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Incident Laws:

We've listed some of the relevant laws incident in determining how penalties are calculated.

The original versions are translated from Romanian to English. Original acts are available at the provided links.

  • LAW no. 72 of March 28, 2013
    regarding measures to combat delays in the execution of payment obligations for sums of money resulting from contracts concluded between professionals and between them and contracting authorities
  • ORDINANCE no. 13 of August 24, 2011
    regarding the legal remunerative and penalty interest for monetary obligations, as well as the regulation of certain financial-fiscal measures in the banking sector
  • CIVIL CODE of July 17, 2009 (reissued)
    (Law no. 287/2009)

Civil code: on contractual penalties

Article 1535 - Moratory Damages for Monetary Obligations

  1. Suppose a sum of money is not paid by the due date. In that case, the creditor is entitled to moratory damages, from the due date until the moment of payment, in the amount agreed upon by the parties or, in the absence thereof, as provided by law, without the need to prove any damage. In this case, the debtor is not entitled to prove that the damage suffered by the creditor as a result of the delay in payment would be less.
  2. If, before the due date, the debtor owed interest higher than the legal interest, moratory damages are due at the level applicable.
  3. If no moratory interest higher than the legal interest is owed, the creditor is entitled, in addition to the legal interest, to damages for the full repair of the damage suffered.

ORDINANCE no. 13/2011: on contractual penalties

Article 1

  1. Parties are free to establish, in agreements, the interest rate for both the restitution of a loan of a sum of money and for the delay in payment of a monetary obligation.
  2. The interest owed by the debtor of the obligation to give a sum of money at a certain term, calculated for the period before the fulfilment of the term of the obligation, is called remuneratory interest.
  3. The interest owed by the debtor of the monetary obligation for not fulfilling the respective obligation at maturity is called penalizing interest.
  4. If not specified otherwise, the term interest in this ordinance regards both remuneratory interest and penalizing interest.
  5. By interest is understood not only the amounts considered in money under this title but also other performances, under any title or denomination, to which the debtor obliges as equivalent to the use of capital.

Article 2

In the case where, according to legal provisions or contractual provisions, the obligation is bearing remuneratory and/or penalizing interests, as the case may be, and in the absence of an express stipulation of their level by the parties, the legal interest applicable to each of them will be paid.

Article 3

  1. The rate of legal remuneratory interest is established at the level of the reference rate of the National Bank of Romania, which is the monetary policy rate set by the decision of the Administration Council of the National Bank of Romania.
  2. The rate of legal penalizing interest is established at the level of the reference rate plus 4 percentage points.
  3. In legal relations that do not arise from the operation of a profit-oriented enterprise, in the sense of art. 3 par. (3) of Law no. 287/2009 regarding the Civil Code, republished, the legal interest rate is set according to the provisions of par. (1), respectively par. (2), reduced by 20%.
[...]

Article 5

  1. In legal relations that do not arise from the operation of a profit-oriented enterprise, in the sense of art. 3 par. (3) of Law no. 287/2009 regarding the Civil Code, republished, the interest cannot exceed the legal interest by more than 50% per year.
  2. Any clause through which the provisions of par. (1) are violated is null by right. In this case, the creditor is forfeited from the right to claim the legal interest.

Article 8

  1. The interest will be calculated only on the amount of the borrowed sum.
  2. However, the interests can be capitalized and can produce interests under a special agreement made in this sense, after their maturity, but only for interests owed for at least one year.

LAW 72/2013: on contractual penalties

Article 1: Scope of Application

  1. This law applies to certain, liquid, and payable claims consisting of payment obligations arising from a contract concluded between professionals or between them and a contracting authority, the contract involving the supply of goods or provision of services, including the design and execution of public works, buildings, and civil construction works.
  2. The following are not included within the scope of this law:
    1. Claims listed in the creditors' table during an insolvency procedure and claims subject to an ad-hoc mandate, preventive concordat, or an agreement resulting from an out-of-court debt restructuring negotiation;
    2. Contracts concluded between professionals and consumers.

