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Penalty Clause
(redirected from Penalty Clauses)

   Also found in: Dictionary/thesaurus, Encyclopedia 0.01 sec.
Penalty clause
A clause found in contract agreements that provides for a penalty in the event of default.

Penalty Clause
In a contract, especially a loan agreement, a clause stating that the payer must pay extra in the event of a late payment and/or default. The penalty clause states the amount of the penalty and the circumstances under which it must be paid.


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