Penalty

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Penalty

 

in civil law, a means of ensuring performance of obligations.

The penalty is a sum of money determined by law (legal penalty) or under contract (contract penalty) which the responsible party is obligated to pay if the obligation is not carried out or is carried out improperly. A penalty is paid for violation of contract conditions regarding time, quality, and method of per formance; it is recovered regardless of whether losses actually occur or how large such losses are.

According to Soviet law, the obligation to pay a penalty is supplementary (accessory) to the primary obligation. Any agreement concerning a penalty must be concluded in written form to be effective. The size and form of the penalty are determined by the nature of the violation of the original obligation. Imposed as a fine, the penalty is a fixed sum or definite percentage of the total unfulfilled or improperly fulfilled obligation. Fines are applied for violation of contract conditions regarding such elements as product quality, completeness of deliveries, efficient use of transport, and observance of the rules of documents transfer in the course of clearing accounts. A penalty is also paid for delay in performance of an obligation, whether for delay in turning over work or for delay in payment. The amount of such a penalty equals a fixed sum or a percentage of the value of the delayed performance, increasing with the duration of the delay.

Depending on the combination of losses and penalties recovered, the following types of penalties are distinguished: an offset penalty, discharged with the recovery of losses; an exclusive penalty, the collection of which excludes recovery of losses; a contract penalty, collected together with losses; and an alternative penalty, by which the aggrieved party has the right to demand recovery of either the penalty or actual losses.

The penalty is used to strengthen plan and contract discipline. The collection of penalties by socialist organizations is therefore viewed by the law not only as a right but also as a duty to the state. Payment of a penalty does not release the responsible party from performance of the obligation itself, with the exception of cases where the plan on which an obligation between socialist organizations was based is no longer in force.

E. G. POLONSKII


Penalty

 

(Russian penia, from the Latin poena, “punishment”), under Soviet civil law, a sum of money paid for each day of delay in the performance of an obligation or the imperfect performance of an obligation by a guilty party. It is calculated as a percentage of the sum of the unfulfilled or improperly performed obligation. Payment of the penalty does not release the debtor from the fulfillment of his obligation.

References in periodicals archive ?
The new tax penalty for being uninsured known as the "shared responsibility payment" motivated many consumers to purchase insurance this year during the November 15February 15 openenrollment period via Covered California.
Some of the most commonly known percentage tax penalties include delinquency penalties, whereby taxpayers who fail to pay their taxes on time owe an additional penalty equal to up to 25% of their tax liability; (47) accuracy penalties, whereby taxpayers who underpay their taxes through various acts, such as negligence, owe an additional tax penalty equal to 20% of their tax liability; (48) and civil fraud penalties, whereby taxpayers who intentionally underpay their taxes owe an additional penalty equal to 75% of their tax liability.
This would have resulted in avoiding the tax penalty regardless of which of the two major parties to a deferred annuity died.
The incentive for manufacturers is that cars fitted with these clean new engines escape the three per cent tax penalty for company car users, who account for the lion's share of UK sales.
Another recent development affecting the gains tax is budget legislation that amends the gains tax penalty provisions, temporarily, to give the commissioner additional authority to abate the penalty.
A direct rollover to your own IRA: You can avoid current federal income taxes and a tax penalty, but your IRA may not offer some of the investment options your employer's plan did.
The Wolf Administration also announced that affected families will not face a tax penalty for 2014 or through the extended enrollment period in 2015.
The amnesty provision gives teams the one-time opportunity to release a player and avoid paying the dollar-for-dollar luxury tax penalty against his salary.
Under the new law, if a deferred compensation plan does not comply, deferred amounts will be includable in income and will be subject to a penalty of interest at the underpayment rate plus 1 percent, and an additional 20 percent tax penalty.
Additionally, TEI strongly objects to the increased rate proposed for the failure to pay estimated tax penalty.
In this regard, it should be noted that the Joint Committee on Taxation and the Treasury Department are undertaking independent studies of the entire tax penalty structure, at the request of the Congress.
As a result, the company claimed it had incurred an IRS tax penalty of $9,000.