The procedure for terminating the contract unilaterally is the procedure for terminating the relations of the parties through the actions of one of them. The law gives the agreement a certain force, and as a general rule, the parties do not have the right to refuse it. Let's consider the questions arising in this connection.
Value of the contract
The agreement at the official level secures the obligations of its participants. None of the parties has the right to refuse it, but the law provides for exceptions to this effect. Moreover, the right of refusal is limited by a strict procedure and includes measures aimed at protecting the interests of the second party.
Sometimes confusion arises between similar concepts - refusal and termination of the contract.
The first concept means the termination of contractual relations at the initiative of one of the parties, the other side does not receive any rights regarding coercion to further performance of the contract.
The second concept involves the termination of the contract on the basis of a court decision or by mutual agreement. The reason for both refusal and termination may be significant violations of the terms by the other party or both parties, loss of interest in the execution of the contract due to changed circumstances.
Thus, the procedure for terminating a contract unilaterally affects many nuances.
Grounds for termination of obligations
Consider the following list:
- Mutual decision of the parties.
- Terms of agreement.
- Change in circumstances.
- Violation of the terms of the transaction.
Mutual decision
For some reason, the party may lose interest in the contract. It is enough to send a notification or take other actions. Nothing more is required from her. But the obligation remains to take into account the interests of the second side. Unbalanced actions will give grounds for the second party to appeal to the court. Thanks to this, the unilateral termination of the contract is risky. How do they act in this situation? It is proposed to conclude an agreement to terminate the contract.
In exchange for consent, the second party agrees not to sue and be satisfied with the proposed amount. Usually it is less than the amount that the court collects if the rights and interests of the other party were violated during the cancellation of the contract. Another form of compensation is not excluded.
In addition, the other side gets rid of the lawsuits and the costs of them (arbitration proceedings are much more expensive than in a court of general jurisdiction), and the risk of loss, it can never be completely ruled out.
Terms of agreement
The right to terminate the contract unilaterally is given directly by the Civil Code. It is not necessary to write the corresponding clause in the text of the contract.
The parties are entitled to supplement the list proposed by the legislator. And this or that action or inaction of a party may serve as a reason for termination of the agreement if the relevant mention is made in the agreement.
The parties agree in advance that each of them has the right to refuse obligations without additional procedures, only by sending a letter or by doing it in another way, according to the terms of the transaction or the norms of the law.
An example is the provision of services to citizens or organizations, which they are entitled to refuse at any time by paying for the services actually provided at the time of application.
Change in circumstances
What are the features of the termination of the contract will be in this case? One of the parties has the right to send a written notice explaining its position.The other party is not deprived of the right to refuse to terminate the contract unilaterally. A party wishing to terminate the contract may apply to the court.
A change in circumstances is not given significance if there is a corresponding reservation in the agreement or the meaning of the agreement. As a result, both parties are denied the right to sue for termination of the agreement due to a significant change in circumstances.
The law identifies several criteria:
- the parties, knowing the occurrence of the relevant circumstances, would either not have concluded an agreement, or would have done it on completely different conditions;
- the parties could not have expected their advance;
- the reasons for their appearance could not be eliminated with all the good faith of the initiator of the termination of the agreement unilaterally;
- the terms of the contract or business customs do not place the risks of such obligations on the interested party.
The court, terminating the agreement, is obliged to fairly distribute the costs of execution of the contract between the parties.
Violation of conditions
Violation of the conditions giving the right to refuse and terminate the contract must be material. Such is considered a violation that makes the continuation of the agreements meaningless. In Art. 450 CC gives a general definition indicating significant damage.
Other provisions of the code, in particular the delivery section, list specific cases of termination of a contract unilaterally. Similar rules in the Civil Code are established for almost all contracts.
Procedure without court intervention
What are the features of the procedure for terminating a contract unilaterally? A person wishing to terminate the contractual relationship sends a notification to the other party. As a general rule, a party to an agreement is considered notified after receiving the document. His refusal or refusal to accept is not taken into account and is considered unfair behavior.
Papers are sent by mail, via courier, through electronic means of communication. Whichever method is chosen, it must ensure that the fact of departure is recorded.
Legislation and treaties sometimes include clauses on the period during which such notice is given.
