What are penalty clauses in a contract?

Penalty clauses (штрафные санкции) in a contract are provisions that stipulate punishment (usually monetary) for breach of obligations by one of the parties. They serve to encourage the timely and complete fulfillment of contractual obligations.

For example, if a contractor does not deliver the project by the agreed deadline, the contract may specify a penalty for each day of delay. This helps reduce risks and compensate the client for potential losses.

It is important that such conditions are clearly specified and agreed upon by both parties to avoid disputes.