Penalty in a Contract | LegaMart

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QuestionJul 28, 2022 - 18:55

Penalty in a Contract

What is a penalty clause in a contract?


Jul 31, 2022 - 18:44

A penalty clause allows one party to penalize the other if they do not meet their obligations under the contract. The penalty includes monetary penalties or other remedies such as withholding services or terminating the contract. Penalty clauses are generally unenforceable in court but can be helpful as a bargaining tool to ensure that both parties fulfill their obligations under the contract.


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