Dunlop Test In Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79, Lord Dunedin established several tests to distinguish a lump sum damages clause from a penalty clause. For example, if the prescribed amount is extravagant and ruthless in relation to the greatest proven loss of the offence, it is rather a penalty. Louise, the owner, went to inspect Tim`s rental. She had given him the right resignation and had given him an appointment there. Unfortunately, Tim was called to work and failed. To cover wear and tear, your rental agreement should contain a similar clause: as we explained in an earlier article “Ask TDS”, deposit guarantee services must protect the tenant`s deposit and the landlord`s investment. The starting point for this protection is the lease.. . . .

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