Die Vertragsstrafe im georgischen Recht

Abstract

Contractual Penalties under Georgian Law With the development of contractual relations in Georgia, it has become more common for the parties of a contract to include conditions of a penalty in their agreement. Georgia, as a member of the continental law family, actively shares the European experience and executes the guidance of individual institutions. One proof of this fact is the inclusion of penalties in the Civil Code and its practical realization, which is characterized by interesting explanations in court. Penalty, as an additional means of securing a demand, has an accessory nature. It has predominantly a penalty (sanctioned) function that is completely independent of the damage inflicted. Thus, a penalty claim does not preclude a claim for damages. Unlike the legislation of some countries, the Civil Code of Georgia requires that the penalty must be expressed only in monetary form, which shall be written in the contract. There are two types of penalties: legal and contractual. In both cases, penalty request can be reached for breach of contractual obligation. Penalty, in Georgian Law can be expressed in different forms. In this respect, particularly selective is the so-called cumulative penalty, where the requirement to pay a fine together with the performance of the obligation is provided (preferably for a breach of the term). In contrast to the German Civil Code, the legislation does not know of Revocation in return for the forfeit money concept. One part of the thesis relates to this issue - it states that in spite of the absence of legal provisions, considering the principle of freedom of contract, its use is permitted in Georgian reality. The principal importance of the existence of these two institutions is mainly due to Article 420 of the Civil Code of Georgia: under that provision, the court may reduce the penalty to a reasonable amount, while it cannot reduce Revocation in return for forfeit money. Against the background of activating foreign (especially German) businesses and interest in Georgia, a number of agreements are concluded, whose part is from Georgia, or where the contract is based on Georgian law. In this regard, it is advisable that the contractor be more aware with regard to possible legal consequences in the case of future demand.