Learn about penalty clauses in contracts, their importance, and how they protect your interests. Essential for mitigating risks and ensuring compliance.This Agreement is made and entered into this ___ day of. KNOW ALL MEN BY THESE PRESENTS: This CONTRACT entered into on at. The Property Management Agreement is between Jin Kazama as the Manager and Eddy Gordo as the Owner. A penalty clause is a provision within a contract stating that if one party breaches it, they must pay financial compensation to the other. The proposed project is located in Mohave County on Interstate 40 between Milepost (MP). 0.12 and 2.40 near Topock. Management Services. The following provides a sample contract clause: Compliance with the Copeland "Anti-Kickback" Act. a. Contractor.