U.S. Code > Appendix to Title 50 > SERVICEMEMBERS CIVIL RELIEF ACT— (§§ 501—596) > ACT OCT. 17, 1940, CH. 888, 54 STAT. 1178— (§§ 501—596) > TITLE II—GENERAL RELIEF (§§ 521—527) > § 523. Fines and penalties under contracts

§ 523. Fines and penalties under contracts

(a) Prohibition of penalties
When an action for compliance with the terms of a contract is stayed pursuant to this Act [sections 501 to 515 and 516 to 596 of this Appendix], a penalty shall not accrue for failure to comply with the terms of the contract during the period of the stay.
(b) Reduction or waiver of fines or penalties
If a servicemember fails to perform an obligation arising under a contract and a penalty is incurred arising from that nonperformance, a court may reduce or waive the fine or penalty if—
(1) the servicemember was in military service at the time the fine or penalty was incurred; and
(2) the ability of the servicemember to perform the obligation was materially affected by such military service.