Article 409 of the RA Civil Code provides that the debtor having violated an obligation shall be obliged to compensate the damages caused to the creditor.
When determining the damages, the prices in effect in the place where the obligation should have been fulfilled, on the day of voluntary satisfaction of the creditor’s claim by the debtor, shall be taken into account, and where the claim has not been satisfied the prices in effect on the day of making the court judgment shall be taken into account, unless otherwise provided for by law, other legal acts or contract.
When determining the lost benefit, the measures taken by the creditor for recovering it and the preparations made to that end shall be taken into account.
Where a default penalty is prescribed for the failure to fulfil or improper fulfilment of an obligation, the damages shall be compensated for the portion not covered by the default penalty.
Cases may be envisaged by law or contract, where:
1) it is permitted to levy only the default penalty, but not for the damages;
2) the damages may be levied for in the full amount, not including the default penalty;
3) either the default penalty or the damages may be levied upon creditor’s choice.
In cases where limited liability is established for the failure to fulfil or improper fulfilment of an obligation, damages subject to compensation in part not covered by the default penalty or in addition thereto or instead of it may be levied for within the scope established by such limitation.
In cases of illegally holding another person’s monetary means, avoiding to return them, using them through other payment default or unjust receipt on another person’s account or saving thereof, interests shall be charged with respect to that amount.
Interests shall be calculated from the day of default until the day of the termination of the obligation
The procedure envisaged by this point shall be in force, unless another amount of damage compensation or interest is not envisaged by law or contract. Where another size of damage compensation or interest is envisaged by law or contract for a certain time period, the procedure envisaged by this point shall not apply only during the given time period.
The bank interest rate shall be set by the Central Bank of the Republic of Armenia for the dram of the Republic of Armenia and for those foreign currencies by which the Central Bank of the Republic of Armenia performs operations in the Republic of Armenia
The interests for the use of others’ means shall be levied until the day of payment to the creditor of the sum of those means, unless a shorter period for accrual of interests is established by contract.
In case of improper fulfilment of an obligation, the payment of default penalty and the compensation of damages to the creditor shall not release from the fulfilment of the obligation in kind.
Yevgenia Hambardzumyan
