Kuwait Court of Cassation principle number 2372

The contracting parties may agree in advance on the amount of contractual compensation upon either party's breach of his obligation. Their agreement on this. Its necessary consequence is that the judge may not increase it even if it is established that the value of the damage sustained by the creditor exceeds the - 409 - Commercial penalty clause. The exception. The two cases of fraud or gross fault. The reason therefor. An 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 constitutes merely a rebuttable legal presumption that damage has occurred.