Premises and criteria for reducing the contractual penalty

Abstract

The possibility of requiring reduction is a structural feature of the contractual penalty. The legislator indicated two premises for the moderation, but did not specify any criteria for reducing the penalty. The court should do so taking into account all the circumstances of a given case, but also the basic functions of the contractual penalty. Reducing the amount of the penalty stipulated in the contract requires the debtor to provide specific factual and legal circumstances justifying the reduction. Proving them is also the responsibility of the debtor, although it is possible to alleviate this requirement, especially in the case of a slight amount or even no damage.