Kelli Preston

The parties entered into commercial agreements to purchase and operate rental properties.

The respondents, passive investors, provided the appellant with promissory notes to secure their obligations.

The agreements contained a stipulated remedy clause stating that if the appellant defaulted, the promissory notes would be deemed paid.

The arbitrator found the appellant in serious default and enforced the clause, refusing relief from forfeiture.

The Superior Court dismissed the appeal.

The Court of Appeal affirmed, holding that not all stipulated remedy clauses with penal consequences are unenforceable, and the equitable doctrine of relief from forfeiture applies to enforce such clauses where it is not unconscionable to do so.