Republic of Ireland Law
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1. There are no legal ramifications for designating the clause a "penalty clause". Instead the law looks to the substance of the clause to determine whether it is lawful or not. So long as the overall figure of 15% of the contract value is a genuine pre-estimate of the loss which is to be suffered from the delay, then the clause will be upheld. Be aware additionally that courts generally have a tendency to uphold these sorts of clauses in building contract cases so the chances of getting a modest clause of this nature struck down are not high. So, in essence, 15% of a contract value is not such a high figure to amount to being struck down, as it is not large in the context of the overall contract.
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