Penalty for failure to fulfill obligations under the contract in 2021

A penalty is a fine that is collected if the terms of the contract are not fulfilled. It is widely used as it has a number of advantages. It is an instrument of civil liability.

Question: How to reflect in the accounting records of the purchasing organization the amount of the recognized penalty for late payment for goods supplied? The amount of the penalty provided for in the supply contract, specified in the supplier’s letter of claim, is 100,000 rubles. The organization acknowledged the claim and notified the supplier in writing. The amount of the penalty is transferred to the supplier's account. For the purposes of tax accounting of income and expenses, the accrual method is used. View answer

Types of sanctions for violation of contract terms

The parties are obliged to strictly fulfill their obligations under the contract, supply goods, perform work or provide services in accordance with the agreed conditions. If the object of the obligation under the contract is property, it must be transferred on time and in appropriate condition. But situations where the obligation under the contract is not fulfilled occur quite often in practice. In this case, the parties to the contract have the right to agree on measures of liability for violations of the obligation. The law establishes the following types of sanctions:

compensation for losses caused by violation of contractual obligations;
penalty (variations of which are penalties and fines);
interest for the use of other people's funds under Art. 395 of the Civil Code of the Russian Federation.

Features of penalties in different circumstances

The penalty can be collected in different cases:

When collecting taxes . The amount of fines is growing daily. If taxes and fines are not paid, the debt may be collected in court. In this case, the debtor's property is seized.
With OSAGO . Insurance requires regular payments. If they are not done, then fines will also be assessed.
For utility debts . In recent years, penalties for utility debts have become stricter. If payments are not made, utilities may be shut off. The resumption of housing and communal services occurs only after the citizen pays both the penalty and the debt itself.

The accrual of fines is inevitable when lending in banking institutions.

Correlation with the concepts of “fine”, “penalty” and “interest”

There is no clear distinction between these terms in the legislation. In practice, there is an opinion that a fine and penalty are types of penalties, and the fine is established in the form of an exact amount, in a specific amount or as a percentage of the amount and is collected once. A penalty is a sanction for violating the terms of a contract, which is expressed as a percentage for each day of non-fulfillment of obligations or delay. Is interest under a contract a penalty? These are different types of interim measures and measures of liability of the counterparty. If the agreement does not indicate the creditor’s right to collect a penalty, then, in addition to direct losses that must be proven and justified, he can only count on receiving interest for the use of someone else’s money in accordance with Art. 395 of the Civil Code of the Russian Federation.

Formula for calculating the refinancing rate

The penalty can be determined using a variety of formulas. One of the most popular is the refinancing rate formula. The following factors influence the calculation results:

The banking institution that calculates the penalty. A person can choose the bank where the refinancing rate will be lower.
Amount of debt.
A positive history of the debtor may influence the reduction of fines.

Sanctions can be determined based on the following formula:

Penalty = debt * refinancing rate * days of delay / 100 / number of days per year

This formula is relevant when calculating based on the amount of debt.

Calculation example

A man borrowed 1,000 rubles, but did not return the funds on time. The delay was 10 days. The refinancing rate at that time was 8%.

The calculations will be as follows:

Penalty = 1000 * 8% * 10 / 100 / 365 days.

The fine will be 2 rubles 19 kopecks.

Purpose and application

In accordance with the Civil Code of the Russian Federation, a contractual penalty is applied if such a condition is clearly stated and defined in the agreement. In other cases, the provisions of the law on the extent of liability of the parties are fulfilled.

It is important to remember that in certain cases the size of the sanction is fixed at the legislative level, and the parties cannot reduce it by their own decision; they only have the right to increase it.

Such a strict fixation is established by the legislator as a measure of liability of a contract participant in the event of:

failure to comply with the deadline for fulfilling consumer requirements by the seller - here the sanction established by the “Law on the Protection of Consumer Rights” is applied;
failure by the insurer to comply with the conditions regarding the deadline for returning the insurance premium or part thereof to the policyholder under the law on compulsory motor liability insurance (Part 4, Article 16.1 of the Federal Law of April 25, 2002 No. 40-FZ).

Thus, to briefly answer the question of what a penalty under a contract is: it is an effective tool for realizing the rights of the parties to the contract, it serves as a guarantee of fulfillment of obligations. In case of their violation, if such a sanction is provided for in the contract, the party does not need to prove its losses; it is enough to refer to a specific clause of the document. Therefore, the penalty is used in practice very often.

Kinds

In addition to the above (fine or penalty), there are other types of this sanction, with the possibility or impossibility of simultaneously collecting losses from the transaction participant:

offset, in this case, the described measure of liability is applied along with the recovery of damages in the part not covered by it;
exceptional, when only DV is recovered, and losses are not subject to compensation. Such sanctions, due to established practice, are applied when interacting with carriers and when providing transport services;
penalty, when recovery of damages is possible in full in excess of the DV, this rule applies only if there is a direct indication in the agreement;
alternative, when the creditor has the right to choose one of the above methods of protecting his rights. It also applies if there is a direct indication in the contract.

