53-9-4. Penalties for nonperformance of contract void, exceptions.
Penalties imposed by contract for any nonperformance thereof are void. This section does not void obligations penal in form such as heretofore have been commonly used, but it voids their penal clauses.
Source: CivC 1877, §955; CL 1887, §3579; RCivC 1903, §1273; RC 1919, §894; SDC 1939, §10.0703.