As a rule, civil contracts are terminated by agreement of the parties. This can happen in the event of a violation of the contract, which entails such damage for its party that it is largely deprived of what it had the right to count on when concluding the contract (Article 450 of the Civil Code of the Russian Federation). Also, the counterparty has the right to refuse obligations if the circumstances of the agreement change so much that, if the parties could have reasonably foreseen this, the agreement would not have been concluded by them at all or would have been concluded on significantly different terms.
If the parties have not reached an agreement to bring the contract into compliance with the changed circumstances, the contract may be terminated by a court decision. A demand for termination of a contract can be submitted by a party to the court only after receiving a refusal from the other party to the proposal to terminate the contract or failure to receive a response within the time period specified in this proposal, and in its absence, within 30 days (Article 452 of the Civil Code of the Russian Federation).
General provisions on termination of the contract
The parties have the right to provide in the contract the possibility of unilateral refusal from it (clause 2 of Article 450 of the Civil Code of the Russian Federation). But nevertheless, from the established judicial practice we can conclude that for a unilateral refusal to fulfill a contract related to the implementation of entrepreneurial activities by its parties, the very fact of indicating in the law the possibility of such a refusal is sufficient (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated 09.09.2008 No. 5782/08 ).
However, in order to minimize possible disagreements, the contract should establish the grounds and conditions for withdrawal from the contract. The agreement should also provide for the procedure for unilateral refusal or modification. The text of the agreement must indicate that the party wishing to terminate the agreement must send to the counterparty a notice of refusal to fulfill the terms of the agreement unilaterally. If necessary, the parties can fix the method (for example, a valuable letter with a list of attachments, telegraphic message, courier) and the timing of sending such a notification (clause 4 of Article 421 of the Civil Code of the Russian Federation). From the moment the notification is received, the contract is considered modified or terminated, unless otherwise provided by this notification.
note
A message is considered delivered to the addressee even if it was not actually received for reasons depending on the addressee (clause 1 of Article 165.1 of the Civil Code of the Russian Federation).
Thus, the contract may be recognized as amended or terminated even if the party did not receive the notice if the reason was, for example, the absence of a person authorized to receive correspondence at the address specified in the contract.
If the agreement does not provide the addresses of the parties for sending notifications, then the address specified in the Unified State Register of Legal Entities can be used. Such an address is reflected in the Unified State Register of Legal Entities for the purpose of communicating with a legal entity (subparagraph “c”, paragraph 1, article 5 of the Federal Law of 08.08.2001 No. 129-FZ “On State Registration of Legal Entities and Individual Entrepreneurs”). If a party does not take measures to receive correspondence at this address, it will not be able to further refer to the fact that the notification was not received by it, and, as a result, claim that the agreement has not changed or that its validity has not terminated (clause 1 of the resolution Plenum of the Supreme Arbitration Court of the Russian Federation dated July 30, 2013 No. 61 “On some issues in the practice of considering disputes related to the accuracy of the address of a legal entity”). The organization bears the risk of the consequences of failure to receive legally significant messages that were received at its address indicated in the Unified State Register of Legal Entities, as well as the risk of the absence of its representative at this address.
Transactions between counterparties involve various issues of cooperation. In this regard, depending on the content of the transaction, the appropriate type of contract is concluded. The grounds for unilateral refusal to fulfill various civil obligations (under supply, lease, paid ]contract[/anchor] contracts) have their own characteristics.
Contractual penalty after termination of contract
A contractual penalty is an amount of money that one party is obliged to pay to the other party to the contract in the event of failure to fulfill an assumed obligation or improper performance of obligations.
The emerging judicial practice on the collection of contractual penalties beyond the term of the contract is ambiguous. Two positions of the courts can be distinguished:
- After the expiration of the contract, the penalty for the unfulfilled obligation provided for in the contract is payable in full
- After the expiration of the agreement, the contractual penalty is not subject to accrual, but interest may be accrued in accordance with Article 395 of the Civil Code of the Russian Federation.
Therefore, to form a legal position on the contract, it is necessary to analyze all the clauses of the agreement. For example, very often a clause is made in the contract - “termination of the contract entails termination of obligations” - in this case, collection of a penalty under the contract after its termination becomes impossible.
In order to prevent your legal risks, as well as to correctly provide for the possibility of compensation payments from the counterparty, seek the advice of a lawyer before concluding an agreement.
