penalty clause

penalty clause
penalty clause n
1: a clause (as in a contract) that calls for a penalty to be paid or suffered by a party under specified terms (as in the event of a breach) and that is usu. unenforceable
◇ A penalty clause differs from a liquidated damages clause by not being tied to an estimate of possible actual damages.
2: a clause in a statute or judgment that sets forth a penalty for a specific act or omission (as failure to make a support payment on time)

Merriam-Webster’s Dictionary of Law. . 1996.

penalty clause
n.
A clause in a contract or agreement that describes a penalty for a breach, default, or other infraction, usually not enforceable by a court.

The Essential Law Dictionary. — Sphinx Publishing, An imprint of Sourcebooks, Inc. . 2008.


penalty clause
A contract clause that imposes an excessive monetary penalty in the event a party defaults. Courts generally don't enforce penalty clauses when the amount imposed is unrelated to the damages incurred.
Category: Business, LLCs & Corporations
Category: Personal Finance & Retirement
Category: Real Estate & Rental Property

Nolo’s Plain-English Law Dictionary. . 2009.


penalty clause
n. A provision in a contract that stipulates an excessive pecuniary charge against a defaulting party. Courts do not generally enforce such a clause, but will enforce liquidated damage clauses when they represent a legitimate approximation of actual damages.

Webster's New World Law Dictionary. . 2000.

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