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hey guys today were going to talk about penalty clauses Im sure most of you have seen contracts DIY contracts home drafted contracts which contain penalty clauses for example if a supplier delivers the goods one day late he has to pay $200 Ive also seen employment contracts employment agreements that contain clauses such as if the employee resigns before six months she has to pay $10,000 Ive also seen employment contracts with non competition clauses we state that if the employee resigns and books for competitor employers to pay fifty thousand dollar penalty now to cut the long story short penalty clauses are void and unenforceable because lawyers know that penalty clauses are void and unenforceable the youth when drafting contracts they usually crafted as liquidated damages liquidated damages are recognized under contract law recognized by the courts liquidated damages are a genuine free estimate of losses that a party will suffer from the other parties bdocHub for example if an i