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Problematic Aspects in Reduction of Penalty by Russian Courts

The paper is devoted to the problem of application of Art. 333 of the Civil Code of the Russian Federation by Russian courts. The subject of the research is the common features of legal regulation, allowing for a penalty reduction. Formal legal and comparative legal methods, as well as the method of modeling legal situations were used in the course of the research. The study revealed a number of problems related to the correct application of the provisions of this article. An analysis of cases considered by Russian courts shows that the courts often reduce the penalty arbitrarily, without a clear justification of the motives. In order to improve this situation, it is proposed to supplement the Civil Code of the Russian Federation with Chapter 22.1, expanding the grounds for suspending the performance of an obligation, and to change the wording of Art. 333 of the Civil Code of the Russian Federation, excluding the possibility of reducing the penalty in legal relations related to the implementation of shared housing construction, as well as in other legal relations with the participation of a citizen-consumer in the event of a breach by an organization or an individual entrepreneur, except for cases of suspension of the obligation.