Recent court decisions apply the received understanding among lawyers and historians of the origins and development of the penalty doctrine in contract law. This is that the doctrine first developed in the Court of Chancery, applying equitable principles, in the sixteenth and seventeenth centuries; and that the relief was found so useful and became so routine that the common courts began to follow the practice in equity by the late seventeenth century. Thereafter, the common law subsumed the field. This chapter shows otherwise. Based on a fuller study than before of the printed and manuscript source material, it is shown that the common law courts never developed a lasting doctrine against penalties as such. Rather, they gained statutory powers to grant relief equivalent to that available in equity courts. No judge-made common law doctrine of relief from penalties survives today, and this is no need for concern. Despite their false portrayal as uncertain and constantly changing, the doctrines of equity are stable, well-known and well-attuned to application by courts in modern conditions.