If the party, having refused the contract, nevertheless decides to renew it, then it is not entitled to then declare the refusal on the same occasion. The right to refuse arises when a counterparty commits a new violation.
The warning on the termination of the contract unilaterally or the notification is in free form. The only requirement is to indicate the reasons for the termination of the relationship, if required by a regulatory act or contract.
Court intervention
The unilateral termination of the contract in court has its own characteristics. As a rule, the termination of the contract is associated with the recovery of funds. Then a number of points are taken into account.
Firstly, there must be grounds for such treatment in the form of significant violations of the terms of the contract. Their list is contained in the law or contract.
Secondly, compliance with the pre-trial dispute resolution procedure is required.
It is presented in the form of a claim indicating the deadline for the provision of a response or complaint to the body authorized to consider disputes in pre-trial procedure.
When filing a claim with an arbitration court, evidence of compliance with the pre-trial order is always necessary, when filing with a district or magistrate court - in the case specified in the regulatory document.
Interaction with banks
Termination of the contract by banks is unilaterally applied quite actively.
Credit organizations prescribe in the agreements the right to terminate through the court and without his participation. Extrajudicial procedure is applied if the client does not actually use the services of the bank, the contract is terminated upon the expiration of the card or credit limit.
The first option is known to all residents of the country, without exception.Banks regularly go to court with claims for termination of the contract and collection of funds.
They are not so familiar with the second. For example, the dismissal or even a change in the place of work is considered grounds for refusal to further extend the overdraft. The client will be notified by letter from the bank or message on a mobile phone.
Supply Features
How to make the termination of the supply contract unilaterally? Sample is not so difficult to find. It is only necessary to have a foundation. The buyer has the right to refuse if:
- the goods of inadequate quality were delivered, and the terms of elimination are unacceptable for the buyer;
- at least two times the delivery time of goods was violated.
The seller has the right to refuse if:
- deadlines for payment of deliveries are violated at least two times;
- at least two times missed the selection of goods.
Cancellation of the contract of DDU unilaterally
As in other cases, the law lists the grounds for refusal and termination of the contract. The shareholder has the right to refuse in the following cases:
- two months have passed since the planned date of delivery of the facility;
- the developer refuses to eliminate the object’s shortcomings or to proportionally reduce the transaction price, or reimburse the interests of the shareholder for their elimination;
- the quality of work does not meet the stated requirements.
Proper fulfillment of obligations by the developer deprives the client of the right to unilateral refusal.
The termination of the DDU contract unilaterally by the developer is provided only for improper performance of payment obligations made by the client.
The fate of contributions is also interesting. If the money is returned by the developer due to his cancellation of the contract, then he is not entitled to keep a part of the money for penalties or fines accrued according to the contract.
If the client refused the agreement, he has the right to demand additional payments for the use of his money in the event of a delay in the return of money.
In which case are co-investors forced to go to court?
- Construction has been discontinued, and it is clear that the facility will not be completed and transferred to the equity holder.
- A significant change in design documentation and floor space by more than 5%.
- Change of purpose of common property and premises included in the complex.
Notification direction
The law on shared construction has a different norm on the procedure for reporting withdrawal from the contract. The fact of sending a letter with a list and notification is sufficient.
The document from the developer indicates the need to repay the debt and the consequences of violation of obligations. The contract on his initiative is terminated no earlier than 30 days after sending the letter to the client.
If the shareholder refused to receive the letter, does not live at the address indicated in the documents, or refused to pay money, or there is information about receiving a notification, the developer has the right to refuse the contract.
Settlement procedure
If the interest holder refuses the agreement, payment shall be made no later than 20 days. When applying to the court - no later than 10 days later.
For each day of using money, interest is accrued, the rate for legal entities is 1/300 of the Central Bank discount rate, for the use of funds of individuals the rate is doubled.
If the owner of the funds did not apply for the money within the prescribed period, they are transferred to a notary's deposit.
The practice of termination of the contract unilaterally
The notification is in free form, but with the details of the parties according to the contract or data from the register. The document requires reference to the provisions of the law or clauses of the agreement on which the applicant relies.
The cancellation of the contract and its termination in court lead to equivalent consequences.
If registration is necessary for the contract, then its termination requires a statement from the initiator (with the right to a unmotivated refusal) and a statement from all parties if the cancellation of the contract should be justified.