Liquidated Damages Clause Upheld Against Penalty Claim

A litigant appealed a lower court ruling which had upheld the validity of a contract provision stipulating that certain contractual obligations, in the event of non-performance, would result in a fixed, cumulative penalty for each day of delay, arguing the clause constituted an excessive and disproportionate penalty. The high court rejected the appeal, reasoning that the stipulation, as agreed upon by the parties and not manifestly disproportionate to the potential harm, was a valid liquidated damages clause intended to fix the compensation for non-performance and did not violate the law concerning penalties.