Meaning & use
penalty clause
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Meanings
nouncountablelegalbusiness
A part of a contract that says what one side must pay or lose if they break the agreement.
Grammar: Countable; use a/an or the before it, and add -s for plural: penalty clauses.
Patterns
- include a penalty clause
- a penalty clause in a contract
- under the penalty clause
The building contract includes a penalty clause if the work finishes late.
She checked the penalty clause carefully before signing the loan agreement.
Under the penalty clause, the supplier must pay $500 for every day of delay.
nouncountablesportformal
A rule in a sports or competition agreement that punishes a team or player for breaking the rules.
Grammar: Countable; often used in formal rules or official documents.
Patterns
- a penalty clause in the rules
- apply the penalty clause
The league's penalty clause fines clubs that field ineligible players.
The tournament rules contain a penalty clause for late withdrawals.
Word forms
| plural | penalty clauses |
|---|
Common combinations
- include a penalty clause
- Most commercial leases include a penalty clause for early termination.
- breach a penalty clause
- If you breach a penalty clause, you may have to pay damages.
- enforce a penalty clause
- The court refused to enforce the penalty clause because it was too harsh.
- a penalty clause in a contract
- There is a penalty clause in the contract that covers missed deadlines.
Synonyms and how they differ
- liquidated damages clause
- A more technical legal term for a clause that sets a fixed sum for a breach; a penalty clause is often unenforceable, while a liquidated damages clause may be allowed.
- fine print
- Informal and broader; it means any small, important details in a contract, not specifically a penalty rule.
Word family
Commonly confused: penalty clause or penalty kick?
penalty clause vs penalty kick
In sports, a penalty kick is a free shot at goal; a penalty clause is a written contract rule, not a play.
Practice
The contract says the builder must pay $200 for every week the project is late. This is an example of a ______.
Choose one answer.
'Penalty clause' fits because it is a part of a contract that sets a payment for breaking the agreement. 'Penalty kick' is a sports action, 'penal code' is a set of criminal laws, and 'penalty box' is a place in ice hockey.
Make it your own
Write a sentence using “penalty clause”, then check it and compare it with the examples above.