Abstract

In the light of the Supreme Court judgement of 8 February 2013, if a contractual penalty has been reserved for debtor’s default in providing the performance, that penalty may not be charged in case of an actual delay alone. Default constitutes a qualified form of delay, since it takes place when the delay is a result of circumstances under debtor’s control. The general rules of contractual liability provide that liability rises when the debtor fails to perform or inappropriately performs his obligations as a result of circumstances that are under debtor’s control. The author of the gloss, while approving of the Supreme Court decision, is of the opinion that owing to its compensatory function a contractual penalty is due to the creditor in those cases which substantiate compensatory liability according to the general rules. Therefore, if a contractual penalty has been reserved for default, in the absence of a separate agreement thereto it is unjustified to automatically charge it in a situation of an “ordinary” delay only. The author also notes the fact that the wording of Art. 42.5 of the Public Finance Act mobilizes public finance sector units to charge and seek contractual penalties, in particular in the context of facing possible liability for infringement of public finance discipline in case nonfeasance.