Penalty or interest under article 395: what to claim from the debtor
For late payment, you can collect a contractual penalty or interest at the key rate. At the same time, it is usually impossible. We understand what is more profitable and how to count.
Published:
Updated:
The buyer didn't pay on time. In addition to the debt, you can charge for delay. The law provides two tools: penalty and interest for the use of other people's money.
What is the difference?
| Penalty. | Interest under article 395 | |
|---|---|---|
| Where does it come from? | contract or law | From the law, a condition in the contract is not necessary |
| Size | What is agreed upon: usually 0.1% per day | Key rate of the Bank of Russia for each day |
| Form | Only a written condition | Always accruing. |
| Court reduction | Possible under article 333 | Not below the key rate. |
Penalty is the amount that the debtor is obliged to pay for the violation, according to the condition of the contract (Article 330 of the Civil Code). The agreement must be in writing, otherwise it is invalid (Article 331).
Interest under Article 395 is a measure in the event that no penalty has been agreed. Their size is tied to the key rate that was in effect on each of the days of delay.
Can we recover both?
As a general rule, no. If the contract establishes a penalty for late payment, interest under article 395 is not accrued (paragraph 4 of this article). An exception is if the contract expressly permits both to be claimed.
This means that the choice is made not at the time of delay, but at the signing of the contract: there is a condition for a penalty - it is valid, no - interest applies.
Which is better.
Compare rates in annual terms. Penalty 0.1% per day is 36.5% per annum. Interest on article 395 is equal to the key rate; its current value and history are shown by the page Bank of Russia key rate.
While the key rate is below 36.5%, a penalty of 0.1% per day gives more. But it has a risk: the court has the right to reduce it if the debtor declares disproportionate. The court will not reduce interest under Article 395 below the key rate.
How to count
Interest under article 395 for a one-rate period:
debt × key rate × days of delay / number of days per year / 100
When the rate during the period of delay changed, the period is divided into parts and count each separately. Partial payment reduces the base from the next day.
Percentage penalty per day: debt × penalty rate × days of delay / 100.
The first day of delay is the next day after the last day of payment. If this last day falls on a weekend, the period is postponed to the next working day.
Calculation by periods with the history of the bet will do Penalty and interest calculator: the result can be attached to claims.
When the court reduces the amount
A penalty accrued to a company or an entrepreneur shall be reduced by the court only on the application of the debtor and only if it is clearly disproportionate to the consequences of the violation (Article 333). The debtor must prove disproportionateness. The rate of 0.1% per day is usually considered normal for business.
Frequent questions
Until what day are interest and penalties charged?
On the day of actual payment inclusive, unless the contract limits the term or amount. In the claim, you can ask to recover the amount on the date of the decision and then until the date of payment.
Do I have to make a claim against the claim?
Better say it. The Supreme Court considers the pre-trial order complied with and for penalty, if the claim was declared the principal debt, but the requirement with the calculation removes the unnecessary dispute. More in the article Pre-trial claim for payment: term, procedure and what to write in it.
Are interest charged on the advance if the goods are not delivered?
Yes, for the amount of advance payment that the seller must return - from the moment when he had an obligation to return it, unless the contract provides otherwise.
What is the legal interest under Article 317.1?
It is a payment for the use of money, not a liability. They are accrued only when it is expressly provided by law or contract.
