The equitable doctrine of relief against penalties: Its origins, emergence, decline and renewal

This paper examines the doctrine of relief against penalties. It asserts that the doctrine is once more flourishing, because the principles governing it have been realigned with its true rationale - preventing contractual rights from being unconscionably or oppressively used to impose a detriment on the other party. Inevitably, tension exists between the need to hold parties to their contractual undertakings and the policy in favour of intervening on a principled basis to prevent unconscionability. It is argued that during the nineteenth and twentieth centuries the imperative of enforcing promises was at the height of its prominence. This led to the decline and deterioration of the rule against penalties as an effective means of counteracting unconscionability in contracts. However, recent changes made by the High Court of Australia indicate that the doctrine is now on a surer footing, so that it can once again fulfil its intended purpose.