Penalties
17 Penalties
Mandatory Requirement
A hirer must not require a contractor, or include a term in a contract requiring a contractor, to make any payment which is in the nature of a penalty. A penalty is a payment that must be made by a party for an amount in excess of the amount necessary to remedy the actual loss or damage suffered as a result of the conduct.
Example 17 to Sch. 1 Pt 3 cl. 17 amended by S.R. No. 4/2021 reg. 7(h).
Example 17
Fang Shan's contract states that she must pay $100 to the company if she is more than 10 minutes late in a delivery. The inclusion of this contract term is in breach of this Code, and Fang Shan could notify a dispute to the Small Business Commission.
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