It is known that the parties of the contract include, in their contract, a penal clause hoping to urge good implementation and adhere to the specified deadlines without resorting to the judiciary. This clause led to many problems related to its nature. Questions were asked about its lawfulness and the conditions that must fulfill in order to be implemented, and the judiciary’s authority to interfere in the assessment of this clause, especially because this interference is considered an objection to the most important legal principles of the contract, knowing that this clause considers the contract “the law of the contractors”. Accordingly, we should ask the following questions: The judge may amend the penal clause to reduce and increase it? What are the restrictions of this intervention?
The attitude toward the comparative law was not unified between judges when dealing with this matter; thus, the importance of this research is that it reveals the most important contradicting legal theories related to it, which, until nowadays, there is no consensus or agreement on this matter.
Considering that the penal clause, sometimes, is a mixture between compensation and punishment, the judge has the authority to amend it by increasing or decreasing it, or the right to amend the clause when it is only a compensation for damage without imposing any penalty.
This research aimed to discuss and analyze these situations in order to determine the foundations adopted by the judge to interfere in the application of the penal clause, and to make sure of its right description, to verify the clause legal conditions and to deal with the amendment according to the presented case.
Farhat, Alissar and Yakan, Saed
"Judicial authority on penalty clause,"
Al Jinan الجنان: Vol. 13
, Article 7.
Available at: https://digitalcommons.aaru.edu.jo/aljinan/vol13/iss1/7