Penalty clause

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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.
References in periodicals archive ?
In Abu Dhabi Court of Cassation Commercial Appeal 790 of 2013 (dated 22 October 2014), the Abu Dhabi Court of Cassation developed this established principle further, as it held that termination does not always prevent the court from applying a liquidated damages clause or a penalty clause. The Cassation Court highlighted that as long as the liquidated damages clause or penalty clause is an independent clause which the parties have agreed will survive termination, it will be effective after the termination of the contract.
The majority of the Ontario Court of Appeal focused on whether the penalty clause was so unconscionable as to be unenforceable.
There is no need for a rule that singles out penalty clauses for special treatment.
penalty clauses, which stems from the House of Lords' decision in
I doubt it'll be pursued but the penalty clauses for breach can be anything up to two years' dough.
STIFF penalty clauses to force contractors to finish the Ricoh Arena on time were not put in place because they were too costly, it has emerged.
For years utility and cable contractors have only needed permission from local councils to dig up roads, and haven't been constrained by time limits or penalty clauses. Now the Traffic Management Bill will empower councils to fine contractors for late completion of roadworks by as much as pounds 1,000 a day.
In what has been called one of the worst business deals in the history of the country, the company agreed to penalty clauses in a 1993 contract with foreign vendors to install 1.6 million lines across the country.
The company did not give a reason for its withdrawal, although it might have been discouraged by the strict performance targets and penalty clauses set for suppliers by the UK government.
Simply call lenders and ask them directly about their prepayment penalty clauses."
The courts considered liquidated damages provisions to be penalty clauses, and for this reason did not enforce the provision.
* make sure your contract has stringent penalty clauses for failure to perform.