The parties determine a penalty for violation of obligations in the contract. But there are cases when the legislator regulates the amount of sanctions in a certain area of legal relations with specific rules.

An example of fixing the amount of a penalty for violation of obligations under a contract at the legislative level:

violation by the seller of obligations not under the contract, but in accordance with the law on the protection of consumer rights, for example: failure to comply with deadlines for fulfilling consumer requirements, failure to comply with the deadline for the transfer of prepaid goods, delay in performing work, delay in fulfilling certain consumer requirements (Articles 23-31 of the PPZPP);
late payment on a bill of exchange (Article 3 of Federal Law No. 48, which is called “On promissory notes and bills of exchange”);
delay in the return of the insurance premium to the policyholder by the policyholder (Article 16.1 of the Federal Law “On Compulsory Motor Liability Insurance”);
late payments in fulfillment of obligations under the agreement for participation in shared construction (Article 5 of Federal Law-214).

Determination by the parties of the extent of liability for violation of obligations in the contract

When determining the terms of interaction, rights and obligations and measures of liability for failure to fulfill obligations, the parties must first of all take into account the legislative norms of this type of legal relationship and transaction. If under the Civil Code there are no strict rules regarding liability measures, and it is possible to clarify the provisions of the law, the parties have the right to establish the amount and procedure for determining and collecting penalties for non-fulfillment or improper fulfillment of the terms of the contract.

Wording on the amount of the sanction, if they allow it to be characterized as an element of pricing (for example, “if the delivery of products is delayed by more than 15 days, the price of the product initially set increases by 3%”, etc.), may become the basis for charging VAT for the amount of the penalty.

An example of the wording of a penalty clause:

In case of failure to fulfill the obligation to pay for the goods on time specified in clause (the clause of the agreement, contract is indicated) of this agreement, the Buyer is obliged to pay a penalty in the amount (a percentage of the amount or a fixed amount is indicated) of the amount of the resulting debt for each day of delay, starting from the day on which the obligation under the contract was to be fulfilled.

In case of violations when paying for services, the penalty under the contract for the provision of services can be any: set-off, penalty, exceptional, alternative; the legislator gives the parties to the transaction complete freedom of choice. But it is also necessary to take into account the rights of other participants, the restrictions possible when applying the law in practice, because the courts base their decisions, among other things, on the principle of fairness and compliance of the measure of liability with the violation committed. Therefore, they often reduce the penalty.

Results

Thus, the question about the difference between a penalty and a penalty does not seem entirely correct; it would be more correct to talk about the relationship between these two concepts.
Thus, civil law provides that penalties are a form of penalty applied to a party that has performed its duties in bad faith. At the same time, a comparison of penalties under tax law and penalties in the form of penalties under civil law shows significant differences between these types of sanctions, due to the specifics of such legal relations. You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

Collection procedure

Fulfillment of the terms of interaction, compliance with the obligations assumed in accordance with the contract is the main obligation of the party to the contract, otherwise established consequences, including sanctions, are possible. The procedure for collecting a penalty is general; for this it is necessary:

Calculate the amount of the penalty.
Follow the claim procedure for resolving the dispute (draft a claim for collection and send it to the debtor).
Go to court with a claim to collect the debt.
Justify the requirements and provide evidence of your arguments.

The settlement mechanism is determined in accordance with law or agreement. The period for which the penalty is collected is also determined in accordance with the agreement. Usually it is collected for the entire period of non-performance or improper performance until the court makes a decision. You cannot ask the court to make a decision on the collection of a sanction on the day of actual execution (as is the case with interest under Article 394 of the Civil Code of the Russian Federation).

Currently, judicial practice proceeds from the fact that a one-time recovery of penalties and interest under Art. 395 for using someone else's money is unacceptable. The fact is that the courts considered the financial burden on the defendant to be excessive, since when applying both of these measures of liability, it is not necessary to prove the size and fact of losses.

Penalty is currently one of the most common ways to secure an obligation. However, in practice many questions related to it still arise: how to establish it in the contract? how to calculate and collect it? What is the difference between a penalty and a fine?

It is important not only to be able to calculate the penalty, but you also need to be able to collect it. Read how to do it:

in a claim procedure;
through a notary's writ of execution;
by order;
in enforcement proceedings.

What is a penalty and why is it needed?

In accordance with paragraph 1 of Art. 311 of the Civil Code of the Republic of Belarus (hereinafter -) a penalty (fine, penalty) is a sum of money determined by law or contract, which the debtor is obliged to pay to the creditor, unless otherwise provided by legislative acts, in the event of non-fulfillment or improper fulfillment of an obligation, in particular in the case of delay in fulfillment .

