Parkingeye v beavis - Lecture notes 4 PDF

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Mr Beavis relied upon to argue that the £85 parking charge imposed upon him by ParkingEye for overstaying in a car park in a retail shopping centre in Chelmsford was a penalty – it was, he said, far too high to be a genuine pre-estimate of the loss that ParkingEye suffered as a result of his breach of contract. Both the trial judge and the Court of Appeal disagreed. The Supreme Court has now also dismissed Mr Beavis’s appeal

To summarise this, the position as to whether or not a clause in a contract is unenforceable as a penalty seems now to follow these lines: 1.

Does the clause engage the penalty rule? (Or, to put it another way, is the clause under scrutiny a genuine pre-estimate of the innocent party’s loss? If yes, then the penalty rule is not engaged; if no, then it is engaged.) So if yes… 2. Does the innocent party have a legitimate interest in charging the defaulting party a sum which extends beyond the loss the innocent party has actually suffered? (ParkingEye’s legitimate interest was deemed to be that it sells its services as the manager of car parks and meets the costs of doing so from charges for breach of the terms.) If yes, and … 3. There is some other wider commercial or socio-economic justification for the clause, then it does not contravene the penalty rule....