues

  1. 1 Whether the contractual sum of £500 per week for late delivery was a penalty or liquidated damages
  2. 2 Whether acceptance of late delivery and payment without reservation constituted waiver of the right to damages

Ratio Decidendi

The contractual sum of £500 per week for late delivery was liquidated damages, not a penalty, as it was proportionate to the breach and not shown to be unconscionable or exorbitant; no waiver occurred as there was no evidence of intention to relinquish the right to damages.

Court Disposition

Appeal dismissed; interlocutors affirmed.

Orders

  • Appellants to pay respondents the contractual sum of £500 per week for each vessel for the period of late delivery.
  • Appellants to pay costs.