Penalty clause

Law - contract - breach of contract - remedies.

1.

Defined strictly, a penalty clause is a clause in a contract that specifies an amount payable in the event of a breach of the contract, that is not a genuine estimate of the likely loss.

Penalty clauses are usually unenforceable in law.

2.

Loosely, a liquidated damages clause.

See also

• Breach
• Contract
• Default surcharge
• Liquidated damages
• Payables management
• Penalty
• Remedy
• Time deposit account