ISSUE:
Whether the money deposited by the plaintiff as a way of security be forfeited by the defendants as a way of penalty?
RULE:
The expression "whether or not actual damage or loss is proved to have been caused thereby " in s. 74 is intended to cover different classes of contracts which come before the courts:
In case of breach of contracts, it may be impossible for the court to assess compensation arising from breach, while in other cases, compensation can be calculated in accordance with established rules.
Where the court is unable to assess the compensation, the sum named by the parties, if it be regarded as a genuine preestimate, may be taken into consideration as the measure of reasonable compensation, but not if the sum named is in the nature of a penalty.