The relevance of breach to the applicability of the rule against penalties

In Andrews v ANZ, the High Court of Australia held that the rule against contractual penalties can apply even though the event triggering the alleged penalty is not a breach of contract. This differs from the law in all jurisdictions of the United Kingdom and from the previous understanding of Australian law. This article investigates how the restriction of the scope of the rule against penalties to instances of breach operates in various situations, and discusses possible alternatives to that restriction.