penalty clause

noun

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 usually unenforceable

Note: 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)

Dictionary Entries Near penalty clause

Cite this Entry

“Penalty clause.” Merriam-Webster.com Legal Dictionary, Merriam-Webster, https://www.merriam-webster.com/legal/penalty%20clause. Accessed 24 Dec. 2024.

Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!