The penalty depends on the main obligation secured by it and cannot exist as an independent obligation (i.e., it is of an accessory nature). So, for example, if the main obligation is declared invalid, the obligation to pay a penalty is also invalid.

Based on the provisions on penalties and the established practice of establishing and collecting them, we believe it is possible to identify the following functions of penalties:

Security - a penalty is primarily intended to ensure proper fulfillment of the obligation and prevent violations by the counterparty;
Compensatory – in case of violation of an obligation, the injured party, by collecting a penalty, can compensate for the adverse consequences incurred;
Punitive - the party that violated the obligation is liable for dishonest behavior in the form of additional costs for paying a penalty.

What types of penalties are there?

Classification depending on the source:

1) Legal penalty – a penalty, the collection of which is provided for by legislative acts. The creditor has the right to demand payment of a legal penalty, regardless of whether the obligation to pay it is provided for by agreement of the parties (clause 1 of Article 313 of the Civil Code).

Example According to clause 2 of Art. 32 of the Law of the Republic of Belarus dated 01/09/2002 No. 90-Z “On the Protection of Consumer Rights”, for violation of the deadlines for eliminating deficiencies in the work performed (service provided), the contractor pays the consumer a penalty in the amount of one percent for each day (hour, if the period is defined in hours) of delay the price of performing the work (providing a service), and if the price of performing the work (providing a service) is not determined by the contract for the performance of work (provision of services) - in the amount of one percent of the total price of the order.

It is allowed to change the amount of the legal penalty by agreement of the parties, unless the law prohibits this. Accordingly, the prohibition of changing the amount of a legal penalty should be expressly stated in the legislation. If there is no such prohibition, then the amount of the penalty can be changed.

Example According to sub. 1.3 clause 1 of the resolution of the Council of Ministers of the Republic of Belarus dated 02.28.2005 No. 221 “On additional measures to ensure payments for meat and dairy products and making additions and changes to some resolutions of the Government of the Republic of Belarus” it is not allowed to reduce the amount of the penalty specified in clause 2 of the resolution Council of Ministers of the Republic of Belarus dated July 31, 2003 No. 1014 “On payments for meat and dairy products.” In accordance with clause 87 of the Rules for the conclusion and execution of construction contracts, approved by Resolution of the Council of Ministers of the Republic of Belarus dated September 15, 1998 No. 1450, by agreement of the parties, the amounts of liability established by these Rules may be increased .

Changing the amount of the penalty established by law is possible both by changing the rules for calculating it (for example, the daily rate of the penalty) and by establishing a maximum limit for collecting the penalty (for example, no more than 20% of the total debt).

2) Contractual penalty – a penalty, the collection of which is provided for by the terms of the contract.

Taking into account the provisions on freedom of contract, the parties have the right to independently determine the amount and procedure for calculating the penalty established for violation of an obligation.

When including a penalty clause in a contract, the following must be taken into account:

penalty agreement form.

Civil legislation allows transactions both in written and oral form. In turn, certain strict requirements are established regarding the form of the agreement on a penalty - it must be made in writing, regardless of the form of the main obligation (Part 1 of Article 312 of the Civil Code). If the written form is not observed, the agreement on a penalty is invalid (Part 2 of Article 312 of the Civil Code);

amount of penalty.

When formulating provisions on penalties in a contract, it should also be taken into account that establishing a high amount of penalties does not necessarily imply its full recovery in the event of a violation of obligations. The penalty should not be a way of enrichment for the creditor.

By virtue of Art. 314 of the Civil Code, if the penalty payable is clearly disproportionate to the consequences of violation of the obligation, the court has the right to reduce the penalty. For this reason, the initial establishment in the contract of an excessively high amount of the penalty is not justified;

the basis for the obligation to pay a penalty.

When formulating the terms of an agreement on a penalty, it is necessary to clearly define the violation for which a penalty is payable. So, for example, if the contract establishes a penalty for “refusal to pay for the delivered goods,” it cannot be applied if the party is late in payment. The penalty established in a work contract providing for the performance of work in stages for “delay in the deadline for completing the work provided for in this contract” cannot always be applied if the deadline for completing a specific stage of work is violated, and not the final deadline for completing all work as a whole;

procedure for calculating penalties.

The procedure for calculating the penalty must also be determined by the contract.

Thus, the arithmetic basis for calculating the penalty in a contract can be:

the amount of the entire obligation under the contract;
the amount of the unfulfilled obligation;
the amount of payment to be made by the party to the obligation;
and etc.

