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INFOLAWYER
INFOLAWYER, Attorney
Category: Business Law
Satisfied Customers: 53829
Experience:  LICENSED BUSINESS LAWYER
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I am an Independent Contractor for a software company. We

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I am an Independent Contractor for a software company. We are paid a per diem to perform a product demonstration in the amount of $225 per sales call, and then commissioned if the sale closes. The Independent contractor is required to complete a form that is pasted into the corporate lead tracking software. Recently the company began charging a penalty of $25 per day the "form" is not completed and pasted into lead tracking software. My question is can the penalty assessed be greater than the contracted per Diem of $225?
The company can penalize for not following procedure. It can do so if it gives advance notice. But a court is not likely to honor a penalty that is deemed excessive and leaves the contractor unpaid. It would be deemed a breach and a case of unjust enrichment.
Customer: replied 6 years ago.
Is there any laws that support this that I could further reference to understand "It would be deemed a breach and a case of unjust enrichment"?
It is not statutory, but if a penalty is imposed that you did not contract for, it is a breach of the terms of your agreement. Even absent this point, a court can use a non contract theory called unjust enrichment, where the result of enforcing an excessive penalty creates unfairness and lack of equity. It is common law.
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