---
title: "New Contract Penalty"
slug: "new-contract-penalty"
updated: 2026-08-10T20:22:13Z
published: 2026-08-10T20:22:13Z
canonical: "help.idibilling.com/new-contract-penalty"
---

> ## Documentation Index
> Fetch the complete documentation index at: https://help.idibilling.com/llms.txt
> Use this file to discover all available pages before exploring further.

# New Contract Penalty

To create a new contract penalty for a contract term, select the contract term in the "Contract Terms" area of the New Contract Specification.

- Right-click on an empty row in the "Contract Penalties for the selected Contract Term" area and select **New**. This displays the New Contract Penalty window.

![UG template for Help](https://cdn.us.document360.io/3f7f8ade-bcb1-4ec8-af25-0c0ad8601afb/Images/Documentation/85364.png?sv=2026-02-06&spr=https&st=2026-11-14T10%3A58%3A44Z&se=2026-11-14T11%3A58%3A44Z&sr=c&sp=r&sig=vC%2FOJtmSeMrZSxhsJxvn5gbhYOmlZz2RZl6TLOAKm6g%3D)

The New Contract Penalty window provides the following input fields:

| ID | The unique system-defined identifier of the penalty. |
| --- | --- |
| Description | The name of the penalty. Maximum number of characters = 50. |
| Alt. Invoice Desc. | An alternate name that can be displayed on the customers' invoices. Maximum number of characters = 50. |
| Charge Tax Class | The proper tax class assigned to the penalty charge. See [Tax Class Definitions](/v1/docs/tax-class-definitions). |
| Penalty Amount | The amount of the penalty to be applied, if the terms of the contract are not met. See [Penalties](/v1/docs/penalties-1). |
| Override penalty to value of handset discount | Checked: The discounts applied to a handset when it is sold are summed and applied to the contract as a penalty override if the term commitment is not met. Used as part of an early termination fee (ETV). Unchecked: Discounts applied to a handset are ignored if the term commitment is not met. **Notes**: - This check box is available if the selected Contract Term is ***Term Commitment*** and the penalty Calculation Type is ***Fixed Fee*** or ***Prorated Fee***. - This check box can be checked for no more than one term commitment penalty for the selected term commitment contract. |
| Calculation Type | The type of fee associated with the penalty. The Calculation Types available depend on the Contract term associated with the penalty. See [Penalty Types Calculation Table](/v1/docs/penalty-types-calculation-table). |

> [!NOTE]
> Note
> 
> The **Notes, Taxes** and **General Ledger** tabs are the same as the **Notes, Taxes** and **General Ledger** tabs for Products. See [Adding Products](/v1/docs/adding-editing-products).