Effect of a liquidated damages clause in a sale contract (Roman-Dutch law)


Abdul Cader Abdeen v Abdul Careem Mohamed Thaheer ([1958] 2 W.L.R. 350, PC) was an appeal to the Privy Council from the Supreme Court of Ceylon (Sri Lanka). It concerned an agreement to sell land. The agreement was governed by Sri Lanka’s Roman-Dutch law. Under this system of law there is a legal right to demand specific performance (that is, specific performance is the legal default and not the result of an equitable discretion). The contract provided for the sale of land and for the payment of liquidated damages in default. The sellers refused to proceed and the buyer sought specific performance. This was refused. On its proper interpretation, the contract gave the sellers two equally valid ways of performing the contract; they could either execute the conveyance or pay the liquidated damages. There was no room for specific performance of the former mode of performance; the latter was equally available to the sellers.

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