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Grounds and consequences of termination of the contract

Termination of the contract, grounds, procedure, consequences such actions are regulated by the Civil Code. The Code contains a special article 453, revealing the features of this procedure. Consider her. consequences of termination

General information

What are nconsequences of changes and termination of the contract? In part 1 453 articles of the Civil Code the following is established. In case of a change in the contract, the obligations of the parties to the transaction take on a new look. This rule is considered general. Legal consequences of termination of the contract fixed in the second part of this norm. The provision of the article establishes that in such a case the obligations of the participants terminate, unless otherwise specified in the legislation, agreed upon by the counterparties or arises from the essence of the transaction. Considering amendment and termination of the contract, grounds, procedure, consequences of such actions, rulemakers separately stipulate the moment of termination of obligations. It is determined in the third part of Article 453 of the Code. Obligations are recognized as changed or terminated at the time of the conclusion of the relevant agreement. If the procedure was carried out in court, then the corresponding event occurs when the decision comes into force.

Counterparty Features

Parties to the transaction may not demand the return of fulfilled obligations until the moment of amendment / termination of the agreement, unless otherwise provided by law or by the parties to the transaction themselves. In this case, nuances should be taken into account. If, prior to termination / amendment of an agreement, one of the participants, having received execution from another, has not repaid its obligation or has provided an unequal performance, unjust enrichment takes place. Accordingly, the provisions of Sec. 60, unless otherwise provided by law, the nature of the transaction or not determined by the parties. Considering grounds and consequences of amendment and termination of the contract, the legislator draws attention to situations when one of the participants violated the established conditions. In such cases, the second entity may demand compensation for losses caused by improper actions of the counterparty. termination of the contract of foundation order consequences

Explanations

The considered norm 453 defines the general consequences of amendment and termination of the contract. The article reveals the relationship between the actions of the parties to the transaction and the circumstances that existed prior to their completion. As indicated in paragraphs 1 and 2, the obligations of counterparties, when adjusting or terminating the terms of the contract, change or terminate. The moment in time from which they take a different look is regarded as a legal fact. Associated with him consequences of termination by agreement of the parties or court decision. Section 3 establishes the rules for determining this moment. First of all, it depends on the chosen method of amending / terminating the contract.

Mutual agreement

If the parties change / terminate the agreement by agreement, the moment with which the acquisition is associated with an obligation of a new type or its termination coincides with the time of its execution. For the actions of participants, a dispositive position is established. It provides that the moment from which their obligations will take on a new look may be fixed by the entities themselves or follow from the nature of the adjustment of the terms of the transaction. According to this rule, the consequences of unilateral termination of the contract may also be established.

Judgment

If the authorized authority adopted a resolution on the consequences of terminating the contract, the obligation shall terminate upon its entry into force.The relevant time frames are fixed by the procedural codes. So, under articles 209 of the Code of Civil Procedure and 180 of the agro-industrial complex, the decision comes into force after the expiration of the ten-day period allotted for appeal / cassation appeal. For the rulings of the arbitration court of the first instance, a month is provided from the date of adoption, if no complaint has been filed. procedure and consequences of amendment and termination of contracts

Specific requirements

The procedure and consequences established by law for the changes and termination of contracts provide for the possibility of a counterparty to demand the performance of an outstanding obligation. Its presence is confirmed by judicial practice. The following is indicated in the appendix to the letter of the Presidium of the EAC of 2005. Unless otherwise provided by the agreement, termination of the contract entails the termination of the obligation for the coming period, but does not deprive the lender of the opportunity to demand the repayment of the debt formed before. In addition, the entity is entitled to recover compensation for damage related to non-performance or improper fulfillment of the terms of the transaction.

Limitations

They are provided for in paragraph 4 453 of the Civil Code. As consequences of termination there is a ban on the requirement to return executed on the transaction. This provision, however, is of a dispositive nature. The rule of clause 4 emphasizes the inviolability of repaying an obligation in an appropriate manner, in accordance with the terms of the transaction and the requirements of the law and other regulations, and in their absence, in accordance with customs or other requirements. The dispositive nature of the provision is manifested in reference to the fact that others may be envisaged. consequences of termination. They can also be fixed by law or by the parties to the transaction in a special document. The normative acts provide for specific cases when the return of the executed is allowed. For example, we can take the consequences of terminating the contract of sale. The legislation establishes that when a consumer sells goods of inadequate quality, the guilty person must return the money paid. The corresponding consequences of the termination of the contract of sale are fixed by article 475 of the Civil Code in paragraph 2. legal consequences of termination

Violation of the terms of the transaction

Considering grounds and consequences of termination of the contract, it is impossible not to dwell on cases of improper performance or non-performance. If one counterparty violated the terms of the transaction, then, according to paragraph five of Article 453 of the Code, the second participant may demand compensation for losses incurred in connection with this. Moreover, termination of relations is carried out, as a rule, in the framework of judicial proceedings.

Materiality of misconduct

This characterization is key in dispute resolution. A significant violation of the terms of the transaction involves the counterparty causing such harm in which the entity loses to a large extent what it expected when concluding the contract. Losses thus arise as a result of improper fulfillment of the terms of the transaction. At the same time, of course, the interested participant does not lose the opportunity to demand compensation for other losses according to the general rules enshrined in Article 15 of the Code.

