Penalty

Penalties should aim at fixing a problem when it arises and ensuring that it does not recur. Guidelines to note while stipulating penalties are:

• Penalties should not leave scope for taking them lightly.
• Penalties should act as a deterrent to shoddy work by being adequately troublesome.
• Penalties should increase with recurrence of the same transgression.
• Penalties should be imposed immediately after failure occurs (say in the next monthly bill payment). This forces contractor to take corrective action immediately.
• Penalties should be shaped around the most critical aspects.