Seller's Breach of Obligation to Obtain Authorizations and Penalty Clause Enforcement

A seller entered into a contract to deliver machinery to a buyer, with the delivery contingent upon the seller obtaining the necessary administrative authorizations, and the contract stipulated a penalty for non-performance; when the seller failed to obtain the required permits and the buyer sought enforcement of the penalty clause, the court of first instance dismissed the action, finding that the seller's inability to perform due to lack of authorization, which was a suspensive condition, excused non-performance without penalty. The high court quashed this decision, reasoning that since the seller was contractually obligated to secure the required authorizations, their failure to do so constituted a breach of contract, thereby justifying the application of the stipulated penalty clause regardless of whether the underlying authorizations were obtained.