penalty clauses

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Related to Penalty clause: Liquidated damages clause

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 ?
The contract includes a penalty clause of two months' salary if terminated.
No doubt, penalty clause is there but it ought to be invoked if there was deliberate attempt on the part of Pakistan to run away from implementation.
It was reported at end of February 2018 that Iran sought $1.2 billion in damages as per the penalty clause from January 1, 2015.
Hermods' responsibility with regard to the penalty clause is now being reviewed from a legal perspective.
"A penalty clause, being liquidated damages, is ancillary to a principal obligation.
Beirut: Investigative Judge George Rizk charged Tarek Yatim with first-degree murder under Article 549 of the Lebanese penal code, sometimes known as the death penalty clause, for the stabbing death of George Al Rif over a traffic dispute on July 18, 2015.
Although there are any number of breaches that can give rise either to a penalty clause or a liquidated damages clause, the two most common categories of tenant misconduct are: when the tenant leaves too early--when the tenant abandons the tenancy; and when the tenant stays too long--when the tenant holds over after the natural conclusion of the lease.
If so, does the council have the forethought to put a penalty clause into these contracts, as a regular person would?
"The regulation would have been breached if the player had not been allowed the freedom to participate." UEFA published a statement that said if Chelsea enforced the penalty clause for the two - legged semifinal tie they would be sanctioned.
It also says Batelco reserved the bank guarantee, which was a penalty clause stipulated in the contract in the event the agreement was cancelled.
Batelco also made reservation on the bank guarantee relating to the penalty clause stipulated in the contract in case the agreement has been cancelled.
The second most important thing, regardless of whether you are or aren't dealing with a solid real estate agent and/or a solid law firm, is that when you get into such agreements, you should first make sure that both parties are subjected to a kind of penalty clause in case of not honoring the contract.