chapter  2
Is mental distress a form of damage—an ‘interestprotected by the law of obligations? Or is it an interest protected only by certain causes of action? If the latter, does this mean that the notion of an ‘interest as a social concept
Pages 7

This was an action in debt brought by a finance company against a hire purchaser of a car who had written to the finance company terminating the hire-purchase contract. The company was claiming two-thirds of the hire purchase price, which the contract stipulated was to be payable if the purchaser decided to terminate the agreement. The purchaser claimed that this two-thirds clause was a penalty and thus unenforceable in equity (doctrine of relief against penalties). The Court of Appeal held that the equitable doctrine applied only to breaches of contract and thus had no application where the contract was lawfully terminated; the House of Lords, allowing an appeal, held that, on the facts of this case, the hire purchaser had been in breach of contract.