Article 2: Definitions

In the context of this law, the expressions and terms below are defined as follows:

  1. Contracting authority:
    1. Any public authority of the Romanian state, operating at the central, regional, or local level;
    2. Any other public law entity, other than those mentioned in letter a), with legal personality, established to meet needs of general interest without profit, and in at least one of the following situations:
      1. It is funded mostly by a contracting authority as defined in letter a), or by another public law entity;
      2. It is subordinate to or under the control of a contracting authority as defined in letter a), or another public law entity;
      3. More than half of the members of the board of directors or, where applicable, the supervisory board and directorate, are appointed by a contracting authority as defined in letter a), or by another public law entity;
    3. Any association formed by one or more contracting authorities as mentioned in letter a) or b);
  2. Professional - any natural or legal person operating a profit-oriented enterprise;
  3. Delay in fulfilling payment obligations of sums of money - failure to make payment by the due date established through contract or by law, under the conditions of Art. 3 par. (1) and Art. 8 par. (1);
  4. Amount owed - the sum that should have been paid by the contractual or legal payment deadline and other sums mentioned in the invoice or equivalent payment request.

Article 3: Determining Interest

  1. In relations between professionals, the claim consisting of the price of delivered goods or the fee for provided services generates penalizing interest if:
    1. The creditor, including its subcontractors, has fulfilled their contractual obligations;
    2. The creditor has not received the owed sum at maturity, except in cases where the delay is not attributable to the debtor.
  2. Penalizing interest accrues from the due date until payment is made, under the provisions of Art. 1.535 of Law No. 287/2009 on the Civil Code, republished, with subsequent amendments.
  3. If the payment term has not been stipulated in the contract, penalizing interest accrues from the following deadlines:
    1. After 30 calendar days from the date the debtor receives the invoice or any other equivalent payment request;
    2. If the date of receiving the invoice or an equivalent payment request is uncertain or before the receipt of goods or provision of services, after 30 calendar days from the receipt of goods or provision of services;
    3. If the law or contract establishes a procedure for acceptance or verification, allowing the certification of goods or services conformity, and the debtor received the invoice or equivalent payment request on the date of acceptance or verification or before this date, after 30 calendar days from this date.
  4. The acceptance or verification procedure mentioned in par. (3) letter c) cannot exceed 30 calendar days from the date of goods receipt or service provision. Exceptionally, parties may stipulate in the contract a longer term than 30 calendar days, provided that this clause is not abusive, according to Art. 12.

Article 4: Legal Penalizing Interest

If the parties have not established the level of interest for late payment, legal penalizing interest will apply, calculated according to Art. 3 of the Government Ordinance No. 13/2011 regarding the legal remuneratory and penalizing interest for monetary obligations, as well as for regulating some financial-fiscal measures in the banking sector, approved by Law No. 43/2012. The reference rate of legal interest in force on the first calendar day of the semester applies for the entire semester.

Article 5: Contractual Payment Term

  1. In relations between professionals, the payment term cannot exceed 60 calendar days. Exceptionally, the parties may stipulate in the contract a longer payment term, provided that this clause is not abusive, according to Art. 12.
  2. Parties may agree to make payment in installments; in this case, penalizing interests and other compensations provided by this law are calculated with reference to the due amount.
  3. Parties cannot agree on the issuance/receipt date of the invoice. Any clause stipulating a term for issuing/receiving the invoice is absolutely null and void.

Article 6: Legal Payment Term

  1. Contracting authorities fulfill the payment obligation of sums of money resulting from contracts concluded with professionals no later than:
    1. 30 calendar days from the date of receiving the invoice or any other equivalent payment request;
    2. 30 calendar days from the date of goods receipt or service provision, if the date of receiving the invoice or an equivalent payment request is uncertain or before the receipt of goods or provision of services;
    3. 30 calendar days from acceptance or verification, if the law or contract establishes an acceptance or verification procedure for certifying the conformity of goods or services, and the contracting authority received the invoice or equivalent payment request on the date of acceptance or verification or before this date.
  2. The acceptance or verification procedure mentioned in par. (1) letter c) cannot exceed 30 calendar days from the date of goods receipt or service provision. Exceptionally, in cases objectively justified by the nature or characteristics of the contract, the acceptance or verification procedure can last longer than 30 calendar days if expressly stipulated in the contract and procurement documentation, both the acceptance term and the objective reasons, provided that this clause is not abusive, in the sense of Art. 12.
  3. Parties cannot agree on the issuance/receipt date of the invoice. Any clause stipulating a term for issuing/receiving the invoice is absolutely null and void.
  4. In the case of public institutions in the health sector and public entities providing health care services, the legal payment term for financial obligations resulting from contracts concluded with professionals is at most 60 calendar days, calculated according to the provisions of par. (1).