The absence of a clearly defined procedure for calculating the penalty may lead to the recognition of the agreement on the penalty as not concluded and, therefore, to the impossibility of collecting the penalty as a whole, or in the event of a legal dispute, to a decrease or increase in the amount of the awarded penalty compared to the amount that the party was counting on.

Example Contract term: “In case of delay in payment for the delivered goods, the Buyer pays the Seller a penalty in the amount of 0.1% of the cost of the delivered goods, but not more than 10% of the total cost of the delivered goods.” Although, most likely, the parties intended in this case to enshrine in law the current (or so-called in theory mandatory) penalty charged for each day of delay in fulfilling the obligation (this is evidenced by the enshrinement in the contract of a rule limiting its maximum amount), a lack of legal technique led to the fact that, if the wording of the contract is literally read, a penalty of only 0.1% of the cost can be charged.

Classification of penalties depending on their relationship with losses:

Settlement penalty – damages are recovered only in the amount exceeding the penalty paid or collected.

According to the general rules, a penalty is set off, unless the law or agreement expressly provides otherwise.

Example: Penalty for violation of an obligation is 100 rubles, damages for violation of the same obligation are 150 rubles. Consequently, in the event of an offset penalty, 100 rubles can be recovered from the person who violated the obligation. penalties and 50 rubles. losses (150 minus 100);

Penalty – both the penalty and all incurred losses are collected.

The penalty is a penalty if it is expressly provided for by law or contract. When establishing a penalty, legal norms or contract terms either directly use the term “penalty” or provide that damages for failure to fulfill an obligation are recovered in full, regardless of the amount of the penalty.

Example: Clause 2 of Art. 15 of the Law of the Republic of Belarus dated 01/09/2002 No. 90-Z “On the Protection of Consumer Rights” provides that losses caused to the consumer are subject to compensation in full in excess of the penalty established by law or contract. In a situation similar to the above, a fine of 100 rubles can be recovered from the person who violated the obligation. penalties and 150 rubles. losses.

Alternative penalty - either a penalty or damages are recovered.

As in the case of a punitive penalty, a penalty is an alternative if it is expressly provided for by law or contract.

Example In a situation similar to the above, from the person who violated the obligation, with an alternative penalty, you can recover either 100 rubles. penalties, or 150 rubles. losses.

Exceptional penalty - only a penalty is recovered, but not damages.

As in the case of punitive and alternative penalties, penalties are exclusive if expressly provided for by law or contract.

Example In a situation similar to the one given above, with an exceptional penalty, only 100 rubles can be recovered from the person who violated the obligation. penalties. Losses are not recoverable.

When determining the amount of the penalty, it should be taken into account that limited liability can also be established by law or contract (Article 371, paragraph 2 of Article 365 of the Civil Code), when losses in the part not covered by the penalty, or in excess of it, or instead of it can be recovered up to the limits established by the limitation.

How to correctly calculate the penalty?

Depending on the calculation procedure in contractual practice, the following types of penalties are distinguished:

1) Penalty is a “current” penalty, which is calculated based on the days of delay in fulfilling the obligation.

The penalty is calculated using the formula:

Amount for which a penalty is charged X number of days of delay X penalty rate

Example: On June 3, 2015, under a supply agreement, goods worth 19,000 rubles were delivered to the buyer according to the invoice. The buyer must make deferred payment within 20 days from the date of delivery of the goods. The date of proper payment for the goods in this case is June 23, 2015 (June 3, 2015 + 20 days). Consequently, from June 24, 2015, the buyer’s delay in fulfilling its obligations begins. On October 5, 2015, the buyer made a partial payment in the amount of RUB 100. The remaining part of the price of the goods is not paid by the buyer. The agreement contains a condition according to which, for late or incomplete transfer of funds within the terms stipulated by the agreement, the buyer pays the supplier a penalty in the amount of 0.15% of the amount of goods not paid on time for each day of late payment. The claim for payment of the price of the goods and penalties is made by the buyer on November 19, 2015.

Thus, the total amount of the penalty is RUB 4,239.75.

When calculating penalties, you need to pay attention to the following:

period of delay.

Incorrect calculation of the period of delay is one of the most common errors when filing a claim for the collection of penalties. The beginning of the period of delay is considered to be the first day of violation of the terms of fulfillment of the obligation.

In accordance with paragraph 1 of Art. 295 of the Civil Code, if an obligation provides for or allows one to determine the day of its execution or the period of time during which it must be fulfilled, the obligation is subject to execution on that day or, accordingly, at any time within such period.

Civil legislation allows the definition of deadlines both by a period of time - years, months, weeks, days or hours, and by a calendar date (clause 1 of Article 191 of the Civil Code).

In accordance with paragraph 1 of Art. 193 of the Civil Code, a period calculated in years expires in the corresponding month and day of the last year of the term. In this case, six months are considered equal to the corresponding 6 months and the rules for periods calculated in months are applied to the period defined as six months.

