This dissertation shall discuss the validity and other issues relating to penalty rule and liquidated damages clauses in the English law and Vietnamese law. Pre-agreed provisions concerning the estimation of sum payable in event of breach are considerable practical importance. Such provision could be either penalty or liquidated damages, depending on its nature and purpose. However, under the English law, courts will not enforce these provisions when they are categorized as penalty clauses while this sanction is valid in Vietnam. The reasons for the differences between these two systems of law will be analyzed in detail through the dissertation.
This dissertation has been divided into four chapters. The first chapter examines the historical origins of penalty clause which is the key to have a full understanding about the modern concept of the penalty rule doctrine. The second chapter critically examines the reformulation of the penalty test in the Cavendish case which is currently applied to identify the validity of pre-agreed clause. Chapter three considers the legal regulations relating liquidated damages and penalty under the law of Vietnam as well as make comparisons with the English law and some Civil law countries. From the analysis and comparisons discussed in these chapters above, some proposals for the improvement of Vietnamese law would be suggested.