Article 7: Contractual Payment Term

  1. The payment terms established in the contract for fulfilling the payment obligations of contracting authorities cannot exceed the terms set according to Art. 6 par. (1).

    Exceptionally, the parties may stipulate a payment term of maximum 60 calendar days, if this is expressly established in the contract and procurement documentation and is objectively justified, considering the nature or specific characteristics of the contract, provided that this clause is not abusive, in the sense of Art. 12.
  2. The provisions of Art. 5 par. (2), regarding installment payments, apply correspondingly.

Article 8: Penalizing Interest

  1. In relations between contracting authorities and professionals, the payment claim consisting of the price of delivered goods or the fee for provided services generates penalizing interest if the conditions specified in Art. 3 par. (1) are met.
  2. Penalizing interest for late payment accrues from the term stipulated in the contract or, if not stipulated in the contract, from the expiration of the terms provided in Art. 6 par. (1), under the provisions of Art. 1.535 of Law No. 287/2009, republished, with subsequent amendments. The provisions of Art. 4 apply correspondingly.

Article 9: Expenses for Claim Recovery

The creditor may claim damages for all expenses made for recovering the claim, under the conditions of non-timely fulfillment of the payment obligation by the debtor.

Article 10: Minimum Damages

  1. Without prejudice to the rights provided in Art. 9, if the conditions for payment delay are met, the creditor may claim from the debtor the equivalent in lei at the payment date of an amount of 40 euros, representing minimum additional damages.
  2. The obligation to pay the amount specified in par. (1) is due from the date penalizing interest accrues, according to the provisions of Art. 3 par. (2) and (3) or, where applicable, Art. 8 par. (2).
  3. The amount specified in par. (1) is in addition to the expenses related to any possible forced execution procedure.

Article 11: Contracts with Advances

In the case of advances granted by the contracting authority, according to the law, the provisions of Art. 8-10 apply to the difference between the payment obligations and the granted advances.

Article 12: Concept

The practice or contractual clause that establishes in a clearly unfair manner, in relation to the creditor, the payment term, the level of interest for delayed payment, or the additional damages is considered abusive.

Article 13: Qualification of Abusive Clauses and Practices

In determining the abusive nature of a clause or practice, the court takes into account all circumstances of the case, especially:

    1. Serious deviations from established practices between parties or from customs conforming to public order or good morals;
    2. Non-compliance with the principle of good faith and the principles of diligence in fulfilling obligations;
    3. The nature of the goods or services;
    4. The lack of objective reasons for derogation from the payment terms or the interest rate, according to this law;
    5. The dominant position of the co-contracting

party in relation to a small or medium-sized enterprise.

Article 14: Clauses Legally Qualified as Abusive

The following contractual clauses are qualified as abusive, without the need to verify the existence of circumstances provided in Art. 13 or other specific circumstances of the case:

    1. Excluding the possibility of applying penalizing interest or establishing penalizing interest lower than the legal penalizing interest;
    2. Establishing an obligation to put in default for the accrual of interests;
    3. Stipulating a term longer than that provided in Art. 3 par. (3) or, where applicable, Art. 6 and Art. 7 par. (1), from which the claim generates interest;
    4. Fixing, in contracts between professionals and contracting authorities, a payment term longer than that provided in Art. 7 par. (1);
    5. Eliminating the possibility of paying additional damages;
    6. Establishing a term for the issuance/receipt of the invoice.

Article 15: Sanctions

  1. Abusive clauses are absolutely null and void.
  2. Financial liability for damages caused by abusive clauses and practices is attracted according to the provisions of Law No. 287/2009, republished, with subsequent amendments.

Article 16: Order for Payment

If the debtor delays in making the payment, the creditor can obtain an enforcement title through the order for payment procedure, provided by the provisions of Art. 1.013-1.024 within Title IX of Law No. 134/2010 on the Civil Procedure Code, republished, with subsequent amendments and completions.

