Article 551(3) of the current Civil Code of Ukraine is an open-textured provision: it defines no criteria for reduction, sets no threshold for judicial intervention, and leaves unanswered the questions of how a reduction may be initiated, whether the right to judicial reduction may be contractually excluded, and how the special rule interacts with the general principles of Article 3 of the CCU. The gaps left by the legislature have been only partially filled by the Supreme Court’s case law. The article argues that Article 830 of the draft new Civil Code of Ukraine fails to resolve these three fundamental questions, and puts forward concrete legislative proposals to address them. The study is based on an analysis of Supreme Court practice for 2020–2025 and awards of the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry, as well as a comparative analysis of French, German, and transnational law (UNIDROIT Principles, PECL). Article 830 of the draft raises the threshold for judicial intervention and codifies certain criteria, but makes no explicit legislative choices on initiation, contractual exclusion, or the residual discretion available under Article 3 of the CCU. Comparative analysis shows that these questions have been resolved in most developed legal systems. The author proposes a two-tier model of judicial control over contractual penalties as a de lege ferenda model, together with five specific amendments to Article 830 of the draft, the adoption of which would enhance the predictability of the legal framework and align Ukrainian law with EU standards.

Authored books

1. Terré F, Simler P, Lequette Y, Droit civil: Les obligations (12éme éd., Dalloz 2018).

Journal articles

2. Raz J, ‘The Rule of Law and Its Virtue’ [1977] 93 Law Quarterly Review 195, 198–202.

3. Vasyliev V, Vysokyi rozmir neustoiky za porushennia umov dohovoru: svoboda samorehuliuvannia mainovykh tsyvilnykh vidnosyn chy porushennia pryntsypiv tsyvilnoho prava? [2022] 3 Yurydychnyi visnyk 74, 78 https://doi.org/10.32782/yuv.v3.2022.10 (in Ukrainian).

4. Cherkashyn S, Zmenshennia rozmiru neustoiky sudom: teoretyko-praktychnyi aspekt [2019] 4 Pravo i suspilstvo 96, 97–98 https://doi.org/10.32842/2078-3736-2019-4-14 (in Ukrainian).

Websites

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6. Markiv N, Praktyka zastosuvannia Hospodarskym sudom mista Kyieva ch. 3 st. 551 Tsyvilnoho kodeksu Ukrainy dlia zmenshennia rozmiru neustoiky (Profecto, 22.02.2021) (accessed 19.06.2026) (in Ukrainian).

7. Pechenyi O, Problemni pytannia Zastosuvannia neustoiky u svitli kardynalnykh zakonodavchykh zmin (№ 7–8 Visnyk NAAU, 2025) (accessed 19.06.2026) (in Ukrainian).

8. Popkov D, Dyskretsiia sudu u zmenshenni stiahuvanoi neustoiky: sproby poiednannia matematyky ta prava (Supreme Observer, 21 bereznia 2025) (accessed 19.06.2026) (in Ukrainian).