Academic query

English law allows the parties to agree with the proportion of benefits that may accrue to either party, allowing the parties much greater flexibility of arrangements than under many civil codes. As a common law system, judges decide what the law is when there is no other authoritative statement of the law.

As per your concerns!
The Indian Contract Act provides for liquidated damages and other penalties to the party that suffers from breach of a contract. However, English law recognises contracts without consideration in some cases.
Section 73 of the Indian Contract Act, 1872 provides that compensation for loss or damage caused by a breach of contract is not to be given for any remote and indirect loss or damage sustained because of the breach.

But under English law, in the case of Hadley vs. Baxendale, loss which does not arise naturally from the breach but which must still have been within the reasonable contemplation of the parties when the contract was made – as 'indirect loss'

But under Indian law, it is better not to use that expression to avoid classifying the loss as an irrecoverable loss under Section 73 unless that is positively what is intended.

Indian law does not draw a distinction as English law between a valid liquidated damages provision and an invalid penalty clause. Indeed, Section 74 of the Indian Contract Act, 1872 refers to both "a sum named in the contract as the amount to be paid in case of such breach", and "any other stipulation by way of penalty" and says that they are both to be treated in the same way, the exercise in each case being to determine the reasonable compensation entitlement.

Whereas, under English law, of course, would have to avoid any use of the expression 'penalty clause' in our drafting for fear of invalidity.

Hope it helps
Regards
Minakshi Bindhani