Contract Law - Seminar 23 Mitigation, Specific Performance, Injunction/Restitution and Unjust Enrichment Cunnington R, 'Changing Conceptions of Compensation' [2007] 66(3) CLJ 507-10 · Courts increasingly willing to construe compensation as incorporating both loss- based and gain-based awards · WWF v Word Wrestling Federation Entertainment Inc o Fund should have raised its claim under Wrotham Park damages in October 2001 and failure to do so established that it had decided not to make such a claim Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79 · D brought tyres from C and agreed not to Tamper with the manufacturer's marks o Sell below the list price o Sell to any person blacklisted by C o Exhibit or export tyres without C's consent . D agreed to pay £5 for every tyre he sold or offered in breach of the agreement · In breach, D sold to public below list prices · Held the provision for £5 payment wasn't penal . Looking at character of transaction - clear the provision was to prevent a price wat and protect C's sales · Clause was an attempt to estimate damage at a certain figure and as figure wasn't extravagant, was only seen as a bargain to assess damages and not a penalty clause · Laid down 3 rules concerning penalty clauses o The use of the words 'penalty' or 'liquidated damages' may prima facie be supposed to mean what they say, expression used is not conclusive o The essence of a penalty is payment of money as in terrorem of the offending party; the essence of liquidated damages is a genuine covenanted pre- estimate of damages o Whether a sum is stipulated is penalty of liquidated damages is a question of construction to be decided upon the terms and inherent circumstances of each particular contract at the time of making it " It will be held to be a penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison to the greatest loss that could conceivably be proved to have followed from the breach " It will be held to be a penalty if the breach consists only in not paying a sum of paying and the sum stipulate is a sum greater than the sum which ought to have been paid Cavendish Square Holdings BV v Makdessi [2015] UKSC 67 . Involved the sale of a controlling interest in a marketing company where D agreed to sell his stake to C . D agreed to pay $147 million in instalments and he wouldn't compete with his old business and if he did, he would be owed no more instalments and C would be able to purchase the remaining shares
. D breached the non-compete and C sought a judgment that he wasn't entitled to further payments and he should be able to purchase shares back as agreed · Trial judge found clause could be enforced . CofA reversed the decision on basis that