noun, plural penalties.
a punishment imposed or incurred for a violation of law or rule.
a loss, forfeiture, suffering, or the like, to which one subjects oneself by nonfulfillment of some obligation.
something that is forfeited, as a sum of money.
a disadvantage imposed upon one of the competitors or upon one side for infraction of the rules of a game, sport, etc.
consequence or disadvantage attached to any action, condition, etc.

1505–15;Medieval Latin poenālitās. See penal, -ty2 Unabridged
Based on the Random House Dictionary, © Random House, Inc. 2014.
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World English Dictionary
penalty (ˈpɛnəltɪ)
n , pl -ties
1.  a legal or official punishment, such as a term of imprisonment
2.  some other form of punishment, such as a fine or forfeit for not fulfilling a contract
3.  loss, suffering, or other unfortunate result of one's own action, error, etc
4.  sport, games a handicap awarded against a player or team for illegal play, such as a free shot at goal by the opposing team, loss of points, etc
[C16: from Medieval Latin poenālitās penalty; see penal]

Collins English Dictionary - Complete & Unabridged 10th Edition
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Example sentences
Since you seem to have switched employers, you can withdraw your money from the
  original without penalty.
The majority of players elected to impose a penalty even when it cost them some
  of their own money.
Following each round, the losers will receive penalty points based on the cards
  left in their hands.
Then, if you need to change flights, you do not incur a penalty.
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