Contractual Penalty
An agreed penalty payment for a breach of contract, which must be reasonable.
A contractual penalty is an amount agreed in advance that becomes due upon a particular breach. A court can reduce unreasonably high contractual penalties. In general terms and conditions toward consumers, many contractual penalty clauses are invalid.
The relevant statutes
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General explanation for self-help, not legal advice (RDG). Individual cases may differ: if in doubt, contact a consumer advice center or a lawyer.