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LSDefine

Simple English definitions for legal terms

penalty clause

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A quick definition of penalty clause:

A penalty clause is a part of a contract that says if someone breaks the contract, they have to pay a lot of money that is not fair. It's like a punishment instead of a reasonable amount of money for the harm caused by breaking the contract. Penalty clauses are not allowed because they are too harsh. For example, if someone rents an apartment and the contract says they have to pay $750 a day if they stay longer than they are supposed to, that is not fair and is a penalty clause. The law says that contracts can have a fair amount of money that someone has to pay if they break the contract, but not too much.

A more thorough explanation:

A penalty clause is a part of a contract that imposes damages that are unreasonably high and represent a punishment for breach, rather than a reasonable forecast of damages for the harm that is caused by the breach. These clauses allow parties to agree to their respective damages liability if they later breach. However, courts do not enforce penalty clauses.

For example, if a landlord leases an apartment to a tenant for $1000 a month and the lease provides that if a tenant holds over, the tenant must pay $750 per day, then this would be considered a penalty clause and be invalid because the damages for holding over are excessive.

Another example could be a contract between a company and a vendor. The contract states that if the vendor is late in delivering the goods, they must pay the company $10,000 per day. This would also be considered a penalty clause and be invalid because the damages are excessive and do not represent a reasonable forecast of damages for the harm caused by the breach.

These examples illustrate how penalty clauses are unenforceable because they do not represent a reasonable forecast of damages for the harm caused by the breach. Instead, they are seen as a punishment for breaching the contract.

penalty | pendent jurisdiction

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General

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[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
WorthlessAttractiveZombie
7:44
My berkeley paragraph finally disappeared. I definitely think it is just an indicator that they are actively reviewing files, and does not mean anything about A, WL, or Rs
WorthlessAttractiveZombie
7:46
Also has anyone's date disappeared for W&L? Mine did last night
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