The Civil Code of the Russian Federation establishes in article 330 the concept of forfeit, according to which it is understood to be a strictly stipulated by law amount (or monetary range) that is payable by the debtor to the creditor in case of untimely fulfillment of any obligation or in the improper performance of duties stipulated by labor or civil -legal agreement.
In accordance with such a definition of the concept, the essence of the penalty consists in the fact that the law determines a certain amount of money paid regardless of the size of the damage caused, and even in cases where this damage is not done at all. The latter circumstance concerns the violation of the deadlines for the fulfillment of obligations under the labor agreement.
Fines, penalties and forfeits established by law are one of the few methods of property liability of individuals or organizations for violation of contractual obligations. In addition to the amounts, the law also determines the specific types of forfeit and the grounds on which these sanctions can be applied. For example, it should be borne in mind that the list of these reasons is much narrower than the one that is used in determining sanctions for prosecution in the form of compensation for losses. The easiest way to apply this sanction is to prove that contractual obligations were not properly performed.
Due to the variety of forms of liability for which the penalty may be applied, the law classifies the types of penalty for the following reasons, which are objective criteria that determine the distinction between these forms of regulation.
So, depending on the order of establishment, legal and contractual penalties are allocated. The first is determined by law and is objective in nature, that is, the parties cannot change its parameters. The contractual is established as a result of an agreement between the parties to the transaction. Legitimate applies in cases where the contract did not provide for it as a form of authorization for its violation. The only exception to this rule is the right of the parties to contractually stipulate in the contract a penalty amount that exceeds that established by law.
All types of forfeit constitute a measure of civil liability established by law , because the reasons for its occurrence practically coincide with those grounds for the onset of liability that are prescribed in the Civil Code of the Russian Federation. In the event that the contract or specific law does not contain precise indications of the reasons and grounds for bringing to justice, it is possible to appeal to the court.
As sanctions, all existing types of forfeit may be combined with other types of liability, primarily with compensation. In this case, the law provides for the classification of forfeits on the following grounds:
1. A set-off penalty gives the creditor the right to demand, in addition to paying the penalty itself, and compensation for losses, if such are established in the manner prescribed by law, As a rule, such a measure is used in cases where the amount of the penalty is much less than the losses incurred and does not cover the damage.
2. The penalty gives the right to demand full compensation for damage, not only by the amount of the difference between the damage and the penalty, but also above it. As a rule, such sanctions are applied for the most significant violations that entailed serious consequences.
3. In the event that the creditor is denied the right to compensation for losses, an exceptional penalty applies.
4. And, finally, an alternative forfeit gives the creditor the right to choose which type of sanction to choose-forfeit or damages.