Article 17: Equal Treatment

The provisions of Art. 1.013-1.024 of Law No. 134/2010, republished, with subsequent amendments and completions, apply, under the same conditions, to all creditors established in the European Union.

Article 18: Role of Employers' Organizations

  1. Representative employers' organizations, according to the law, and their members ensure the respect of rights conferred by this law.
  2. Public authorities collaborate with representative employers' organizations to promote the rights conferred by this law.

Article 19: Rights

Representative employers' organizations, according to the law, have the following rights:

    1. To be consulted during the drafting of legislative project proposals in the field of public procurement and normative acts aiming at or having the effect of encouraging contractual discipline;
    2. To initiate legal actions to defend the legitimate rights and interests of their members, especially actions for the annulment of abusive clauses and the determination of abusive practices;
    3. To inform the public opinion, through the media, about identified abusive practices and clauses;
    4. To develop, alone or in collaboration with public institutions, codes to promote contractual discipline, to develop the custom of timely payments;
    5. To organize, alone or in collaboration with public institutions, information campaigns for the business environment about the rights and obligations established by this law and regarding judicial remedies for the protection of rights provided by this law.

Article 20: Amendment of Relevant Normative Acts

After paragraph (2) of Article 3 of Government Ordinance No. 13/2011 on legal remuneratory and penalizing interest for monetary obligations, as well as for regulating some financial-fiscal measures in the banking sector, published in the Official Gazette of Romania, Part I, No. 607 of August 29, 2011, approved by Law No. 43/2012, a new paragraph, paragraph (2^1), is introduced with the following content:
(2^1) In relations between professionals and between them and contracting authorities, the legal penalizing interest is set at the level of the reference interest rate plus 8 percentage points.

Article 21: Transitional and Final Provisions

The provisions of this law, with the exception of the provisions of Art. 15*), are not applicable to payment obligations of sums of money resulting from contracts concluded between professionals and between them and contracting authorities before the date of entry into force of this law.

🧑‍⚖️
*) By DECISION OF THE CONSTITUTIONAL COURT No. 745 of November 3, 2015, published in the OFFICIAL GAZETTE No. 937 of December 18, 2015, the exception of unconstitutionality regarding the provisions of Art. 21 of Law No. 72/2013 on measures for combating the delay in the execution of payment obligations of sums of money resulting from contracts concluded between professionals and between them and contracting authorities was admitted, finding that the phrase "with the exception of the provisions of Art. 15" is unconstitutional.

According to Art. 147 par. (1) of the REPUBLISHED CONSTITUTION OF ROMANIA in the OFFICIAL GAZETTE No. 767 of October 31, 2003, the provisions in the laws and ordinances in force, as well as those in regulations, found to be unconstitutional, cease their legal effects 45 days after the publication of the Constitutional Court's decision if, within this interval, the Parliament or the Government, as applicable, does not align the unconstitutional provisions with the Constitution's provisions. During this term, the provisions found to be unconstitutional are automatically suspended.

In conclusion, starting from December 18, 2015, to January 31, 2016, the phrase "with the exception of the provisions of Art. 15" within Art. 21 of Law 72/2013, was automatically suspended, ceasing its legal effects starting from February 1, 2016, as the legislator did not intervene to modify the provisions declared unconstitutional.

Article 22

The term "professional" provided in Art. 3 par. (2^1) of Government Ordinance No. 13/2011, approved by Law No. 43/2012, with the amendments brought by this law, will have the meaning provided in Art. 2 point 2 of this law.

Article 23

Within 60 days from the date of entry into force of this law, the Ministry of Justice informs the European Commission about Romania's option to use the provisions of Art. 4 par. (4) letter b) of Directive 2011/7/EU of the European Parliament and of the Council of February 16, 2011, on combating late payment in commercial transactions.

Article 24

Upon the entry into force of this law, the following are repealed:

    1. Art. 1.017 par. (2) points 1 and 2 of Law No. 134/2010 on the Civil Procedure Code, republished in the Official Gazette of Romania, Part I, No. 545 of August 3, 2012, with subsequent amendments and completions;
    2. Any other contrary provisions.