Purchase agreements are everywhere — from vehicles and equipment to property or even digital goods. But in more complex or high-value deals, it’s not just the item that matters.
It’s what happens if someone doesn’t follow through.

That’s where penalty clauses come in — pre-agreed sums payable in case of specific breaches, like:

• Late payment of the purchase price,

• Failure to collect goods,

• Delayed handover or transfer of ownership.

The main advantage?
You don’t have to prove damage — just the breach.

But they’re only effective if done right:

• The penalty must be clearly stated and reasonable.

• It must define exactly what breach triggers it.

• You must agree on whether it’s in addition to damages, or not.

⚠️ Common pitfalls:

• No penalty clause at all — making enforcement harder.

• Excessive penalties — which courts can reduce or refuse to enforce.

• Vague language or clauses that were never signed or included properly.

Especially in high-value purchases — cars, machinery, property — a well-written penalty clause can be the difference between smooth resolution and costly litigation.

Need help adding, adjusting or enforcing such a clause? I’ll make sure your contract works for you — not against you.