The rules for periods calculated in months apply to periods calculated in quarters of the year. In this case, a quarter is considered equal to 3 months, and quarters are counted from the beginning of the year (clause 2 of Article 193 of the Civil Code).

According to paragraph 3 of Art. 193 of the Civil Code, a period calculated in months expires on the corresponding date of the last month of the period. If the end of a period calculated in months falls on a month in which there is no corresponding date, then the period expires on the last day of that month. A period defined as half a month is considered as a period calculated in days and is considered equal to 15 days.

The period, calculated in weeks, expires on the corresponding day of the last week of the period (clause 4 of Article 193 of the Civil Code).

Example In accordance with the loan agreement, the loan is provided for a period until January 29, 2021 (i.e., the borrower must repay such a loan no later than January 29, 2021). Consequently, the first day of delay in the fulfillment of the borrower’s obligations is January 30, 2021.

Example The terms of the supply agreement establish a deferred payment for the delivered goods - 30 calendar days from the date of transfer of the goods. The goods were delivered on August 17, 2015, therefore, payment must be made no later than September 16, 2015. Thus, from September 17, 2015, the buyer’s delay in fulfilling the obligation to supply the goods begins.

It is necessary to pay attention to the fact that if the last day of proper fulfillment of an obligation falls on a non-working day, then the end of the period is considered to be the next working day following it (Article 194 of the Civil Code).

Example The deadline for payment for carrier services according to the terms of the contract is within 3 days from the date of receipt of the invoice. The invoice was received on May 4, 2021. The end of the 3-day period falls on May 7, 2021 (Saturday), therefore, the deadline for proper execution is postponed to the next business day. Since May 8, 2016 is a Sunday, and May 9, 2021 is a day off, the last day of payment is May 10, 2021. Thus, the payment delay begins from May 11, 2021.

Often, an obligation does not provide for a deadline for its fulfillment and does not contain conditions that would allow determining this period.

In this case, by virtue of paragraph. 1 item 2 art. 295 of the Civil Code, such an obligation must be fulfilled within a reasonable time after the obligation arises.

In this case, to determine the beginning of the period of delay, one should be guided by clause 2 of Art. 295 of the Civil Code, according to which an obligation not fulfilled within a reasonable time, as well as an obligation the period of which is determined by the moment of demand, the debtor is obliged to fulfill within 7 days from the date of receipt of the creditor’s written demand for its fulfillment, unless the obligation to perform within a different period arises from an act of legislation, the terms of an obligation or the essence of an obligation.

Accordingly, if the deadline for fulfilling the obligation is not established either by the contract or by law, then the creditor should present to the debtor a written demand for the fulfillment of obligations, signed by an authorized officer of the creditor.

The request must be sent by registered mail, which requires fixing the date of its delivery. From the moment the debtor receives the demand, the 7-day period for fulfilling the obligation begins to run. After the expiration of the 7-day period, calculated from the date of receipt of the demand by the debtor, the delay in fulfilling the obligation begins to run.

However, please note that there are exceptions to this rule. For example, if the delivery agreement does not establish a payment period for the delivered goods and does not indicate the procedure for determining it, and payments are made by payment orders, payment must be made immediately after the seller transfers the goods. The buyer's delay occurs after the expiration of the established period for making a bank transfer, which is calculated from the day following the day of receipt of the goods (clause 1 of article 456 of the Civil Code, clause 14 of the resolution of the Plenum of the Supreme Economic Court of the Republic of Belarus dated December 5, 2012 No. 12 “On some issues of consideration of cases arising from contracts for the supply of goods");

the amount on which the penalty is charged.

Agreements may stipulate differently the amount for which penalties are charged. Thus, the basis for calculating penalties may be late payment, unpaid amount of the obligation, the entire amount of the obligation, the full price of the contract, etc.

Example 1 According to the terms of the supply agreement, payment for the delivered goods must be made within 5 banking days after delivery of the goods. Goods with a total cost of 2,000 rubles. was delivered on March 30, 2021. Accordingly, payment should have been made no later than April 6, 2021 (the deadline for fulfilling the obligation under the contract is calculated in bank days, i.e., in working days). The first day of delay is April 7, 2021. On April 10, 2021, the buyer made a partial payment in the amount of 300 rubles. In accordance with the terms of the contract, for late payment for goods, the buyer is obliged to pay the seller a penalty in the amount of 0.2% of the payment not paid on time for each day of delay. The basis for calculating penalties is an unpaid payment, therefore the number of days of delay is calculated from the first day of delay of the entire amount of the obligation until the date of payment of each payment.

Thus, the total amount of the penalty is 186 rubles.

