The Metro Holding Company agrees to sell a vacant lot to New Town Property LLC. If the deal is not finished by October 15, Metro is required by the contract to pay New Town half of the agreed-upon amount. This clause is unenforceable since it contains a penalty provision.
A penalty clause is a provision in a contract that establishes disproportionately high liquidated damages as punishment for breaching the terms as opposed to an accurate prediction of the harm the violation would result in.
Make sure that the innocent party fulfills the principal responsibility in a way that is appropriate for any legitimate interests that may be present.
Check to see if there is a true estimation of
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