Default

Breach of an obligation through failure to perform properly and in a timely manner; claims from default.

Default means a breach of an obligation that occurs when the obligation is not performed properly and in a timely manner.

A debtor and the creditor may both be in default

Default by a debtor

A debtor is in default if they do not pay their debt properly and in a timely manner. However, if the debtor is unable to perform due to default by a creditor, they are not liable for the default.

A creditor may demand the performance of a debt from a debtor in default, or may withdraw from the contract under the terms and conditions agreed in the contract or stipulated by law. They are also entitled to seek damages.

If a debtor is in default with the repayment of a monetary debt, the creditor may demand the payment of default interest. The amount of the default interest can be agreed by the parties. For cases where it is not agreed, the rate stipulated by a government regulation shall apply.

The creditor may withdraw from the contract if the debtor breaches their obligation in a material manner through default. They must do so without undue delay after learning of the default. If the default constitutes only an unsubstantial breach, the creditor must give the debtor an additional reasonable period of time to fulfil the obligation.

Default by a creditor

A creditor is in default if they have not accepted a properly offered performance or have not provided the debtor with the cooperation necessary for the performance of the debt.

The debtor may withdraw from the contract if the creditor breaches their obligation in a material manner through default. They must do so without undue delay after learning of the default. If the default constitutes only an unsubstantial breach, the debtor must give the creditor an additional reasonable period of time to perform the obligation.

Late payments

Claims associated with late payment

A creditor is entitled to default interest, to compensation of damages, and to the reimbursement of the costs associated with the exercise of a receivable through a fixed sum of CZK 1 200. The Czech legal system does not entitle a creditor to any special claims beyond those arising from the Late Payment Directive.

Enforcement of claims from late payment

An entrepreneur to whom a creditor has not paid a due debt may apply to a competent court or arbitration court, if its jurisdiction has been agreed. They can then enforce their claim through the court or a bailiff. No special mechanisms are available.

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