Common Contracts
2 similar Penalty Clauses and the Cisg contracts
Touro College Jacob D. Fuchsberg Law CenterPenalty Clauses and the Cisg • August 25th, 2017
ARTICLESPenalty Clauses and the Cisg • May 18th, 2012
Commercial agreements often provide for “fixed sums” payable upon a specified breach. Such agreements are generally enforced in civil law jurisdictions. In contrast, the common law distinguishes between “liquidated damages” and “penalty” clauses, enforcing the former, while invalidating the latter as a penalty. The UN Convention on Contracts for the International Sale of Goods (CISG) does not directly address the payment of “fixed sums” as damages, and the validity of “penalty” clauses has, traditionally, been relegated to otherwise applicable domestic national law under CISG Article
