Common use of Penalties for Non-compliance to Service Level Agreement Clause in Contracts

Penalties for Non-compliance to Service Level Agreement. Where the Supplier fails to deliver the Goods within the agreed and accepted milestone timelines and provided that the cause of the delay was not due to a fault of Transnet, penalties shall be imposed: Failure to achieve ninety–five percent [95%] of the delivery lead time(s) as detailed in clause 13.4 above, an averaged over each consecutive three (3) monthly period, shall result in the Supplier refunding to Transnet, a retrospective discount of one and half percent (1.5%) on the amounts invoiced for that period and shall be payable to Transnet at the end of the following quarterly period. Transnet shall impose a one percent (1%) penalty per day on the total value of the issued Purchase Order up to the maximum of seven (7) days, for late delivery of the Goods. The penalty fee shall be set off against the Supplier’s submitted month-end statement. a) If for any reason the Supplier is unable to achieve any milestone target indicated in the local content undertaking, the Supplier must approach the Department of Trade and Industry (“DTI”) to obtain exemption in order to supply the goods at a lower local content threshold. The Supplier is obliged to approach DTI for exemption within 10 (ten) days of determining that it is unable to achieve any milestone target or local content threshold. b) Should the DTI provide exemption, the Supplier shall be entitled to provide the goods at the lower local content threshold set by DTI. In such event, the Parties shall in good faith renegotiate the milestone targets or local content undertaking to ensure that the lowered local content thresholds are achieved.