1. Introduction

The institution of a contractual penalty is a legal tool that simplifies the legal and factual situation arising when damage occurs as a result of non-performance or improper performance of a non-monetary obligation. Its compensatory function is, of course, also present—albeit somewhat hidden in plain sight. A contractual penalty can also serve to discipline, and even penalize, a contracting party.

However, this does not mean that contractual penalties are absolute. The debtor has a range of possible defenses available, both under general provisions and under specific regulations—including transport law and the CMR Convention. In the TSL (Transport–Forwarding–Logistics) industry, contractual penalties are common, and the proper use of the relevant legal mechanisms can determine the outcome of many cases.

2. Challenging the Basis of Liability

The primary defense against an unjust contractual penalty is to demonstrate that the conditions triggering the penalty have not been met. In simple terms, the “condition” of a contractual penalty is the description of a situation which, if it occurs in reality, authorizes the creditor to impose the penalty, e.g.:

“(…) if the carrier does not arrive for loading on 31 February 2027, then (…)”

In such a case, it must be shown that the condition was not fulfilled—i.e., that the carrier did in fact arrive for loading on that day, assuming, of course, that this was the agreed loading location and not some arbitrary warehouse chosen by the carrier.

If a contractual penalty is being imposed, it should be assumed that the creditor has evidence supporting its application. In such a situation, one should carefully analyze the structure of the penalty clause and assess whether its wording allows for a more favorable interpretation. It is worth remembering that any ambiguity is interpreted against the party that drafted the contract, and in the TSL sector such contracts are typically imposed by the customer.

In this context, attention should be paid to the purpose of the contractual penalty and the interest it is intended to protect.

Furthermore, under Article 471 of the Polish Civil Code (aside from exonerating circumstances provided in the CMR Convention or transport law), if the carrier proves that the damage or delay resulted from circumstances for which it is not responsible, there are no grounds to attribute liability to it, and consequently no basis for imposing a contractual penalty.

3. Claim of Conflict with Mandatory Provisions of Law

Another form of defense is to argue that the contractual penalty clause is invalid, including on the basis of Article 58 of the Civil Code. In broadly understood transport law, mandatory provisions significantly limit contractual freedom.

Article 41 of the CMR Convention provides that any provisions directly or indirectly violating the Convention are null and void. A classic example is a contractual penalty imposed for delivery delays. Liability for delay is limited under Article 23(5) of the CMR to the amount of the freight charge. Contractual penalties that effectively bypass these limits and extend the carrier’s liability beyond what is permitted under the CMR are often successfully challenged as contrary to mandatory provisions. Similar limitations arise under domestic transport law.

The structure of a contractual penalty is also not arbitrary. This applies not only to its triggering conditions but also to its amount. The penalty must be either a fixed amount (e.g., €100 per day of delay) or defined by a clear calculation method (e.g., 1% of the freight per day of delay). However, caution is required: such a rate must generally be determinable already at the moment of contract conclusion.

It is not permissible to make the penalty dependent on the creditor’s discretion, e.g., stating that the penalty ranges from €100–€300 per day of delay.

In transport practice, vague clauses often appear, providing for a “penalty for delay” without clearly defining the starting point for calculation, how days are counted, or whether there is any cap (although such a cap is not always legally required). In such cases, the debtor may effectively argue that the lack of clarity prevents the application of the most restrictive interpretation.

4. Reduction of a Contractual Penalty

The final line of defense is to request a reduction (moderation) of the contractual penalty. Under Article 484 §2 of the Civil Code, if the obligation has been substantially performed or the penalty is grossly excessive, the debtor may request its reduction.

“Grossly excessive” occurs when there is a clear disproportion between the amount of the penalty and the extent of the breach and the creditor’s interest. When assessing this, the court considers, among other factors: the degree of fault, the actual consequences of the breach, and the type and amount of damage.

In transport practice, reduction plays an important role in cases where penalties are calculated as a percentage of the cargo value or the entire contract value, especially when the breach was incidental and did not cause any real harm to the client.

It is worth noting that reduction of contractual penalties is never guaranteed, as its application depends solely on the judge’s discretion. In practice, one may hope that the judge will be “convinced by the story” and grant protection.

Łukasz Strzelczyk
Legal Counsel at Trans Lawyers Law Firm

www.translawyers.eu