penalty
    n 1: the act of punishing [syn: punishment, penalty,
         penalization, penalisation]
    2: a payment required for not fulfilling a contract
    3: the disadvantage or painful consequences of an action or
       condition; "neglected his health and paid the penalty" [ant:
       advantage, reward]
    4: (games) a handicap or disadvantage that is imposed on a
       competitor (or a team) for an infraction of the rules of the
       game

Penalty \Pe"nal*ty\, n.; pl. Penalties. [F. p['e]nalit['e].
   See Penal.]
   1. Penal retribution; punishment for crime or offense; the
      suffering in person or property which is annexed by law or
      judicial decision to the commission of a crime, offense,
      or trespass.
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            Death is the penalty imposed.         --Milton.
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   2. The suffering, or the sum to be forfeited, to which a
      person subjects himself by covenant or agreement, in case
      of nonfulfillment of stipulations; forfeiture; fine.
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            The penalty and forfeit of my bond.   --Shak.
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   3. A handicap. [Sporting Cant]
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   Note: The term penalty is in law mostly applied to a
         pecuniary punishment.
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   Bill of pains and penalties. See under Bill.

   On penalty of, or Under penalty of, on pain of; with
      exposure to the penalty of, in case of transgression.
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PENALTY, contr. A clause in an agreement, by which the obligor agrees to pay 
a certain sum of money, if he shall fail to fulfill the contract contained 
in another clause of the same agreement. 
     2. A penal clause in an agreement supposes two obligations, one of 
which is the primitive or principal; and the other, is, conditional or 
accessory. 
     3. The penal obligation differs from an alternative obligation, for 
this is but one in its essence; while a penalty always includes two distinct 
engagements, and, when the first is fulfilled, the second is void. When a 
breach has taken place, the obligee has his option to require the 
fulfillment of the first obligation, or' the payment of the penalty, in 
those cases which cannot be relieved in equity, when the penalty is 
considered as liquidated damages. Dalloz, Dict. mots Obligation avec clause 
penale. 
     4. It is difficult, in many cases, to distinguish between a penalty and 
liquidated damages. In general, the courts have inclined to consider the sum 
reserved by such agreement to be a penalty, rather than as stipulated 
damages. (q.v.) 
     5. The sum will be considered as a penalty, and not as liquidated 
damages, in the following cases: 1. When the parties to the agreement have 
expressly declared the sum to be a penalty, and no other intent is to be 
collected from the instrument. 2 Bos. & P. 346; 1 H. Bl. 227; 1 Pick. 45 1; 
4 Pick. 179; 7 Wheat. 14; 3 John. Cases, 297. 2. When from the form of the 
instrument, as in the case of a money bond, it is sufficiently clear a 
penalty was intended. 
     3. When it is doubtful whether the sum was intended as a penalty or 
not, and a certain damage or debt is made payable on the face of the 
instrument. 2 B. & P. 350; 3 C. & P. 240. 4. When the agreement was 
evidently made for the attainment of another object, to which the sum, 
specified is wholly collateral, 11 Mass. 76; 15 Mass. 488; 1 Bro. C. C. 418, 
419. 5. When the agreement contains several matters, of different degrees of 
importance, and yet the sum mentioned is payable for the breach of any, even 
the least. 6 Bing. 141; 5 Bing. N. C. 390; 7 Scott, 364. 6. When the 
contract is not under seal, and the damages may be ascertained and 
estimated; and this though the parties have expressly declared the sum to be 
as liquidated damages. 2B. & Ald. 704; 6 B. & C. 216; 4 Dall. 150; 5 Cowen, 
144. See 2 Greenl. Ev. 258. 1 Holt N. P. C. 43 1 Bing. R. 302; S. C. 8 
Moore, 244; 4 Burr. 2229. 
     6. The penalty remains unaffected, although the condition may have been 
partially performed; as in a case where the penalty was one thousand 
dollars, and the condition was to pay an annuity of one hundred dollars, 
which had been paid for ten years; the penalty was still valid. 5 Verm. 365. 
     7. A distinction seems to be made in courts of equity between penalties 
and forfeitures. In cases of forfeiture for the breach of any covenant other 
than a covenant to pay rent, relief will not be granted in equity, unless 
upon the ground of accident, fraud, mistake, or surprise, when the breach is 
capable of compensation. Edin. on Inj. 22; 16 Ves. 403; S. C. 18 Ves. 58 3 
Ves. 692; 4 Bouv. List. n. 3915. 
     8. By penalty is understood, also, the punishment inflicted by law for 
its violation; the term is mostly applied to a pecuniary punishment. See 6 
Pet. 404; 10 Wheat. 246; 1 Gall. R. 26; 2 Gall. R. 515; 1 Mason, R. 243; 3 
John. Cas. 297: R. 451; 15 Mass. 488; 7 John. 72 4 Mass. 433; 8 Mass. 223; 8 
Com. Dig. 846; 16 Vin. Ab. 301; 1 Vern. 83, n.; 1 Saund. 58, n.; 1 Swans. 
318; 1 Wash. C. C. R. 1; 2 Wash. C. C. R. 323; Paine, C. C. R. 661; 7 Wheat. 
13. See, generally, Bouv. Inst. Index, h.t.