Example 2 Under a supply agreement, on February 6, 2021, goods were delivered with a total cost of 4,500 rubles. According to the terms of the agreement, payment must be made no later than February 8, 2017. The first day of delay is February 9, 2021. On March 15, 2021, the buyer made a partial payment in the amount of 150 rubles, on March 22, 2017, the buyer made a partial payment in the amount of 200 rub. In accordance with the terms of the contract, for untimely or incomplete transfer of funds within the terms stipulated by the contract, the buyer pays the supplier a penalty in the amount of 0.15% of the cost of the goods not paid on time for each day of delay. Based on the terms and conditions formulated in the contract on the grounds and rules for calculating the penalty, the latter in this case is current. The basis for calculating the penalty is the cost of the goods not paid on time, therefore the number of days of delay is calculated based on the periods of delay from payment to payment. The cost of unpaid goods is reduced after each payment.

Thus, the total amount of the penalty is 711.45 rubles.

2) A fine is a penalty that is paid in a fixed amount for a specific violation and does not depend on the length of the period of delay in fulfilling the obligation.

The fine can be determined in a specific monetary amount or as a percentage of a certain “base” from which it is calculated.

In the latter case, the fine is calculated using the formula:

The amount on which the basis of the fine is determined X the fine rate

Example: On May 22, 2021, goods worth RUB 1,800 were delivered. Payment was due no later than May 24, 2021. Buyer did not make payment. According to clause 10.5 of the contract, for violation of the payment deadline established in the specification, the buyer pays the supplier a fine in the amount of 10% of the amount not paid on time. Calculation of the fine as of May 30, 2021: 1,800 (unpaid amount) x 10% = 180 rubles. Thus, the fine for violating the terms of payment for goods will be 180 rubles.

In general, the division of penalties into fines and penalties has been developed by contractual practice and is conditional. In Art. 311 of the Civil Code, the terms “forfeit”, “fine”, “penalty” are mentioned as synonyms. The term used in the contract to denote a penalty (forfeit, fine or penalty) does not predetermine the procedure for its calculation.

Thus, the parties can define a penalty in an agreement as a fine, but establish the procedure for its calculation as a current (moratorium) penalty, or, conversely, define the measure of liability as a penalty, but at the same time establish its amount in a fixed monetary amount. For this reason, when calculating a penalty, it is necessary to be guided by the rules for its calculation established in legislation or in the contract, and not by the term used to designate the type of penalty.

Penalty and interest for using someone else's money

In case of delay in fulfilling a monetary obligation, the creditor on the basis of Art. 366 of the Civil Code has the right to demand payment of interest for the use of other people’s funds (hereinafter referred to as interest) for the entire period of improper fulfillment of obligations.

By their legal nature, interest is of an offset nature in relation to losses (clause 2 of Article 366 of the Civil Code).

How do interest and penalties relate?

According to Part 2, Clause 6 of the Resolution of the Plenum of the Supreme Economic Court of the Republic of Belarus dated January 21, 2004 No. 1 “On some issues of application of the norms of the Civil Code of the Republic of Belarus on liability for the use of other people’s funds” (hereinafter referred to as Resolution No. 1), along with the calculation of interest on based on Art. 366 of the Civil Code, legislation or an agreement may provide for the debtor’s obligation to pay a penalty (penalty) for late fulfillment of a monetary obligation.

Thus, the law allows for the simultaneous collection for non-fulfillment or improper fulfillment of monetary obligations of both the penalty provided for by law or contract, and interest for the use of someone else’s money.

At the same time, by virtue of clause 28 of Resolution No. 1, provided for in clause 1 of Art. 366 of the Civil Code, interest is payable only on the corresponding amount of funds (the original amount of the principal obligation). No interest is accrued on the amount of the penalty or interest for the use of other people's funds.

How to collect a penalty?

Payment of the penalty is possible voluntarily, but this is a fairly rare occurrence. As a rule, creditors must apply to a court or other jurisdictional body to collect liquidated damages.

A claim for the collection of a penalty can be filed either together with the amount of the principal debt, or after collection (payment) of the principal debt. The collection of a penalty is not allowed if the amount of the principal debt has not been repaid or collected.

Compulsory collection of penalties is possible in the following ways:

By making a notary's writ of execution.

Applying to a notary for a writ of execution is the most expeditious way to collect a penalty, since, as a rule, a notary makes a writ of execution on the day of application.

To collect a penalty by making a notary's writ of execution, such a possibility must be provided for by legislative acts.

By virtue of clause 1 of Decree of the President of the Republic of Belarus dated August 11, 2011 No. 366 “On some issues of notarial activity” (hereinafter referred to as Decree No. 366), notaries, in compliance with the procedure and conditions provided for by legislative acts, make executive inscriptions on the requirements of legal entities (individual entrepreneurs ) on the collection of debt under contracts of purchase and sale, supply, contract, transportation, paid services, storage, penalties (fine, penalty) in connection with such debt, if its payment is provided for by law or an agreement recognized by the debtor in writing.

