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From: Webster's Revised Unabridged Dictionary (1913)

 Pe·nal·ty n.; pl. Penalties
 1. Penal retribution; punishment for crime or offense; the suffering in person or property which is annexed by law or judicial decision to the commission of a crime, offense, or trespass.
    Death is the penalty imposed.   --Milton.
 2. The suffering, or the sum to be forfeited, to which a person subjects himself by covenant or agreement, in case of nonfulfillment of stipulations; forfeiture; fine.
    The penalty and forfeit of my bond.   --Shak.
 3. A handicap. [Sporting Cant]
 Note:The term penalty is in law mostly applied to a pecuniary punishment.
 Bill of pains and penalties. See under Bill.
 On penalty of, or Under penalty of, on pain of; with exposure to the penalty of, in case of transgression.