Unilateral refusal to fulfill the supply agreement
Under a supply agreement, the supplier undertakes to transfer the ownership of the goods to the buyer, who undertakes to accept the goods and pay a certain amount of money for them. If the parties fail to fulfill their obligations, there are risks of causing economic damage and damage to business reputation. Failure to fulfill the terms of the contract is possible due to objective reasons without the fault of any of the parties. But, if one of them makes a decision to terminate the contract unilaterally, it must have a legal basis.
On a note
The supply agreement can be terminated by the seller if the goods must be transferred in assortment, and the agreement does not establish the procedure for determining it (clause 2 of Article 467 of the Civil Code of the Russian Federation).
The grounds for termination of the contract by the buyer may be: delivery of goods of inadequate quality with defects that cannot be eliminated within a time acceptable to the buyer, as well as repeated violations of delivery deadlines.
The supplier, in turn, can terminate the contract if the buyer repeatedly violates payment terms and does not select goods (Article 523 of the Civil Code of the Russian Federation).
These conditions for termination of the contract by the parties are established by Article 523 of the Civil Code as significant violations of agreements, and their list is closed. Because of this, it can be assumed that if the parties include clauses in the contract providing for their right to refuse to fulfill its terms on other grounds, then they will not be able to exercise such a right.
However, there is another rule: the reference in paragraphs 1 and 3 of Article 523 of the Civil Code to paragraph 4 of paragraph 2 of Article 450 allows for unilateral refusal of the contract in the event of another significant violation. As the courts indicate, this norm is a reference one, and this indicates that the list of cases of significant violation of the supply contract by its parties, which is contained in paragraphs 2 and 3 of Article 523 of the Civil Code, is not exhaustive.
This is the position of the courts. For example, a one-time delivery of goods was agreed upon between the parties. Long-term failure to fulfill this obligation on the part of the supplier indicates a significant violation of the contract and gives the buyer the right to refuse to fulfill its terms due to loss of interest in this product (resolution of the Federal Antimonopoly Service of the Volga-Vyatka District dated August 30, 2011 in case No. A17-5614/2010, FAS Far Eastern District dated October 29, 2013 No. F03-4835/2013 in case No. A73-15799/2012).
An important condition of the supply contract is a clear agreement on what to supply. And in practice, disputes arise about the sufficiency of determining the range of goods supplied.
A provision regarding the assortment of goods can be considered essential for a supply contract only if the parties have stipulated this in the contract itself or in appendices to it, for example, in a specification. This position has been repeatedly confirmed by judicial practice (decrees of the Federal Antimonopoly Service of the Central District dated April 24, 2008 No. F10-1641/08 in case No. A23-1982/07G-15-184, dated December 19, 2007 in case No. A09-9224/06-4, dated 12/21/2007 in case No. A09-9223/06-9; dated 06/25/2008 in case No. A23-2233/07G-4-59; resolution of the FAS of the East Siberian District dated 08/26/2010 in case No. A33-19037/2009) .
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In case of receiving an advance payment and refusal to fulfill the terms of the contract for any reason, it is important to take into account that a necessary condition for the seller to accept for deduction of VAT accrued on the advance received is its return to the buyer (letter of the Ministry of Finance of Russia dated April 1, 2014 No. 03-07- RZ/14444).
One of the reasons for termination of the contract may be the buyer’s failure to make advance payment. In this case, the supplier may refuse to fulfill the obligation to supply goods and demand compensation for losses (clause 2 of Article 328 of the Civil Code of the Russian Federation).
So, it is possible to terminate a supply agreement unilaterally only in cases permitted by law. Possible economic losses in the event of an unwanted unilateral refusal of obligations encourage the parties to invent intricacies of interpretation of the terms of the contract. In particular, they include clauses in the agreement prohibiting its unilateral termination. But such a condition will contradict the essence of the delivery obligations; it is considered invalid and cannot be fulfilled by the parties (Article 168 of the Civil Code of the Russian Federation).
Court decision to terminate the contract for the provision of services under Article 32 of the Law of the Russian Federation
Court decision to terminate the contract for the provision of services under Article 32 of the Law of the Russian Federation
Case No. 2-256/2017
Decision
In the name of the Russian Federation
With. Zavyalovo November 23, 2021
Zavyalovsky District Court of the Altai Territory composed of Judge M.N. Belousov,
under the secretary of Abt N.V.,
having considered in open court a civil case on the claim of Natalya Vladimirovna Vasyugova against Ring-M LLC for the recovery of the amount paid under the contract, penalties, compensation for moral damage,
Installed:
Vasyugova N.V. filed a lawsuit against Ring-M LLC to recover the amount paid under the contract, penalties, and compensation for moral damage. The plaintiff's claims are justified by the fact that on August 7, 2016. An agreement was concluded between the plaintiff and the defendant for the provision of comprehensive services, the plaintiff paid the defendant a premium in the amount of 15,900 rubles. From the moment of conclusion of the contract to the present time, the defendant has not provided services under the contract. In addition, the defendant included in clause 6.3 of the contract a condition that infringes on the rights of the consumer in case of refusal to perform and termination of the contract. The plaintiff considers this condition invalid. Also, the defendant did not provide information about the conditions for setting the price for services under the contract.