It should be borne in mind that it is possible to collect a penalty for improper performance of the mentioned contracts only if it is acknowledged in writing by the debtor, but not paid.

However, Decree No. 366 also provides for cases when the collection of a penalty on the basis of a writ of execution is carried out regardless of its recognition by the debtor - for example, when collecting a penalty for improper execution of a loan agreement.

By order of production.

Writ proceedings are a simplified procedure for debt collection in court. Based on the results of the process, the court makes a decision (makes a ruling on a court order) without trial or calling the parties, on the basis of the documents submitted at the request of the claimant (Part 1 of Article 220 of the Code of Criminal Procedure).

You can apply for the collection of a penalty in the order of writ proceedings, provided that it is impossible to collect it by making a notary’s writ of execution.

The claimant's demands must be indisputable (based on documents confirming the debt) or recognized (not disputed) by the debtor, but not fulfilled (Part 2 of Article 220 of the Code of Criminal Procedure).

By way of claim proceedings.

Collecting a penalty through a claim proceeding is the longest in comparison to other methods. The state duty paid when filing a statement of claim in court is significantly higher than the state duty paid when applying to court in the order of writ proceedings, or the costs of making a writ of execution by a notary.

Collection of a penalty in the course of legal proceedings if there are grounds for this (failure by the defendant to fulfill obligations, the presence of liability established in legislation or in a contract in the form of a penalty for a given violation, etc.) is carried out by the court on the basis of studying the circumstances of the case and evidence, regardless of agreement or disagreement debtor.

How can the court reduce the penalty?

In accordance with Part 1 of Art. 314 of the Civil Code, if the penalty payable is clearly disproportionate to the consequences of violation of the obligation, the court has the right to reduce the penalty.

The parties do not have the right by their agreement to provide for a prohibition on reducing the penalty; such a provision of the contract, if present, is void.

Reduce the penalty on the basis of Art. 314 of the Civil Code, the court has the right to consider a claim for the recovery of a penalty in the manner of claim proceedings. The notary has no right to reduce the penalty, nor does the court when considering a claim for the collection of the penalty through writ proceedings.

The penalty may be reduced at the request of the debtor or at the initiative of the court. When filing a petition, the debtor is obliged to justify the disproportion of the penalty to the consequences of violation of the obligation.

The issue of reducing the penalty, as a rule, is considered by the court of first instance, but consideration of this issue by higher authorities is also allowed. By virtue of clause 3 of the Resolution of the Presidium of the Supreme Economic Court of the Republic of Belarus dated 08.08.2002 No. 24 “On some issues of application by economic courts of Article 314 of the Civil Code of the Republic of Belarus” (hereinafter referred to as Resolution No. 24), a higher court has the right to apply Art. 314 of the Civil Code only in the case where the interested party indicates in the complaint the rejection of a request to reduce the penalty or its reduction at the request of a party or on its own initiative by the court of first instance as an incorrect application (significant violation) of the rule of substantive law.

If the application for application of Art. 314 of the Civil Code was not declared in the court of first instance and the court of first instance did not reduce the penalty on its own initiative, then the higher court has no legal basis for reducing the penalty.

Reduction of the penalty is possible only before it is paid. If the penalty has already been voluntarily paid by the party, then it is impossible to demand its reduction from the court.

Based on Art. 314 of the Civil Code, both legal and contractual penalties can be reduced. At the same time, according to Part 3 of Art. 314 of the Civil Code, legislative acts may provide for cases when the penalty is not subject to reduction.

The legislation does not establish the limits for the court to reduce the penalty. In each case, the court determines to what extent (to what limits) the penalty should be reduced.

The basis for reducing the penalty is its obvious disproportion to the consequences of failure to fulfill the obligation. That is, in order to make a decision to reduce the penalty, the court must correlate the amount of the penalty, correctly calculated based on the circumstances of the case in a particular case, with the consequences of failure to fulfill obligations.

The criteria for establishing disproportionality in each specific case may be an extremely high percentage of penalties established in the contract; a significant excess of the amount of the penalty over the amount of possible losses (including an excess of the amount of the penalty over the amount of the unrepaid debt); short period of fulfillment of the obligation, etc. (clause 4 of Resolution No. 24).

When deciding on the reduction of the penalty, the court may take into account the actions of the parties aimed at the voluntary pre-trial settlement of the dispute regarding the collection of the penalty, for example, whether there was a response to the claim, whether the defendant previously stated reasonable objections in writ proceedings (clause 5 of the resolution of the Plenum of the Supreme Economic Court of the Republic Belarus dated May 27, 2011 No. 7 “On the court decision”).

