penalty clause


Also found in: Dictionary, Legal, Financial, Wikipedia.
Related to penalty clause: Liquidated damages clause

penalty clause

A contract provision setting forth the damages a party must pay in the event of his breach. If such a clause is regarded by the court as too harsh to be regarded as a fair estimate of probable damages, it will normally be held invalid. See liquidated damages.
References in periodicals archive ?
Penalty clauses may deter members from breaking strike out of fear of the financial consequences.
expansive interpretation of the Penalty Clause, interpretations of the
This led Zamalek's officials to demand that the player be banned for signing with two clubs simultaneously and that he be fined LE 30 million, according to the penalty clause in his contract with Zamalek.
The application judge declared that the clause was not only a penalty clause but also unconscionable, and thus unenforceable on both counts.
Appeal, which concluded that it was a penalty clause.
THE rail contractor whose failure to supply engineers fuelled travel chaos over New Year, had no penalty clause in its contract, according to Network Rail.
Atletico claim the Arsenal star had agreed a deal with them that included a penalty clause of two million euros if he backed out.
The Unfair Terms in Consumer Contracts Regulations 1999 states very clearly that a disproportionate penalty clause is unfair and therefore invalid.
grounds to appeal and, on the point of the penalty clause, the Court, when
Reginald Jones-Sawyer, director of asset management for the Department of General Services, said the city has actually paid far less than $1 million in penalties - perhaps half as much - because the penalty clause did not kick in right when the lease expired.
The interest rate would be 8% (the prime rate at that time) with no prepayment penalty clause.
3 million at the Keeneland Sales in September, had to struggle on very soft ground before getting the better of Penalty Clause, after the pair had disputed the lead from over a furlong out.