June 27, 2021 The plaintiff sent a notice to the defendant to terminate the contract and return the amount paid under the contract. This requirement was not fulfilled by the defendant, and therefore the plaintiff asks to recover from the defendant the amount of 15,900 rubles paid under the contract, a penalty in connection with the failure to satisfy the consumer’s demand for a refund of the amount paid, compensation for moral damage caused to the plaintiff in connection with the violation of his rights as a consumer .
At the preliminary court hearing, plaintiff Vasyugova N.V. supported the stated demands, explained that on August 7, 2021. a loan agreement was concluded between her and PJSC Plus Bank in the amount of 352,724 rubles 43 kopecks for the purchase of a car. Of this loan amount, the bank sent the amount of 15,900 rubles to Ring-M LLC in accordance with the concluded service agreement. The defendant did not provide any services under the contract.
At the court hearing when considering the case, the representative of the plaintiff Shichenko V.A. supported the plaintiff's claims, explaining the same as above.
The defendant Ring-M LLC, having been notified of the time and place of the consideration of the case, did not send a representative to the court and did not file any objections to the claim.
The third party invited by the court to participate in the case of PJSC Plus Bank was notified by the court of the time and place of the consideration of the case.
After listening to the arguments of the plaintiff's representative and examining the evidence presented, the court comes to the following conclusions.
In accordance with Art. 166 of the Civil Code of the Russian Federation, a transaction is invalid on the grounds established by law, due to its recognition as such by the court (voidable transaction) or regardless of such recognition (void transaction).
A demand for the application of the consequences of the invalidity of a void transaction has the right to be submitted by a party to the transaction, and in cases provided for by law, also by another person.
The requirement to recognize a void transaction as invalid, regardless of the application of the consequences of its invalidity, can be satisfied if the person making such a demand has a legally protected interest in recognizing this transaction as invalid.
A transaction that violates the requirements of a law or other legal act and at the same time encroaches on public interests or the rights and interests protected by law of third parties is void, unless it follows from the law that such a transaction is contestable or other consequences of the violation not related to the invalidity of the transaction must be applied ( Part 2 of Article 168 of the Civil Code of the Russian Federation).
According to Art. Art. 421, 422 of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation), citizens and legal entities are free to enter into an agreement. Compulsion to enter into an agreement is not permitted, except in cases where the obligation to enter into an agreement is provided for by this Code, the law or a voluntarily accepted obligation. The parties may enter into an agreement, either provided for or not provided for by law or other legal acts. The terms of the agreement are determined at the discretion of the parties, except in cases where the content of the relevant term is prescribed by law or other legal acts.
From the provisions of Art. 16 of the Law of the Russian Federation of February 7, 1992 No. 2300-1 “On the Protection of Consumer Rights” it follows that the terms of the contract that infringe on the rights of the consumer in comparison with the rules established by law or other legal acts of the Russian Federation in the field of consumer rights protection are declared invalid.
According to Art. 32 of the Law “On the Protection of Consumer Rights”, the consumer has the right to refuse to fulfill the contract for the performance of work (rendering services) at any time, subject to payment to the contractor for the actual expenses incurred by him related to the fulfillment of obligations under this contract.
At the court hearing it was established that on August 7, 2021. between Vasyugova N.V. and PJSC Plus Bank entered into an agreement to provide a consumer loan for the purchase of a vehicle under the Autoplus program. According to clause 11 of the Agreement on the provision of consumer credit, the loan is provided by the bank, including to pay the premium under the Public Offer Agreement for the provision of VIP-assistance services in the amount of 15,900 rubles. According to clause 21 of the Consumer Loan Agreement, the minimum list of VIP-assistance services is: 24-hour dispatch service, 24-hour vehicle evacuation, technical assistance, independent auto expertise. Provider .
On the same day, the plaintiff submitted an application to join the terms of the Public Offer Agreement for the provision of VIP-assistance services (“Concierge+” No. WBADT41060GY27679) for a period of one year, with the plaintiff’s obligation to pay a premium in the amount of 15,900 rubles.
