body: Poole, Shaw-Mellors. [*Contract Law Concentrate* (4 ed 2019)](https://www.amazon.co.uk/Contract-Law-Concentrate-Jill-Pool/dp/0198840446/ref=dp_ob_title_bk). p 166.
  
  
  
  > 
  > Distinguishing liquidated damages and penalty clauses
  > =====================================================
  > 
  > 
  > This is a question of construction of the contract and public policy. Traditionally reference
  >  has been made to the guidelines (a summary follows) laid down by Lord Dunedin in *Dunlop
  >  Pneumatic Tyre Co. Ltd v New Garage & Motor Co. Ltd* (1915).
  > 
  > 
  > ### Lord Dunedin’s traditional guidelines
  > 
  > 
  > • Terminology used was not conclusive, e.g. Cellulose Acetate.  
  > 
  >  • Was the clause a genuine pre-estimate of the likely loss at the time contract was
  >  made rather than in the light of the breach? The estimate did not have to be correct,
  >  i.e. it did not need to be the same as the actual loss as long as it was a genuine and sensible
  >  estimate of the likely loss resulting from that breach.  
  > 
  >  • In commercial contracts made ‘at arm’s length’ the clause was likely to have been intended
  >  by the parties as an enforceable liquidated damages clause: *Philips Hong Kong Ltd v
  >  AG of Hong Kong* (1993). **Account would not be taken of unlikely hypothetical breaches,
  >  since it would be very difficult to draft a clause that would never operate in a penal way.**
  >  The courts should uphold the parties’ agreement.
  > 
  > 
  > 
  
  
  The boldened sentence too many negators. I rewrote it —
  
  
  
  > 
  > Unlikely hypothetical breaches are overlooked, because it's difficult to draft clauses that never penalize/operate punitively.
  > 
  > 
  > ⇒ Unlikely hypothetical breaches are overlooked, because most clauses drafted would penalize. 
  > 
  > 
  > 
  
  
  I still don't understand. How does difficulty in drafting clauses that don't penalize, relate to overlooking unlikely hypothetical breaches? 
  
  
  
title: Why are unlikely hypothetical breaches overlooked, because most clauses operate punitively?