Therefore, the Court of Justice must consider whether a compensation clause is a punitive clause or a valid liquidation clause. This is the construction that must be decided on the intrinsic terms and circumstances of a specific contract tried at the time of the performance of the contract, not at the time of the breach. The test is objective, and the duty to show that the determination of compensation was a penalty is up to the party that is being sued against it. Leases generally have a penalty of two months` rent if they wish to terminate their lease before the expiry date. This is a “burden for tenants, often to the tune of thousands of dirhams, depending on the value of their lease,” the company said in a statement. The Supreme Court therefore found that the fact that the lessor had entered into a new lease immediately after the recovery of the property of the commercial premises and therefore had not suffered prejudice as a result of the early termination of the contract was not a circumstance that permitted a reduction of the criminal clause. Thus, the Supreme Court has fully ordered the application of the penal clause. Trial Tribunal No. 1 dismissed the appeal on the basis that the application of a sanction clause should be limited to the period during which the commercial premises were not leased, which did not happen in this case. It is customary for a commercial lease to include a provision requiring a party to pay a predetermined amount of money in the event of a delay, or a number of circumstances that can be characterized as “mistakes”. These provisions are either considered a penalty or a true estimate of damages. Under the law, punitive clauses are generally unenforceable (and therefore cannot be paid by the insulting party), while liquidated damages are enforceable if they are reasonable. For example, if the lease allows the owner to collect a modest administration fee, for example.
B $15 to cover the cost of lettering the tenant about rent arrears, this can be considered fair.