Foreign contractors and subcontractors doing business with Korean companies are often puzzled by how Korean courts deal with liquidated damages and penalty clauses in contracts. It is a generally accepted principle in many jurisdictions that unreasonably high liquidated damages intended as a punishment for non-performance are unenforceable. In these countries, liquidated damages are upheld when the actual damages resulting from a breach are difficult for the parties to estimate or difficult for the non-breaching party to prove, and the sum agreed to by the parties is reasonably connected to the harm suffered by the non-breaching party. In such jurisdictions, courts typically do not enforce penalty clauses as unconscionable or in violation of public policy. That is not to be expected of Korean courts