Abstract

An excessive amount of the contractual penalty is frequently a cause of disputes between the parties to a contract in which the penalty has been provided for. In most of the cases those disputes are resolved with the use of the contractual penalty limitation mechanism provided for in Art. 484 § 2 of the Civil Code. This article points out other potential measures which could make it possible for the court to intervene appropriately when the contractual penalty may be objectively considered as excessive. Moreover, it also tries to establish when a contractual penalty should in fact be considered as excessive. First of all, an attempt has been made whether the excessive amount of a contractual penalty may be determined by the relationship between several penalties provided for in a single contract.