A Supreme Court case has judged on a penalty for breach of covenant in a multi million pound company sale, and on an £85 parking fine. It concluded that both are enforceable, as they don't impose a detriment "out of all proportion to any legitimate interest of the innocent party." So don't assume that just because a penalty of this type is more than the actual loss suffered, it won't be enforceable. And this can effect huge deals and the man in the street too!
In the first review of penalty clauses since 1914 the Supreme Court, today, was asked to decide whether or not a parking charge of £85.00 was enforceable. The Court decided that the question of whether or not a contractual clause is a penalty should not by itself be determinative when considering the question of enforceability. Instead, it is one of a number of questions to be asked.