penalty clauses


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penalty clauses

clauses that impose a liability more extensive than general damages. They are contrary to public policy and accordingly unenforceable. However, the courts will allow parties to agree the amount of damages in advance by way of what is called a liquidate damages provision. These often look the same, and the result may be little different. It has been said that the factors in determining what is allowed and what is not are as follows:
  1. (i) the difficulty of calculating the actual loss on breach;
  2. (ii) the reasonableness of the stipulated sum;
  3. (iii) a clause will be presumed penal if it makes the same sum payable for breaches of differing severity;
  4. (iv) a clause will be penal if the principal obligation is to pay money and the stipulated sum is larger.
References in periodicals archive ?
unconscionable" penalty clauses will be struck down.
I'm told the reason for not putting exorbitant penalty clauses in is they'll just put the cost of the contract up.
The interest rate would be 8% (the prime rate at that time) with no prepayment penalty clause.
The key is to make the amount of damages a reasonable amount so that the court will not consider the provision a penalty clause.
make sure your contract has stringent penalty clauses for failure to perform.
And while the Los Angeles Unified School District's business czar said little can be done about past problems, he wants to ensure future, contracts include financial penalty clauses for such foul-ups.
Consumers need to be certain of the length of time that a new price will remain in effect, the details of any contract including termination and penalty clauses, as well as the ability of the supplier to pass through additional costs" said Mr.
Getting rid of the plane will, however, prove difficult as it is presently locked into a five-year long lease clad with penalty clauses which are triggered in the event of early termination or breach of contract.
Huyssteen and Maxwell analyze the law of contracts in South Africa, including such matters as the definition and classification of contracts, contractual liability, relation to the law of property, good faith, burden of proof, defects, penalty clauses, arbitration clauses, remedies in case of non-performance, damages, and power of attorney.
If I had confirmed a booking and then cancelled, I would probably have been subject to penalty clauses.
This has triggered penalty clauses in the DB Regio contract and transport authority members want to keep an eye on how well the situation is being addressed.
Until you are actually in charge of the ship you cannot actually see what the penalty clauses are and what contracts have been signed up to.