A penalty clause is a provision in a contract that specifies a monetary charge or other detriment to be imposed on a party if they fail to fulfill certain contractual obligations. It is designed to incentivize compliance and deter breaches by setting predefined consequences for non-performance or other violations.
18.7 Penalty Clause. In the event the Employee acts in violation of any of the obligations under the articles 18 through 19 of this Agreement or Article 10 of the Employment Agreement (Confidentiality), the Employee shall (upon written objective substantiation of such violation), contrary to section 7:650 paragraphs 3, 4 and 5 Dutch Civil Code, without notice of default being required, forfeit to the Employer for each such violation, a penalty in the maximum amount of EUR 10.000,00 comprising of as well as a penalty of EUR 1.000,00 for each day such violation has taken place and continues. Alternatively, the Employer will be entitled to claim full damages. Employee acknowledges that certain economic benefits beyond the severance provisions of his Employment Agreement have been provided in this Agreement (including, the acceleration of certain equity grants), and the value of such additional benefits would be included as part of any claim for full damages.
8.2 After the Termination Date the penalty clause included section 19 of the Employment agreement that corresponds with the post-contractual provisions included article 8.1 of this Agreement will remain in full force and effect.
5.2 In relation to the return of property as included in section 18 of the Employment Agreement, the corresponding penalty clause included in section 19 of the Employment Agreement remains in effect.
Ninth. Penalty clause.- If any of the parties breaches with any of the obligations under its charge, the sum of twenty million pesos (COP $ 20,000,000) must be paid to the other party as a penalty derived from the said breach.
XIV - PENALTY CLAUSE Failure to pay the rent, additional expenses and amounts due at for each term, fifteen (15) days after receipt by Lessee of a registered letter with acknowledgement of receipt remains unanswered, the case shall be transferred to a bailiff and the amounts owed automatically increased five percent (5%) as a flat-rate allowance for legal expenses, and irrespective of any formal notice and collection expenses. In the case of automatic or judicial termination, the full amount of the advance rent and the security deposit shall be acquired by Lessor for the purpose of flat-rate and irreducible compensation of the damage alone arising from this termination, without prejudice to other compensation owed or damages to compensate for the damage arising from the actions of Lessee, irrespective of whether it caused this termination. Compensation for occupation owed by Lessee if it does not vacate the premises after automatic or judicial termination or expiration of the lease shall be established as a flat rate based on the total rent for the last year of leasing increased by fifty percent (50%).
Article 12 Penalty clause If the Employee acts contrary to its obligations on account of that stated in the Articles 9 (confidentiality), including the annex and/or 10 (obligation to hand in company property) and/or 11 (ban on additional jobs) of this contract, he will, contrary to Article 7:650, paragraph 3 of the Dutch Civil Code, forfeit to the Employer, without any notice of default being required, a penalty of € 4,500.00 for each violation, and a penalty of € 450.00 for each day that the violation persists, without prejudicing the Employer's right to claim full compensation plus costs and interest instead, in so far as the damage actually suffered exceeds the stipulated penalty.
10. Penalty Clause. Failure to comply with this contract carries legal sanctions and fines. The parties agree as a pecuniary penalty to be borne by the party that breaches its obligations under this contract and in favor of the other party, the payment of TWENTY percent (20%) of the total value of the signed contract. To apply this penal clause, the non- compliant party must be required to enter to solve the non-compliance within five (5) calendar days. If, after verifying the arguments and actions carried out, it does not comply with the obligations contracted in this contract, the breach will be notified by collecting the corresponding Penal Clause.
13.0 PENALTY CLAUSE 13.1 On breach of the provisions of clauses 9 to 12 above, the employee will forfeit to the employer, on the grounds of Section 7:650(6) of the Dutch Civil Code, if necessary expressly notwithstanding Section 7:650(3) and (5) of the Dutch Civil Code, an immediately payable penalty of EUR 25,000 for each breach and a penalty of EUR 2,500 for each day on which that breach continues, notwithstanding the employer’s right to additionally demand specific performance and, at its discretion, to recover the loss actually incurred from the employee instead of the penalty. 13.2 Breach by the employee of the provisions of clauses 9 to 12 above may furthermore be urgent cause for the employer to terminate the employment contract within the meaning of Section 7:677 in conjunction with Section 7:678 of the Dutch Civil Code.
4.5. The PARTIES agree on a penalty clause in order to predetermine the extent of the compensation, at an amount of EUR 100.000 (hundred thousand), save for greater damage which EALIXIR might suffer, as a result of breach of contract and without prejudice to any further legal actions available in contract and in law.
