Late Delivery Penalty

A Late Delivery Penalty is a contractual clause that imposes financial penalties on suppliers for failing to deliver goods or services within the agreed timeline. These penalties incentivize timely performance and compensate buyers for potential losses caused by delays.

Key considerations for late delivery penalties include:

• Clear definition of delivery timelines
• Penalty calculation methods (e.g., percentage of order value per day)
• Exemptions for force majeure events
• Documentation requirements for claims

Contract Lifecycle Management (CLM) systems help track delivery timelines and enforce penalty clauses, ensuring suppliers adhere to agreed schedules and buyers are compensated for delays.