Liquidated damages or contractual penalty? Thread poster: Hlaskover
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Hlaskover
Local time: 18:31
English to Polish
Hello everyone, I have a question about one legal term.
So let's say you're a service provider, I'm your client. And we conclude a contract, so that you provide and I pay. But just in case you stopped providing, I want to include a clause saying that if you don't provide your services for a week or more, you'll have to pay me 1 million bucks of...
Is it 'liquidated damages' or 'contractual penalty'? How do you call it in your legal system or alternatively, how do you t... See more Hello everyone, I have a question about one legal term.
So let's say you're a service provider, I'm your client. And we conclude a contract, so that you provide and I pay. But just in case you stopped providing, I want to include a clause saying that if you don't provide your services for a week or more, you'll have to pay me 1 million bucks of...
Is it 'liquidated damages' or 'contractual penalty'? How do you call it in your legal system or alternatively, how do you translate it into English in your country?
As far as Polish translators go, both versions get heavy support.
Is there a difference between the common law (Anglo-Saxon) and civil law?
If you go for one option, is there any situation you would accept the other (or both)?
Thanks in advance. ▲ Collapse
| | | | | liquidated damages | Mar 11, 2013 |
In English law (England and Wales) there is on my understanding a preference for using the term liquidated damages as these clauses will, if properly drafted, be enforceable.
See this Eve... See more In English law (England and Wales) there is on my understanding a preference for using the term liquidated damages as these clauses will, if properly drafted, be enforceable.
See this Eversheds article
http://www.eversheds.com/global/en/what/articles/index.page?ArticleID=en/Industrial_engineering/Developments_in_the_law_relating_to_penalty
English law generally does not like penalty clauses (especially where the penalty exceeds what would be recoverable in damages).
As an English lawyer is more likely to be used to seeing the term "liquidated damages" in a contract, this is the term I would tend to use when translating into English.
HTH Paul ▲ Collapse
| | | | Phil Hand 
China
Local time: 00:31
Chinese to English
| Liquidated damages, but... | Mar 11, 2013 |
Liquidated damages is certainly the term I hear lawyers using when they talk about this concept. However, I've never actually seen the term written into a contract. Googling now, of course, I can find loads of examples, but in the contracts I've seen in the course of my work, I haven't come across the phrase. The relevant clauses just say: in the event that Party A fails to xyz, Party A shall pay pqr.
| | | | Hlaskover
Local time: 18:31
English to Polish
TOPIC STARTER
Thank you both for you help! Indeed, LD seems to be the standard, it's just Polish translators of 'official' texts are fond of literal translations in place of actual equivalents, hence my confusion.
Thanks again and have a nice day!
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Tatty
Local time: 18:31
Spanish to English
+ ...
| Legal and illegal | Mar 14, 2013 |
Penalty clauses in English law are void, liquidated damages clauses aren't. Liquidated damages are a fair pre-estimate of damages in the case of breach. Your "zillion bucks" therefore would probably be classed as a penalty clause and be void. Here in Spain, though, penalty clauses are legal, but I don't know if they are subject to any conditions. I never translate a Spanish penalty clause for liquidated damages in English.
| | | | | It's important to translate penalties as penalties where there's s non-common-law choice of law | Jun 24, 2013 |
As per title. You'd basically only want 'liquidated damages' to be the translation of 'contractual penalty' if you wanted to enforce in a common-law country. Even so, the court might not be ecstatic about you calling your oh-sure-not-by-way-of-penalty damages a penalty in the other language.
Actually, liquidated damages exist in jurisdictions that enforce contractual penalties. In Poland, 'odszkodowanie umowne' is basically the same as 'kara umowna', but a court might still want to ... See more As per title. You'd basically only want 'liquidated damages' to be the translation of 'contractual penalty' if you wanted to enforce in a common-law country. Even so, the court might not be ecstatic about you calling your oh-sure-not-by-way-of-penalty damages a penalty in the other language.
Actually, liquidated damages exist in jurisdictions that enforce contractual penalties. In Poland, 'odszkodowanie umowne' is basically the same as 'kara umowna', but a court might still want to infer something from the word choice. ▲ Collapse
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