THE PENALTY CLAUSE. CONVENTIONAL WAY OF ASSESSING DAMAGES

Abstract

Penalty clause is one of the most important and frequent changes by convention of the parties of the legal status of contractual liability. The parties may agree on the amount of damages, before the damage, by a clause in the contract contents or a separate convention, in case of failure, improper performance or delayed performance of the contractual obligations by the debtor. The purpose of this research is to analyze the concept and advantages of inserting the penalty clause in contracts. Also the study aims to delimitate the penalty clause of other similar institutions.

Keywords

• penalty clause
• contract
• contractual liability
• pledge
• alternative obligation