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? 



Why are unlikely hypothetical breaches overlooked, because most clauses operate punitively?