It is undeniable the fundamental role that clauses limiting and/or excluding liability, and more particularly, clauses fixing damages, play in cross-border transactions and major international projects. The parties need to control their contractual risks, and be set free from any particularity arising from local laws and jurisprudence that may inflate the damages to pay in case of a breach of the contract. Often times these clauses play also a punitive function, giving grounds to questioning its validity in a number of jurisdictions. This article endeavours to provide a broad overview of how penalty clauses are dealt with in several jurisdictions, and how those clauses can be questioned when confronted with the principles of public policy.