Kuwait Court of Cassation principle number 1718

The contracting parties may agree in advance on the amount of agreed compensation upon either party's breach of his obligation. Their agreement to this. Its necessary consequence is that the judge may not increase it even if it is established that the value of the damage suffered by the creditor exceeds the penalty clause. The exception. The two cases of fraud or gross fault. The reason for this. Agreement on compensation in advance includes an agreement on exemption from liability. - The penalty clause. When the judge may not award it and when he may reduce it. - Agreement on a penalty clause. When it is merely a rebuttable legal presumption of the occurrence of damage. - 336 - Obligation