Chapter 25. Responsibility for violation of obligations.

Article 393. The duty of the debtor to pay damages.
1. The debtor shall be obliged to compensate the creditor for losses caused by the failure to perform or improper performance of the obligation. 2. Losses shall be determined in accordance with the rules provided for in Article 15 of this Code. 3. Unless otherwise provided by law, other legal acts or a contract, in determining damages, prices that existed in the place where the obligation was to be performed are taken into account on the day of voluntary satisfaction of the creditor’s claim by the debtor, and if the claim was not satisfied voluntarily, - on the day of submission of the claim. Judging from the circumstances, the court can satisfy the claim for damages, taking into account the prices that exist on the day of the judgment. 4. In determining the loss of profit, the measures taken by the creditor to receive it and the preparations made for this purpose shall be taken into account.

Article 394. Losses and penalties.
1. If a penalty has been established for non-performance or improper performance of an obligation, the losses are reimbursed in the part not covered by the penalty. The law or the contract may provide for the following cases: when only penalties are allowed, but not damages; when damages can be recovered in full in excess of the penalty; when at the option of the creditor either a penalty or damages can be recovered. 2. In cases where limited liability (Article 400) is established for non-performance or improper performance of an obligation, damages that are subject to compensation in the part not covered by the penalty or above or in lieu of it may be recovered to the limits specified by such restriction.

Article 395. Responsibility for the default of a monetary obligation.
1. For using other people's funds as a result of their unlawful withholding, evasion of their return, other delay in their payment or unjustified receipt or savings at the expense of another person, interest on the amount of these funds shall be paid. The amount of interest is determined by the creditor existing in the residence of the creditor, and if the creditor is a legal entity, at its location the discount rate of bank interest on the day of the fulfillment of the monetary obligation or its corresponding part. When collecting a debt in court, the court may satisfy the creditor’s claim on the basis of the discount rate of bank interest on the day the claim is filed or on the day the decision is rendered. These rules apply if a different interest rate is not established by law or by contract. 2. If the losses caused to the creditor by unlawful use of his funds exceed the amount of interest due to him in accordance with clause 1 of this article, he shall have the right to demand compensation from the debtor in excess of this amount. 3. Interest on the use of foreign funds shall be charged on the day of payment of the amount of these funds to the creditor, unless a law, other legal acts or the contract provide for a shorter period for calculating interest.

Article 396. Responsibility and fulfillment of obligations in kind.
1. Payment of penalties and damages in the event of improper performance of the obligation does not release the debtor from the performance of the obligation in kind, unless otherwise provided by law or contract. 2. Compensation of losses in the event of non-performance of an obligation and payment of a penalty for its non-performance release the debtor from performance of an obligation in kind, unless otherwise provided by law or contract. 3. The refusal of the creditor to accept the performance, which due to the delay has lost interest for him (clause 2 of article 405), as well as payment of the penalty set as a compensation (clause 409), frees the debtor from performance of the obligation in kind.

Article 397. Fulfillment of an obligation at the expense of the debtor.
If the debtor fails to fulfill the obligation to manufacture and transfer the property into ownership, economic management or operational management, or to transfer the property for use to the creditor, or perform certain work for it or provide it with a service, the creditor has the right to charge the third party with an obligation for a reasonable price or perform it on its own, unless otherwise provided by law, other legal acts, contract or substance of the obligation, and to demand from the debtor compensation for the incurred necessary work strokes and other damages.

Article 398. Consequences of non-fulfillment of the obligation to transfer an individually-defined thing.
In the event of non-fulfillment of the obligation to transfer an individually-determined thing to the property, economic management, operational management or to the use of the creditor for value, the latter has the right to demand that the debtor be taken away from the debtor and transferred to the creditor under the conditions stipulated by the obligation. This right disappears if the item has already been transferred to a third party who has the right of ownership, economic management or operational management. If a thing has not yet been transferred, the advantage is that of the creditors, in whose favor the obligation arose earlier, and if it cannot be established, the one who had previously filed a lawsuit. Instead of the requirement to transfer to him the thing that is the subject of the obligation, the creditor has the right to demand compensation for damages.

