Write a report explaining why these key clauses are important Explain the legal implications with reference to case law and statute.

The rate of the default interest must be justifiable as a reasonable amount or it will considered as a penalty and won’t be applicable and not only to discourage default. The court’s way on deciding if a term is considered penal is to enforce the clause “if it does not exceed a genuine attempt to estimate in advance the loss which the claimant would be likely to suffer from a breach of the obligation in question”.