DAMAGES AND COLLECTION OF PENALTY

Compensation for damages and forfeiture are important concepts in the field of management, as they allow compensating for damage caused to enterprises due to breach of contracts, improper performance of obligations or negligence. In addition, they play an important role in stimulating the implementation of commercial contracts and improving production efficiency. And this, in turn, guarantees the protection of the rights of business entities, with the help of which the stability of economic turnover is achieved. In this article, we will consider the features of collecting a penalty and compensation for damage under Ukrainian law.

In Ukraine, the legal system allows compensation to be awarded to businesses that suffer losses. The Civil Code of Ukraine provides that compensation for damage is damage caused to property, health and other rights of both individuals and legal entities. In addition, the Economic Code of Ukraine determines that a person who does not fulfill economic obligations or violates established requirements is obliged to compensate for the damage caused to another person whose rights and interests have been violated.

Compensation for harm in economic relations has several features:

• The first is that – if the party to the obligation could have prevented the damage on its own, but did not do so, then it is not entitled to compensation for losses;
• The second feature is that a participant in economic relations who has violated a monetary obligation is not released from liability and must compensate for the damage and pay a fine;
• The third feature is the right of recourse, when the participant who has compensated for the damage can recover it from third parties;
• Fourth – joint and several compensation for damage, when several participants in economic relations simultaneously caused damage and each of them is obliged to compensate them;
• Finally, the last feature is that the person who caused the damage must compensate not only the cost of the lost property, but also additional costs and lost profits.

In addition, compensation for harm under Ukrainian law is determined on the basis of evidence and the actual state of the case, and can also be carried out voluntarily or through a court decision.

With regard to the recovery of a penalty, the following should be noted.

The practice of applying a penalty in economic relations is based on the provisions of the Civil Code of Ukraine, and not the Commercial Code of Ukraine, since the latter does not contain definitions of such concepts as a penalty, a fine and a penalty.

According to the Civil Code, a penalty is a sum of money that a participant in economic relations is obliged to pay as a penalty in case of violation of the rules for carrying out economic activities, non-fulfillment or improper fulfillment of economic obligations.

According to Part 1 of Art. 230 of the Commercial Code of Ukraine, the penalty is an independent type of penalty, different from fines and penalties. At the same time, when concluding an agreement, the parties may establish their own conditions regarding the types and amounts of penalties applied for non-fulfillment or improper fulfillment of economic obligations. In addition, the recovery of a penalty (fine, penalty) does not give the debtor the right to evade the fulfillment of the main obligation. This commitment continues.

In addition, the application of other types of penalty, except for fines and penalties, is possible, but this must be provided for in the contract or legislation. In turn, the penalty is an independent measure of responsibility, which can be applied both along with penalties and independently. Such application is not considered double liability for the same offense, since liability occurs only once – in the form of payment of a penalty, which may include various types of sanctions, including fines and fines.

Thus, the penalty performs the function of ensuring the fulfillment of obligations under the contract and forces the parties to comply with its terms.

If you have any problems with compensation for damages or recovery of a penalty in the field of management, contact the law firm “Prikhodko and Partners” for qualified and professional assistance. Our lawyers are always ready to provide high-quality legal services and protect your interests in any legal proceedings, as they have relevant experience. So don’t hesitate and get in touch!