Dunlop v New Garage [1915]

Lord Dunedin:
1.  Clause is penalty
clause where sum stipulated is extravagant and unconscionable in comparison
with greatest loss that could conceivably be proved to have followed from
breach.
2.  Clause is penalty
clause where breach consists only in failure to pay sum of money, and sum
stipulated is greater than that which ought to have been paid.
3.  Presumption
that clause is penalty clause when a single lump sum is made payable on
occurrence of one or more events, some of which may occasion serious damage,
other trifling.
4.  No obstacle
to sum being genuine pre-estimate of damage that consequences of breach are
such as to make precise pre-estimates almost impossible.