"Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd"

"Dunlop Pneumatic Tyre Co Ltd v New Garage & Motor Co Ltd" is a significant legal case from 1907 concerning contract law. It addressed whether certain clauses in a contract, particularly concerning penalties for breach, were enforceable. The court ruled that a clause specifying a fixed sum as a penalty for breaching a contract was unenforceable. Instead, the court emphasized that damages should reflect actual losses, not serve as punishment. This case is important for defining how penalty clauses should be treated in contracts, emphasizing the need for clauses to be reasonable and related to genuine loss.