The Civil Code introduced a new rule according to which a party may, within one year of concluding the contract, demand its cancellation if the performance it provided is "grossly disproportionate" to what it received from the other party – so-called disproportionate reduction (Section 1793 et seq. CC). The Supreme Court has now clarified that this "gross disparity" occurs when the aggrieved party does not receive about half (range 45 to 55%) of the value it has provided. This margin may be departed from only if there are special reasons for doing so. In case of doubt, it must be concluded that there has been no disproportionate reduction.

(Judgment of the Supreme Court of 25 January 2022, File No. 33 Cdo 42/2021, available at click here - Czech only)

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