- A form of punishment for a person who breaks a law or regulation, as decided by a written law or a court decision
- A monetary payment owed by a party who does not meet a contractual obligation, serving as a punishment rather than compensation
- The business faced a significant penalty for violating environmental regulations.
- The contract included a clause concerning a penalty for late delivery of the goods.
- If the tenant breached the lease agreement, they were liable to pay a penalty.