16. Penalty clause 16.1 Should the Director fail to comply with the instructions or prohibitions set out in the provisions of this Employment Contract, he shall, without notice of default being required, forfeit a penalty to the Company amounting to three times his gross monthly salary (therefore 33.750 Euro) for each violation, as well as a penalty equal to one-fifth of his gross monthly salary (therefore 2.250 Euro) for each day that he ignores a warning to perform the relevant obligations. However, in case of a breach of Article 12 the penalty will be Euro 100.000 (hundred thousand Euro) for each violation and Euro 5.000 (five thousand Euro) for each day that the Director ignores a warning to perform the relevant obligations. The foregoing shall be without prejudice to the Company’s right to claim full compensation for the damages in lieu of the penalty and to claim fulfilment of the obligations, besides the penalty. 16.2 In deviation from the provisions set out in Article 7:650(3) of the Dutch Civil Code, the Company shall be entitled to use a penalty forfeited by the Director under the previous paragraph for its own benefit. As far as necessary the parties deviate also (further) from article 7:650 (3, 4 and 5) of the Dutch Civil Code.
3.3.- Default. Penalty clause In the event that the LESSEE does not return to the LESSOR the possession of the Leased Premises, on the Date of Completion, the LESSEE must pay the LESSOR, as a penalty clause and without the need for prior notice, an amount equivalent to three times thirty of the monthly Rent of the Leased Premises (that is, one-twelfth of the Income) (the “Daily Penalty”), for each day of such a circumstance (i) That the LESSEE did not return to the LESSOR the possession of the Leased Premises, on the Date of Completion. The Daily Penalty will be multiplied by each day of delay in returning possession to the LESSOR. (ii) That the LESSEE does not deliver the Leased Premises in their original state, completely unoccupied and free of furniture and appliances, electrical wiring, voice, data, as well as other similar or similar concepts and facilities. The Daily Penalty will be multiplied for each day they remain occupied or with furniture or facilities. For the purposes of the provisions of this Stipulation and in order to calculate the Daily Penalty, the Rent that the LESSEE was paying during the last month prior to the occurrence of any of the circumstances described will be taken into consideration. This Daily Penalty will accrue without prejudice to any legal actions, including eviction, that the LESSOR may exercise against the LESSEE, and compensation for damages that may arise for any other reason.
16 Penalty clause In the event the Employee acts in violation of any of the obligations under the articles 10 through 15 of this Agreement, the Employee shall, contrary to section 7:650 paragraphs 3, 4
19. Penalty clause 19.1. For every violation of article 11, 12, 13, 14, 15 and/or 16 of this Agreement, you shall pay to the Company (in deviation of Section 7.650 paragraph 3,4 and 5 of the Dutch Civil Code), without any demand or notice of default being required, an immediately payable penalty amounting to € 10.000 and € 1.000 for every day the violation or lasts, notwithstanding the Company’s right to enforce full payment from the Employee of all damage(s), directly or indirectly caused by the violation, instead of such a penalty and the right to demand compliance instead of this penalty or in addition to it.
Article 13 - Penalty Clause Contrary to article 7:650 paragraph 6 of the Dutch Civil Code, the Employee will, in the event of any violation of the stipulations in Articles 5.2, 6, 8, 9, 10, 11 and 12 of this Employment Agreement be accountable for an immediately payable penalty to the benefit of the Employer of Five Thousand Euros (€ 5.000) in one payment per violation, increased by an amount of One Thousand Euros (€ 1.000) for every day that the violation continues, without prejudice to the other rights of the Employer by virtue of the law or this Employment Agreement, such as the right to fulfilment of a violated stipulation or to demand an injunction or, instead of this penalty, compensation, as well as to terminate this Employment Agreement, if it is still in existence.
16 Penalty clause In the event the Employee acts in violation of any of the obligations under the articles 10 through 15 of this Agreement, the Employee shall, contrary to section 7:650 paragraphs 3, 4 and 5 Dutch Civil Code, without notice of default being required, forfeit to the Employer for each such violation, a penalty in the amount of EUR 10.000,00 as well as a penalty of EUR 1.000,00 for each day such violation has taken place and continues. Alternatively, the Employer will be entitled to claim full damages.
