Evaluation Of Penalty Clause Specific To Construction (Work) Agreements

In this article, we will examine the penalty clause (penalty condition), which has an important place in our law, especially in construction (work) agreements. In order to better understand our study, we present our findings and evaluations in the form of questions and answers. In our study, we will examine what exactly the penalty clause means, its legal nature, functions, types, the legal actions in which the penalty clause cannot be decided, and most importantly, whether it is legally possible to eliminate or reduce the amount of the penalty clause determined in the agreement by a judge's decision.

1. What is Penalty Clause?

First of all, to make a definition; the penalty clause is such a performance commitment that the debtor undertakes to perform an act if they do not fully and completely fulfill their principal debt to the creditor on time and on place, or the debtor gains the right to withdraw from the agreement by paying the agreed price. ¹ Penalty clause