Penalties in English law
Requirement for breach

The Supreme Court's ruling in respect of the ambit of the penalty rule represents the clear contrast between Australian and UK contract law. In 2012, the High Court of Australia concluded that a provision can be a penalty even if it is not triggered by a breach of contract. The court held that in general terms,' a stipulation prima facie imposes a penalty on a party (“the first party”) if, as a matter of substance, it is collateral (or accessory) to aprimary stipulation in favour of a second party and this collateral stipulation, upon the failure of the primary stipulation, imposes upon the first party an additional detriment, the penalty, to the benefit of the second party'.: para 10 In 2014, the Federal Court of Australia clarified and constrained the limits of the "Andrew's Test", noting that the loss must be "extravagant or unconscionable" compared with the greatest calculation of the proved loss in order to trigger the doctrine.
combination:repeat_prompt, detectable_content:postscript