Kerroinsääntö

Kerroinsääntö, meaning "multiplier rule" in Finnish, is a fundamental concept in Finnish contract law, particularly related to penalty clauses. It addresses situations where a contractual penalty is deemed excessive and disproportionate to the actual damage suffered by the non-breaching party.

The core principle of the kerroinsääntö is that a court can reduce or even annul a contractual penalty if it finds the amount to be unreasonably high. This aims to prevent parties from exploiting disproportionate penalty clauses to gain an unfair advantage. The assessment of whether a penalty is excessive is made on a case-by-case basis, considering various factors.

Key considerations when applying the kerroinsääntö include the magnitude of the breach, the actual loss incurred, the financial position of both parties, and the overall fairness of the agreement. The rule is not intended to invalidate all penalty clauses but rather to act as a safeguard against their abuse.

The kerroinsääntö is rooted in the general principles of contract law that require agreements to be equitable and not contrary to good practice. While specific legislation may not always explicitly detail the kerroinsääntö, it is a well-established doctrine applied by Finnish courts to ensure fairness in contractual relationships and prevent unjust enrichment through penalty clauses.