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A penal bond is a written instrument executed between an obligor and an obligee designed to secure the performance of a legal obligation through the in terrorem effect of the threat of a penalty for nonperformance.
The penalty rule is an interference with freedom of contract. It undermines the certainty which parties are entitled to expect of the law. Diplock LJ was neither the first nor the last to observe that “The court should not be astute to descry a ‘penalty clause’”: Robophone at p 1447.
The bond penalty is subject to full or partial forfeiture if the winning contractor fails to either execute the contract or provide the required performance and/or payment bonds. The bid bond assures and guarantees that, should the bidder be successful, the bidder will execute the contract and provide the required surety bonds.
Key takeaways. A prepayment penalty is a fee designed to discourage borrowers from paying off a loan ahead of time. Refinancing your mortgage or selling your home could trigger this penalty.
"A no-penalty CD can be a great option over a high-yield savings account if you know you won't need to touch the money for a set period of time but want to keep it relatively safe from stock ...
An alternative to a short-term CD is a no-penalty CD, which lets you dodge the typical penalty for early withdrawal. So you can withdraw your money and then move it into a higher-paying CD without ...
Any penalty is presumed to constitute liquidated damages. In the U.S. state of Louisiana, which follows a civil law system, liquidated damages are referred to as "stipulated damages". [21] Prior to 1 January 1985, Louisiana law used the term “penal clause” under former article 2117 of the Civil Code. [22]
Usually, a surety bond or surety is a promise by a surety or guarantor to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal's failure to meet the obligation.