Explanations YOU

In judicial practice, there are many problems in the application of the rules establishing consequences of termination. In this regard, the EAC clarified some key issues. In particular, as stated in Article 450 of the Civil Code, a transaction may be terminated by agreement of the participants or by a court decision. According to Art. 310 and clause 3 of the specified norm, to the unilateral refusal to fulfill the conditions, if it is allowed by the legislation or counterparties, the same consequences apply that are established for cases of termination of the contract. Dispute-resolving entities need to consider the following. Consequences of termination of the contractdifferent from those enshrined in Article 453 of the Civil Code may be present in the provisions governing certain types of relations between entities within the framework of civil circulation. The rules of the said norm are applied in such cases to the extent that they do not contradict special instructions. The consequences of termination of the transaction, other than those stipulated by law, may be determined by the parties in compliance with the general principles of restricting freedom of contract.

Forfeit

When resolving disputes related to termination of contracts, courts must take into account that, in accordance with paragraph 2 of Article 453 of the Civil Code, the counterparty’s obligation to subsequently perform actions that are part of the agreement ceases. In particular, he will not have to, for example, ship products, perform work, issue a loan, etc. Accordingly, the penalty provided in case of non-fulfillment or improper fulfillment of obligations is charged until the contract is terminated. grounds and consequences of termination of the contract

Specific conditions

Some clauses of the contract, due to their legal nature, also apply after the termination of the transaction. Such conditions, for example, include warranties, arbitration, jurisdiction, etc. Some provisions of the contract are aimed at regulating the relations of entities after the transaction is terminated. These include the conditions for returning the leased asset, the procedure for deduction of the advance payment paid, etc. Such provisions shall remain in force after termination of the agreement. However, the law allows that counterparties themselves may establish a different rule.

Return received

As indicated in paragraph five of Article 453 of the Civil Code, a demand for the return of a transaction executed is not allowed, unless otherwise specified by the parties. If it stipulates that the subjects transfer to each other what they received, while real estate is the subject, registration of the reverse transfer of rights to property is carried out upon application to the appropriate authority. Subjects must provide documents proving the termination of the contract, and an agreement on the return of the object. If the latter is absent, then the provision of paragraph 4 of article 453 of the article applies only in cases where the property provision for the terminated transaction is carried out properly. If the subject of the obligation is divisible, then the parties must return equivalent objects. For example, the amount of the advance payment corresponds to the cost of the services provided or goods shipped. In such cases, the interests of the counterparties will not be infringed.

Violation of the ratio of returned objects

If, in the course of the consideration of the case related to the termination of the transaction, the court determines that the counterclaims are not equivalent, the participant who transferred the property may demand its return to the extent that this violates the agreed ratio. For example, the purchaser paid for 5 batches of products, but received only 2. Upon termination of the supply contract, he may demand either the return of a part of the amount for which the goods were not received (for 3 batches), or the whole amount, but when he returns the received products . This power does not limit the person in the implementation of other opportunities provided for in case of violation of obligations by the counterparty. In particular, it may additionally require compensation for losses. decree on the consequences of termination of the contract

Features of cost recovery

Regardless of the reasons why the parties terminate the contract, the participant, obliged to return the property, compensates the counterparty for all the benefits derived from using the facilities, their processing or consumption. From this, the expenses incurred by the entity for the maintenance of material values ​​are deducted. So, if objects that were in use are returned, their wear is subject to compensation. It is determined by the calculation method.An interested person can prove that the actual depreciation has exceeded the estimated one due to excessive use of property. If a refund is expected, then interest on the use of funds is payable in accordance with article 395 of the Civil Code.

What if property cannot be returned?

In case of deterioration, damage to material assets or the inability to provide them in kind, the courts are recommended to be guided by the following provisions. If the ground for termination of the contract is a violation of its terms by the counterparty who acquired the property, then he must return the object, compensating for any, including accidental, damage, shortage, deterioration of his condition. If it is impossible to provide material values ​​in kind, the participant who improperly performed or did not fulfill the obligation at all, reimburses them at the agreed cost. If there is no reference to it in the agreement, then the price of the property, established by the rules of paragraph 3 of paragraph 424 of the Civil Code article at the acquisition date, is taken into account. If deficiencies are identified at the facility, the cost is determined taking into account them. At the same time, the party to the transaction that committed violations that served as the basis for termination of the transaction may be exempted from the obligation to compensate for the value of the property received in cash if it died due to defects for which the counterparty that transferred the objects was responsible, or such a result would have been anyway , no matter who exactly would hold the values. consequences of termination by agreement of the parties

Ownership / Use

Upon termination of the agreement involving the grant of a loan or transfer of the object for rent, the entity that received the property must return it to the counterparty within a reasonable time. The fulfillment of this obligation is regulated by the norms of Chapter 22 of the Civil Code, as well as special provisions on certain types of transactions (Articles 664, 622, 655). The rules can be established by the contract itself, including in cases where it determines the procedure for the return of material assets at the end of the agreement. In these situations, the norms of chapter 60 of the Code do not apply. In case of termination of the lease agreement, payments for the use of the property up to the date of its actual return, penalty and losses for delay may be recovered.

Conclusion

If the court decides to terminate the contract registered in the prescribed manner, the corresponding entry must be entered into the register on the basis of the decision that has entered into force. For this, the relevant counterparty applies to the authorized body with a statement. If the agreement establishes the possibility of one of the participants to unreasonably refuse to fulfill the stipulated obligations, the person who used it can contact the registration structure, providing evidence of notification of the counterparty about its decision. If a unilateral refusal is caused by the actions of one of the entities, for example, a violation of the conditions, or other circumstances requiring mandatory verification, statements are submitted by both parties. If one of the parties evades this, the interested counterparty may file a lawsuit with the court to terminate the transaction. A decision made based on the results of consideration acts as the basis for inclusion of the corresponding record by the registering authority in the register.


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