Metro Facilities,Inc.,contracts to sell a parking lot to Nouveau Property Company. The contract provides that if Metro does not close the deal by September 15,it must pay Nouveau one-half of the contract price. This provision is not enforceable because it is

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The provision in the contract is a penalty clause because it seeks to punish Metro Facilities, Inc. for not closing the deal on time by imposing a disproportionately high penalty. Penalty clauses are generally unenforceable because they are considered to be a form of punitive damages, rather than a reasonable estimate of the damages suffered by the other party.