Most of the content of the Civil Code is occupied by articles on obligations. It is not surprising, because it is on them that our life is built: buying food in a store, traveling by public transport, housing charges, wages are all examples of obligations. The provisions on them are fully regulated by the Civil Code of the Russian Federation. Part 1 sets out the basic obligations, including the means of protection.
Unique option
Forfeit is both a way of securing obligations, and a fine for late payment, failure to fulfill obligations. Thus, the concept is applied quite often, the provisions are contained in the Civil Code of the Russian Federation (Part 1). Meanwhile, there are frequent cases when the penalty is clearly high, noticeably infringes on the rights of the party to the obligations or simply cannot be paid on the basis of the financial situation. In this case, a reduction of the penalty is required, but it is not so simple. First you need to clarify that the size of the penalty is different - it can be based on the law (and will be applied even when the parties did not provide for it) or on the contract (and its size is not limited here). In any case, it is necessary to apply article 333 of the Civil Code of the Russian Federation - it is it that provides the basis for reducing the size of the penalty.
Forfeit by law
It is defined by law and, as a rule, is applicable in cases where the parties did not provide for a possible forfeit upon conclusion of the contract (even if verbally). Its interest rate is quite small, and it will rarely be possible to claim that Article 333 of the Civil Code of the Russian Federation is applied . The reduction of the penalty defined by law is made in court quite rarely, as a rule, on two grounds:
- The amount of the penalty is higher than the amount of the principal debt. Conditionally, you entered into an agreement for 50,000 rubles, but you did not pay money on it (as a required party). Less than 3 years have passed, and the creditor goes to court, claiming you 50,000 rubles - the amount of the main debt, and, say, 55,000 rubles - the amount of the penalty. Its size will be reduced by 5000 rubles.
- The amount of the penalty is not comparable with violated obligations. This is possible if your obligations were insignificant or violated only in a small part, and the penalty is presented for the entire part of the debt or substantially higher than the damage that you caused the creditor.
Contractual penalty
The contractual penalty is the choice of the parties, and therefore its size can be many times higher. If the creditor set strict conditions for forfeit, and you simply had to agree to them, you can indicate in court that article 333 of the Civil Code of the Russian Federation should be applied. Reducing a forfeit that is prohibitively high is more a rule than an exception. But it is worth making a reservation: one of the fundamental principles of civil law is freedom of contract. If you agreed to a high percentage of the penalty, even out of necessity, then be prepared to pay it if the court finds sense in this. The grounds for reducing the contractual penalty are similar to those used for the penalty under the law. The difference is that the legal penalty is regulated by the state, which means that it cannot be recognized disproportionate.
Another important point is the status of the debtor. If you, as a debtor, carry out entrepreneurial activity, then the court of your own free will cannot apply article 333 of the Civil Code of the Russian Federation. The reduction of the penalty must be justified by you in a separate application. If the debtor is a simple individual, the court on its own initiative can reduce the amount of the penalty, considering it overstated.
Some types of forfeit
The most dangerous and least reduced penalty is that defined in the Consumer Protection Act. It is very high, and in view of the fact that such a penalty is recognized as a special penalty applied in violation of consumer rights, its reduction is extremely unlikely. In this regard, Article 333 of the Civil Code of the Russian Federation is practically not applied. A penalty on its basis is reduced in the most exceptional cases, because the rights of the consumer (citizens, as a rule) are an important public interest that is seriously protected by the state.
Remember that thanks to a settlement and agreements between the parties, you can not only reduce the size of the penalty, but eliminate it altogether.