The penalty is a contractual clause which constitutes the preliminary assessment of the damage that could result from the breach of an obligation. Basically it is a welcome part of the contract, the reasons are set out below, but often occurs in everyday life as users of different services to be misled and consequently obliged to pay insanely high penalties. As a user, my rights are most important for me, so I will read very carefully the following lines!
Why include penalty in their contracts?
Me and my contractor include as penalty clause in his contract, because both sides have an interest in its implementation. If one of us fails to fulfill its obligation just do not do it according to the term of the contract or does not comply with our deal, he will have to pay the exact amount specified in the contract, representing a penalty. It stimulates me to fulfill my obligation, because I know that would otherwise owe a penalty - and this is the preventive nature.
When has agreed penalty in case of default of the other party have the right to receive the amount representing the penalty without having to prove damages caused me. Sufficient is the fact of failure! This is because the inclusion of liquidated damages in the contract previously decided the issue of liability of the defaulting party.
Important!
The penalty is due under the law, so I can not claim such only if explicitly exist as a clause in the contract!
What can be agreed penalty?
Parties themselves decide how to formulate penalty clauses. May be stipulated penalty:
in the event of breach of contract (not pay my bill for cable TV);
delayed implementation (when, for example, according to the contract for courier services should receive a product of a particular specified date, but instead I deliver it three days late);
inaccurate (bad) performance (when shopping online rather than deliver my green shirt blue).
In which cases the agreed penalty may be amended by the court?
The penalty should be profitable, but to restore the damage done to the correct party to the contract. That is why the legislator envisaged the possibility that its size can be adjusted in accordance with the committed breach of contract and it may be amended in the following cases:
When the agreed penalty is not sufficient to recover damages caused me in full, I put forward before the District Court claim compensation over the penalty. In this case, it must prove it caused me harm.
The penalty may be reduced:
when its size is too large - performed a comparison between the actual harm suffered and the agreed amount of the penalty. I want the court to reduce the amount of the penalty, if they prove that the agreed amount excessively exceed the harm suffered. "
when the obligation is fulfilled in part;
when the obligation is fulfilled incorrectly - it is given another property or property has been given a blemish.
What happens when service oblige me to pay insanely high penalties?
"In failing under item 4 of the Treaty debtor pay a penalty of 50% of the total amount of credit" - in such cases, if it appears that the agreed penalty is excessive, I may be facing an unfair term. In the event that the other party to the contract requested to pay such penalty, I have a right object and give up, because I have the protection of the Law on Consumer Protection, which declared unfair void. It is important to bear in mind that according to the law, if the clause, even if unfair, is agreed individually, it will be real. Individually negotiated clauses are those on whose contents I, as a consumer, I can influence. For example, when signing a lease with my landlord I want a text of the contract to be turned off or promenen.Ne are individually negotiated terms, which have been prepared in advance and therefore the user is not able to influence their content, especially in cases of contract in general terms.
Important! Can not be reduced due to excessiveness penalty payable under commercial transaction where both parties are merchants. This legislative decision is prompted by the assumption of the legislature that traders are professionals, trade is their regular occupation and can more accurately anticipate the amount of damage caused by the breach of commitment.
(*) This article aims to outline some basic Your rights, with no claims to be legal adviser. If you have difficulty with the exercise of these fundamental rights or the case is more complex - we encourage you to consult a legal expert. (*)
