It depends on how the credits are constructed in the contract. If they amount to a contractual penalty, you will not obtain damages for the same breach under the Civil Code unless the contract expressly permits a claim for loss exceeding the penalty. If the credits are a reduction of the price for a service level not delivered, they do not in themselves exclude damages, although contracts often limit them by a sole-remedy clause. A complete advance waiver of damages is not permitted by the Commercial Code, and the validity of caps on damages has not been definitively resolved.
The system on which invoicing depends was down for two working days. Under the SLA, the supplier credits part of the monthly fee and regards the matter as closed. The company, however, has suffered loss in invoices not issued and in additional work. Whether it can claim more is decided not by the word “credit”, but by the credit’s legal nature and by what the contract says about the relationship between the credit and damages.
The credit as a contractual penalty
If the contract frames the credit as a sanction for breach of an obligation, for example a fixed sum for each hour by which the response time is exceeded, it will generally be a contractual penalty. A penalty may be agreed only in writing and with a specified amount or a method of determining it (Section 544(2) of the Civil Code) and applies even where no loss has arisen. For damages, the following rule is decisive:
The creditor is not entitled to claim compensation for loss caused by breach of an obligation to which a contractual penalty relates, unless the parties’ arrangement on the contractual penalty provides otherwise. The creditor is entitled to seek compensation for loss exceeding the contractual penalty only where the parties have so agreed.
— Section 545(2) of Act No. 40/1964 Coll. (unofficial English translation)
The rule applies between businesses as well, because the Commercial Code regulates contractual penalties only in part. That Code also provides that circumstances excluding liability have no effect on the obligation to pay a penalty (Section 300 of the Commercial Code) and that a court may reduce a disproportionately high penalty (Section 301). The starting point in the Czech Republic is the same: under Section 2050 of the Civil Code, where a contractual penalty has been agreed, the creditor has no right to damages arising from the breach to which the penalty relates. Contractual penalties in general are addressed in the question on how a contractual penalty works.
The credit as a price reduction
Many SLAs construct the credit differently: the fee corresponds to the agreed service level, and for a month in which availability fell below the commitment the price is reduced proportionately. A credit of this kind is a pricing mechanism; the rule on the relationship between a penalty and damages does not apply to it directly and it does not of itself exclude damages. Suppliers therefore supplement it with a sentence stating that the credit is the customer’s sole and exclusive remedy for unavailability of the service.
Such a sentence must be read together with the mandatory rule of the Commercial Code from which the parties may not derogate (Section 263(1)):
A claim for damages cannot be waived before the breach of the obligation from which the loss may arise.
— Section 386(1) of Act No. 513/1991 Coll. (unofficial English translation)
If an exclusive credit in truth meant that the customer waives damages altogether, or were so low as merely to disguise such a waiver, it is vulnerable in a dispute. Whether even a proportionate cap on damages will stand is not definitively resolved in Slovak law and the views in the literature differ. It is therefore safer to work with the scope of foreseeable loss under Section 379 and with an expressly agreed contractual penalty whose amount both parties have consciously estimated.
What to do in a dispute and in a new contract
First establish whether the contract calls the credit a penalty or ties it to the price, and whether it contains a clause on cumulation with damages or on a sole remedy. Document the loss at once, including incident records, resolution times and the costs you have incurred. Claim the credit within the period set by the contract so that you do not lose it while disputing a larger claim.
In a new contract it is worth agreeing whether the credit is a penalty and whether loss exceeding it may be claimed alongside it, a cap on sanctions the supplier can bear, and a right to withdraw in the event of repeated failure. We prepare service contracts with an SLA that can be measured and enforced under our service contract and SLA service. For services operated by the supplier, the SLA forms part of the SaaS contract and terms; how to limit liability in terms intended for many customers is discussed in the article on limitation of liability in EULAs and SaaS terms.
This answer provides general information on the law as at 12 September 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.
