Kuwait Court of Cassation principle number 4114

Penalty clause. Its nature. The general rule is to give effect to it as a legal undertaking having binding force. It rests on a rebuttable legal presumption of the occurrence of damage and its being forgotten in relation to the compensation agreed upon in the parties’ assessment. Its implication. The creditor is not required to prove the damage or its extent. The debtor may prove the absence of damage, in which case this compensation is not due. The judge may reduce the agreed compensation. The cases thereof.