The performance (act) that has economic value which the debtor commits paying to the creditor in case of non-performance or defective performance of the debt is called as penalty clause. Penalty clause does not pursue the aim of compensation of the damage but it pursues providing the performance of the obligation emerging from the contract. Penalty clause is attributable as a sanction that urges the debtor to perform the performance (act) on time and as required. It is feasible to divide the penalty clause into three kinds within the scope of The Turkish Code of Obligations (TCO) as: optional penalty clause, penalty clause added to the performance, and penalty clause preventing the performance (penalty of avoidance of contract). (TCO Article 179) The parties of the contract can determine the amount of the penalty clause freely. (TCO Article 182/1) However, the judge can reduce the penalty clause that s/he perceives as extremely high of his/her own accord. (TCO Article 182/3) Whereas the debtor that is attributed as merchant cannot demand reduction from the court by claiming that the penalty clause which was determined as abnormal. (TCC Article 22).