Admissibility of the provisions regarding the contractual penalty in the event of rescission of the contract due to a breach of a (non) pecuniary obligation

Abstract

The purpose of this article is to attempt to address the issue of the admissibility of stipulating a contractual penalty in the event of withdrawal from the contract in a situation where the basis for withdrawal is a breach of a pecuniary obligation. The analysis of this issue will be discussed based on the views of jurisprudence and doctrine. In the first part of the article, the concept of contractual penalty will be briefly characterized. The legislator’s intention was to establish a contractual penalty for damage resulting from improper performance or non-performance of a non-pecuniary obligation. The author discusses the controversies that have arisen in the jurisprudence regarding the possibility of stipulating a contractual penalty for withdrawal from the contract in the event of a breach of a pecuniary obligation. Two views lines have developed in the judicature on the issue. The first one is in a favor of the admissibility of such a legal figure on the basis of contractual freedom. The second view indicates that such contractual provisions are invalid as contrary to the mandatory regulation of Article 483 of the Polish Civil Code. the resolution of the Polish Supreme Court of November 20, 2019, clearly stating the inadmissibility of stipulating a contractual penalty in the event of withdrawal from the contract due to breach of a pecuniary obligation, is fundamental to these deliberations.