[C]ourts should, whenever possible, favour analysis on the basis of equitable
principles and unconscionability over the strict common law rule pertaining
to penalty clauses.
Accordingly, he pointed out that “the strict rule of the common
law refusing to enforce penalty clauses should not be extended”
(at para. 33). The reason, he explained, is “the policy of upholding freedom of contract” (at para. 34).
 Justice Sharpe continued, noting that “[j]udicial enthusiasm for the refusal to enforce penalty clauses has waned in
the face of a rising recognition of the advantages of allowing
parties to define for themselves the consequences of breach”
(at para. 34). He cited [at para. 32] in support Dickson J., who
decried the prohibition of penalties as “blatant interference with
freedom of contract”, and advocated treating both penalties and
forfeitures under the rubric of unconscionability: Elsley Estate v.
J.G. Collins Insurance Agencies Ltd.,  2 S.C.R. 916, 
S.C.J. No. 47, at p. 937 S.C.R., 83 D.L.R. (3d) 1, 1978 CarswellOnt 1235, at para. 47 (WL Can).
 The point is well made in Union Eagle Ltd. v. Golden
Achievement Ltd.,  UKPC 5,  A.C. 514 (P.C.) by Lord
Hoffmann for the Judicial Committee of the Privy Council [who]
said, at p. 519 A.C.:
[I]n many forms of transaction it is of great importance that if something
happens for which the contract has made express provision, the parties
should know with certainty that the terms of the contract will be enforced.
The existence of an undefined discretion to refuse to enforce the contract on
the ground that this would be “unconscionable” is sufficient to create uncer-
tainty. Even if it is most unlikely that a discretion to grant relief will be
exercised, its mere existence enables litigation to be employed as a negotiat-
 I would agree that the finding of unconscionability must
be an exceptional one, strongly compelled on the facts of
 Can unconscionability be established purely on the basis
of a disproportionality between the damages suffered and the
amount forfeited? While in some circumstances a disproportionately large deposit, without more, could be found to be unconscionable, this is not such a case.
 As to quantum, Newbury J.A. quoted, at para. 24 of Tang,
the statement of the Privy Council in Workers Trust & Merchant
Bank Ltd. v. Dojap Investments Ltd.,  A.C. 573, 
2 All E.R. 370 (P.C.), at p. 578 A.C.:
In general, a contractual provision which requires one party in the event of
his breach of the contract to pay or forfeit a sum of money to the other party
is unlawful as being a penalty, unless such provision can be justified as
being a payment of liquidated damages, being a genuine pre-estimate of the