Article 399. Subsidiary liability.
1. Before filing claims to a person who, in accordance with the law, other legal acts or the terms of the obligation, is liable in addition to the responsibility of another person who is the main debtor (subsidiary liability), the creditor must make a claim on the main debtor. If the principal debtor has refused to satisfy the creditor’s claim or the creditor has not received a response from him within a reasonable time, the claim may be submitted to the person bearing subsidiary liability. 2. The creditor shall not have the right to demand satisfaction of his claim to the principal debtor from the person bearing subsidiary liability, if this claim can be satisfied by offsetting the counterclaim to the principal debtor or unquestionably collecting funds from the principal debtor. 3. The person bearing subsidiary liability must, prior to the satisfaction of the claim made by the creditor, notify the principal debtor of this, and if such a person is sued, the main debtor should be involved in the case. Otherwise, the principal debtor has the right to put forward against the regress claim of the subsidiary person, the objections that he had against the creditor.

Article 400. Limitations on liability for obligations.
1. For certain types of obligations and for obligations related to a specific type of activity, the law may restrict the right to full compensation for losses (limited liability). 2. An agreement on limiting the extent of liability of a debtor under an agreement of accession or another agreement in which a citizen acting as a consumer is a creditor is void if the amount of liability for this type of obligation or for this violation is determined by law and if the agreement is concluded before the occurrence of liability for failure or improper performance of the obligation.

Article 401. Grounds for liability for breach of obligation.
1. A person who has not fulfilled an obligation or who has performed it improperly shall be liable if there is guilt (intent or negligence), unless the law or the contract provides for other grounds for liability. A person is deemed to be innocent, if, with the degree of care and diligence that was required of him according to the nature of the obligation and the conditions of circulation, he took all measures to properly fulfill the obligation. 2. The absence of guilt is proved by the person who violated the obligation. 3. Unless otherwise provided by law or contract, a person who has not fulfilled or improperly fulfilled an obligation in carrying out entrepreneurial activities shall be liable unless he proves that proper execution was impossible due to force majeure, that is, extraordinary and unavoidable circumstances under the given circumstances. Such circumstances do not include, in particular, breach of obligations by the counterparties of the debtor, the lack of goods on the market necessary for the execution, the lack of the necessary funds by the debtor. 4. An agreement concluded in advance on the elimination or limitation of liability for an intentional violation of an obligation is void.

Article 402. The responsibility of the debtor for its employees.
The actions of the employees of the debtor in the performance of his obligations are considered the actions of the debtor. The debtor is responsible for these actions if they resulted in non-performance or improper performance of the obligation.

Article 403. The responsibility of the debtor for the actions of third parties.
The debtor is responsible for the failure to fulfill or improper performance of the obligation by third parties to whom the execution was entrusted, unless it is established by law that the third person who is directly responsible is liable.

Article 404. Wines of a creditor.
1. If non-performance or improper performance of the obligation occurred through the fault of both parties, the court accordingly reduces the size of the liability of the debtor. The court also has the right to reduce the size of the debtor’s liability if the creditor intentionally or through negligence contributed to the increase in the amount of damages caused by non-performance or improper performance, or did not take reasonable measures to reduce them. 2. The rules of clause 1 of this article shall also apply accordingly in cases where the debtor, by virtue of a law or contract, is responsible for the non-performance or improper performance of an obligation regardless of his fault.

Article 405. The delay of the debtor.
1. A debtor who has delayed execution shall be liable to the creditor for damages caused by the delay, and for the consequences of the impossibility of execution which happened by chance during the delay. 2. If, as a result of the delay of the debtor, the performance has lost interest for the creditor, he may refuse to accept the performance and claim damages. 3. The debtor shall not be considered delayed until the obligation can be discharged due to the delay of the creditor.

Article 406. Delay of a creditor.
1. A creditor is deemed delayed if he refused to accept the proper performance proposed by the debtor or did not perform the actions provided for by law, other legal acts or contract, or arising from business practice or from the substance of the obligation, before which the debtor could not fulfill his obligation. The lender is also deemed delayed in the cases specified in paragraph 2 of Article 408 of this Code. 2. The delay of the creditor gives the debtor the right to compensation for damages caused by the delay, if the creditor does not prove that the delay occurred due to circumstances for which neither he himself nor those whose responsibility for the execution of the act was imposed by law, other legal acts or the creditor’s order , do not respond. 3. For a monetary obligation, the debtor is not obliged to pay interest for the period of delay of the creditor.

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