2 Contractual Penalty Clause If you fail to take up your employment or fail to do so on time, unjustifiably terminate the employment relationship without complying with the relevant termination notice period, or cause Adient to terminate without notice due to conduct in breach of contract you undertake to pay Adient a contractual penalty. It is agreed the contractual penalty consists of one day's gross pay for each day of the infraction, calculated based on one month's gross remuneration in accordance with Section 6, below, but in total not more than the remuneration otherwise payable during the statutory minimum termination notice period. In addition, the amount of the contractual penalty is limited to a maximum of one month's gross compensation pursuant to Section 6. Moreover, Adient may lodge a claim against you for more extensive damages that are actually suffered. The contractual penalty is to be set off against the total damages suffered.
14.2 All penalty clauses specified in this Agreement are of the nature of “Added to Fulfilment” and for whatever reason, deduction and reduction of penalty clauses and/or damages cannot be requested.
15.4. Likewise, the breach of the obligation to offer and provide the Most Favorable Price Obligation under the terms of this Clause, shall give rise to the payment of a fine or indemnity as a penalty clause in favor of CORFO, which the Parties assess in advance in the amount of 10 million Dollars. In turn, the breach of the Company’s obligation to comply with the Most Favorable Price Obligation to the Specialized Producer will give rise to the payment of a fine or indemnity as a penalty clause in favor of CORFO, which the Parties assess in advance in the amount equivalent to 3% of the amount of the breached transaction, all this, without prejudice to the liability of the Company towards the Specialized Producer. For the purposes of determining whether an obligation under this Clause has been breached, the Parties shall first resort to the mediation of the Contract Auditor, which shall be carried out within 90 days of being requested by either Party. Once the 90 days have elapsed, any of the Parties may turn to the Arbitral Tribunal. It shall be understood that the Company does not comply or partially complies with the Most Favorable Price Obligation, if at any time during the term of the agreement, it unjustifiably refuses to sell lithium products at the Preferential Price to the Specialized Producer, or unjustifiably sells to the Specialized Producer a percentage of lithium products less than that designated as subject to the Most Favorable Price Obligation. The Company shall identify and reclassify current exports of lithium products into battery grade lithium carbonate, technical grade lithium carbonate, battery grade lithium hydroxide, technical grade lithium hydroxide and other lithium products in order to facilitate the calculation of the Preferential Price. This work will be reported to the National Customs Service so that it will have specific information regarding each product category, so that, within the framework of its powers, the National Customs Service may develop proposals for improvements to the tariff classifications.
19. Penalty clause 19.1. For every violation of article 11, 12, 13, 14, 15 and/or 16 of this Agreement, you shall pay to the Company (in deviation of Section 7:650 paragraph 3,4 and 5 of the Dutch Civil Code (BW)), without any demand or notice of default being required, an immediately payable penalty amounting to € 10,000 and € 1,000 for every day the violation or lasts, notwithstanding the Company’s right to enforce full payment from the Employee of all damage(s), directly or indirectly caused by the violation, instead of such a penalty and the right to demand compliance instead of this penalty or in addition to it.
A penalty clause is a provision in a contract that imposes a financial penalty on a party if they fail to meet certain obligations or deadlines specified in the contract. This type of clause is typically designed to incentivize performance and discourage breaches or delays by attaching a monetary consequence to non-compliance. Unlike liquidated damages, which are a pre-estimate of loss agreed upon by the parties, a penalty clause is intended primarily to penalize the breaching party rather than to compensate the non-breaching party for any actual loss.
You should consider using a penalty clause in a contract when:
When writing a penalty clause, consider the following steps:
If the Contractor fails to complete the work by the agreed deadline of [Specific Date], the Contractor shall pay to the Client a penalty of $1,000 for each day of delay until the work is completed, up to a maximum of $50,000.
Penalty clauses are commonly found in the following types of contracts:
Including a penalty clause in these types of contracts helps to manage risk, establish clear expectations, and provide a structured consequence for non-performance or delays.
Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
The "Quiet Enjoyment" clause ensures that a tenant or property owner can use and enjoy the premises without interference or disturbances from the landlord or any third parties claiming superior title. This clause is essential in real estate and lease agreements, providing legal protection from unwarranted interruptions that could affect the tenant's use of the property.
The "Release of Obligations" clause frees one or both parties from certain duties or liabilities defined in the contract once specific conditions are met or after a certain event occurs. This clause ensures that obligations are concluded, allowing the parties to move forward without further responsibilities under those specific terms.
The "Removal of Personal Property" clause delineates the responsibilities and time frame within which tenants or parties must vacate and remove their belongings from a premises upon termination or expiration of a lease or agreement. Failure to comply may result in items being considered abandoned, potentially leading to their disposal or storage at the owner's expense.
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