What is the purpose of an "anguish clause" in contracting?

The purpose of an "anguish clause" in contracting is to outline the consequences of failing to meet specific performance metrics. This type of clause plays a critical role in ensuring that both parties are aware of the expectations set forth in the contract and the implications if those expectations are not met. By clearly defining the performance metrics and the consequences of not achieving them, the clause helps to promote accountability and maintain the integrity of the contract.

The inclusion of consequences provides a framework for addressing potential underperformance and can also serve as a deterrent, encouraging all parties to fulfill their contractual obligations diligently. This aspect is vital in performance-based contracts where the success of the agreement hinges on measurable outcomes.