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grace period definition
a time stated in a contract in which a late payment or performance may be made without
penalty. Often after the grace period ends without payment or performance by the
person who is supposed to pay, the contract is suspended. Example if a person does
not pay his/her insurance payment (premium) by the stated deadline, he/she usually
has a few days extra to pay before the absolute deadline. If the person does not
pay by then, the insurance company cancels the contract, i. e. your insurance.
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