Kuwait Court of Cassation principle number 2422

A penalty clause or agreed compensation. It is an agreement in advance assessing the compensation due when the debtor breaches his obligation. The existence of this clause. Its effect: a presumption that the compensation assessed therein is proportionate to the damage suffered by the creditor. - A penalty clause. When the judge may not award it and when he may reduce it. - Invoking the absence of damage in order to prevent application of the penalty clause. The burden of proving it. Rests on the debtor. Mutual cancellation of the contract: