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Is the penalty clause in contracts forbidden, and is it a sin to oversee a contract that includes this clause?

1 min readAlso available in العربية

If the penalty clause is forbidden, then it is not permissible for a lawyer to accept it or assist in it. Otherwise, he would be sinning and fall under the prohibition of cooperating in sin and aggression.

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

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