In addition, when resolving the issue of reduction, the court may take into account the interest charged for the use of other people's funds, which compensate to a certain extent the consequences caused by the violation of a monetary obligation by the debtor (clause 6 of Resolution No. 1).

However, the penalty cannot be reduced due to the difficult financial situation of the defendant, the delay in the fulfillment of obligations to him by his debtors, the refusal of the guarantor to pay the plaintiff the amount of the requested debt, large accounts payable, arrears to the budget, seizure of his current account, etc. d. (Clause 5 of Resolution No. 24).

Reducing the penalty does not deprive the debtor of the right to reduce the amount of liability on the basis of Art. 375 of the Civil Code and the creditor’s right to compensation for losses in accordance with Art. 365 Civil Code.

The issue of reducing the penalty is decided by the court in its decision on the case. Reasons for applying Art. 314 of the Civil Code and reductions in penalties are given in the reasoning part of the court decision. In the operative part, the court refuses to satisfy the claim for the recovery of a penalty in the relevant part.

At the same time, the court’s reduction of the penalty does not affect the order of legal expenses in proportion to the satisfied requirements, enshrined in Part 1 of Art. 133 COD. So, in accordance with sub. 16 clause 10 of the resolution of the Plenum of the Supreme Economic Court of the Republic of Belarus dated May 27, 2011 No. 8 “On some issues of application by economic courts of the legislation on state duty” when the economic court reduces the amount of the penalty (fine) on the basis of Art. 314 of the Civil Code, the plaintiff’s expenses for paying the state duty are subject to reimbursement by the defendant based on the amount of the penalty that would have been collected without its reduction.

Accrual period

The penalty begins to accrue from the moment the delay begins, that is, from the next day after the day on which the obligation under the contract should have been fulfilled. The moment of determining the end of the collection period raises many questions; it all depends on the legal relations that have developed between the parties. As a general rule, a penalty is accrued until the full fulfillment of obligations under the contract by the person who violated the terms of the agreement, regardless of the moment of termination of the agreement.

If it is determined at the legislative level or separately agreed upon by the parties that the sanction is collected from the moment of termination of the agreement or contract, the penalty is collected until this moment. Plenum of the Supreme Court No. 7 of March 24, 2016 connects the moment of termination of collection with the moment of termination of the main obligation under the contract.

If, for example, the parties have agreed that their contractual obligations will cease entirely upon expiration of the contract, the penalty will be calculated on the day that is the expiration date of the agreement. Judicial practice (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation in case No. 8171/13, which was adopted on November 12, 2013) indicates that termination of obligations to return the penalty accrued under the contract is also possible through compensation, novation or debt forgiveness.

How to draw up a claim and submit it to court

Rules for filing a claim for a penalty:

it is necessary to calculate the amount of the sanction;
if there is a condition on a mandatory preliminary claim procedure, fulfill it;
Having received a refusal or not receiving a response, go to court in compliance with the rules of jurisdiction and jurisdiction;
To do this, it is necessary to formulate a statement of claim in accordance with the requirements of the relevant procedural regulatory documents, pay the state fee and collect the evidence base.

Reduction rules

The court may reduce the amount of the penalty for failure to fulfill obligations under the contract on the basis of Art. 333 of the Civil Code of the Russian Federation - for this purpose a petition is submitted. This is one of the legal ways to prevent abuse of rights when freely determining the terms of an agreement.

A reduction is allowed only in exceptional cases in the presence of the following circumstances:

the amount of the penalty is equal to or exceeds the amount of the principal debt;
the sanction percentage clearly exceeds the market rate for short-term loans;
there is reason to believe that the interested party delayed going to court in order to increase the amount of liability.

Difficult financial situation, seizure of the debtor's property, non-payment of amounts under concluded agreements or from the budget are not grounds for reduction.

On what basis is the penalty calculated?

How to determine a penalty? The best option is to calculate it based on the Central Bank refinancing rate. The lender can determine the penalty independently, but in this case there are risks. In particular, the debtor can challenge the accrued penalty on the basis of Article 333 of the Civil Code. The refinancing rate is calculated depending on the following factors:

Amount of debt. The larger the debt, the greater the fine will be.
Currency in which the loan was taken out. Debtors who previously took out loans in dollars were faced with the problem of rapidly growing debts due to the rise in currency prices.
The issuing bank that sets the refinancing rate.

In case of determining the amount of a legal penalty, the official rate of the Central Bank is used for calculation.

The fine can be calculated in the following ways:

Calculation of the number of days of missed deadlines . This is the most popular way to determine penalties. The fine varies depending on how many days the debtor fails to pay the debt.
Determining the cost of debt . The fine is calculated based on the amount of debt.

Penalties may be accrued daily. For example, 0.2% of the total debt is added every day.