Law Firm ALTERNA´s partner and attorney-at-law Siret Siilbek wrote in her November´s legal blog about contractual penalty in case of exceeding the interim deadline.

Siret wrote about the recent decision of the Supreme Court, where there the contractor and the employer were disputing about  the legality of contractual penalty that was counted regarding exceeding the interim deadlines. As it often happens in practice, the employer kept asside to pay the contractor the latest invoices by submitting a claim of contractual penalty and offsetted it with the contractors request of remuneration.

Courts of first and second instances found that the contractual penalty counted from exceeding the interim deadlines was not in accordance with the principle of good faith because the contracting authority announced about the claim shortly before the final deadline.

The decision of the Supreme Court is important for resolving the current situation. Namely, the Supreme Court found that the argument about being in contradiction to the principle of good faith is not relevant. By assessing the legality of the claim, should be examined, whether the claim has been asserted during the time agreed in the contract or if there is none, then during the reasonable time. Of course, the earliest possible notification about the claims is allowed and welcome. At the same time, the creditor has the right to decide whether, when and at what extent he will use his claims – as long as the claim is in accordance with the contract and conditions coming from the legal acts. The claim asserted during the reasonable deadline cannot be in contradiction with the principle of good faith.


The blog’s post is avaliable here:

For further information, related to the article, please contact Siret by e-mail or by phone +372 680 6850