Payment of forfeit as a legal consequence of the breach of obligations by the parties under the vehicle hire agreement

Abstract

Problem setting. One of the legal consequences of the breach of obligations (including vehicle hire agreement) is payment of forfeit is both a way to enforce commitments and extent of civil liability and civil rights remedy

Despite the fact that a significant amount of research has been devoted to the study of forfeit, the legislation governing the issue of forfeit in relation to vehicle hiring is imperfect and needs to be amended accordingly.

Analysis of resent researches and publications. The issue of payment of forfeit as a legal consequence of a breach of contractual obligations has been studied by legal scholars in various respects. Basic research in this area has been conducted by A. Karapetov, K. Hrave, O. Ioffe, N. Maliein, V. Raikher, M.Brahinskyi, V.Vitrianskyi, R.Stefanchuk, O. Otradnova, I. Puchkovska, N. Raskazova, and others.

At the same time, the issue of forfeit application as a result of violation of legal obligations under the vehicle hire contract was given insufficient attention, and thus the matter is urgent and requires further investigation.

Target of research. The purpose of this paper is a general study and analysis of forfeit as a legal consequence of breach of obligations by the parties under the vehicle hire agreement.

Article’s main body. The article provides general study and analysis of forfeit as a result of violation of obligations under the vehicle hire contract, as well as the grounds for its establishment. The provision is substantiated that at the stage of normal course of the obligation under the vehicle hire agreement forfeit performs only a security function, and it becomes the extent of civil liability only after the breach of the obligation by one of the parties whose obligation was secured by forfeit. The shortcomings of the current legislation dealing with the issue of legal regulation of forfeit, which is applied in case of breach of their obligations by the parties under the vehicle hire agreement, have been identified.

Conclusions and prospects for the development. Forfeit, established by Part 2 of Article 785 of the Civil Code of Ukraine for delay by the lessee of the obligation to return the vehicle to the lessor in the amount of double payment for the use of the thing during the delay is essentially a fine, as calculated from the amount of unfulfilled or improperly fulfilled obligation – fees for the possibility of using the vehicle for the relevant period (hire fees).

When deciding which type of forfeit to establish in the contract (fine or penalty), the parties to the vehicle hire contract should proceed from the fact that the type of forfeit applied should correspond to the essence of the obligation for violation of which it is established.