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What is the ruling on the late fee imposed on goods not delivered on time, or on bounced checks due to insufficient funds? And is the late fee considered a voiding condition in the contract, thereby invalidating the installment contract?

1 min readAlso available in العربية

There is no objection to the governmental entity imposing a penalty clause on the supplier for delays in delivering the agreed-upon goods, because it is permissible to stipulate a penalty clause in all financial contracts, except for contracts in which the original obligation is a debt.

The existence of a bounced check fee imposed by the Central Bank or the country's law does not prevent banking transactions, and the responsibility for imposing the fee falls on the entity that imposed it.

Summarized from the full answer at Ftawy · reviewed Sep 2, 2026

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