According to the personal account statement of Vasyugova N.V. and payment order No. 13262674, the Bank transferred funds on August 8, 2016. from the plaintiff’s account at Ring-M LLC as payment under the agreement for the provision of VIP-assistance services in the amount of 15,900 rubles.
From the Public Offer Agreement for the provision of VIP-assistance services (the “Concierge+” program) it follows that under this agreement the contractor “Ring-M LLC” provides the customer with the following types of services: 24-hour dispatch service, obtaining documents from the traffic police, obtaining a certificate from the Hydrometeorological Center, 24-hour car evacuation, technical assistance, legal advice, concierge services, independent auto expertise.
According to clause 6.2 of the agreement, it can be terminated by agreement of the parties or unilaterally at the initiative of one of the parties, in accordance with the procedure specified in clause 6.3 of the agreement. Thus, in the event of termination of the contract at the initiative of one of the parties, the party initiating the termination of the contract undertakes to send written notice of this to the other party at least 10 calendar days before the expected date of termination of the contract. Upon termination of the contract, the contractor returns part of the premium paid to the customer in the amount of 10% of the cost of services when the contract is valid for up to one month. The specified amount is reduced by 5% for each subsequent month of the contract, while an incomplete month is taken as a full one. The paid premium is not refundable if the customer, during the period of validity of the contract, contacted the contractor for the provision of the above services (clause 6.3.).
Thus, by applying to Ring-M LLC with an application to join the terms of the public offer agreement for the provision of services on the terms proposed by the defendant, the plaintiff voluntarily accepted the terms of the offer, acting in her own will and in her own interest, while complying with the terms of the offer agreement I have read and agreed with them.
When concluding a public offer agreement for the provision of VIP-assistance services, the parties proceeded from the principle of freedom of contract enshrined in Art. 421 of the Civil Code of the Russian Federation, having agreed on the terms of the concluded agreement, including the procedure for its termination. The conditions for termination of the contract, in particular unilaterally, were agreed upon by the parties at its conclusion, which complies with the provisions of Art. 32 of the Law “On Protection of Consumer Rights”.
The case materials do not contain evidence indicating that PJSC Plus Bank was forced to enter into an agreement for the provision of VIP-assistance services, as well as evidence of the presence of any reasons preventing the choice of lending conditions without concluding such an agreement, as required by Article 56 The Civil Procedure Code of the Russian Federation was not presented to the court. Based on the evidence available in the case materials and the above rules of law, the court comes to the conclusion that the condition on the procedure for terminating the contract for the provision of VIP-assistance services does not infringe on the rights of the plaintiff in comparison with the rules , established by law and other legal acts of the Russian Federation in the field of consumer rights protection, the conclusion of this agreement is based on the voluntary expression of the will of the parties, and therefore is not invalid due to insignificance and does not entail the application of the consequences of invalidity in the form of a full refund to the plaintiff of the paid premium.
Meanwhile, as follows from the case materials, on June 27, 2021. The plaintiff, on the basis of clause 6.3 of the agreement, sent to Ring-M LLC a notice of termination of the agreement for the provision of VIP-assistance services and the return of the paid amount of 15,900 rubles due to the defendant’s failure to provide services under the agreement. However, the plaintiff's demand was ignored by the defendant.
Since the consumer, on the basis of Art. 32 of the Law “On the Protection of Consumer Rights” has the right to refuse to fulfill the contract for the performance of work (provision of services) at any time, and clause 6.3 of the contract provides for the procedure for terminating the contract, then the contract for the provision of VIP-assistance services dated August 7, 2021. is considered terminated as of July 7, 2021 (that is, 10 days after the plaintiff sent notice).
Upon termination of the contract, the paid premium must be returned to the plaintiff in accordance with the procedure and conditions for its return established in clause 6.3 of the contract. Upon termination of the contract, the contractor returns part of the premium paid to the customer in the amount of 10% of the cost of services when the contract is valid for up to one month. The specified amount is reduced by 5% for each subsequent month of the contract, while an incomplete month is taken as a full one.
Accordingly, the court calculates the amount of the premium to be partially refunded as follows: September 2021: 15,900 rubles * 10% = 1,590 rubles, October 2021: 1,590 rubles. – 79.5 rubles (1590 rubles * 5%) = 1510.5 rubles, November 2021: 1510.5 rubles. – 75.5 rubles (1510.5 rubles * 5%) = 1435 rubles, December 2021: 1435 rubles - 71.75 rubles (1435 rubles * 5%) = 1363.25 rubles, January 2021: 1363.25 rubles. -68.16 rubles (1363.25 rubles * 5%) = 1295.09 rubles, February 2021: 1295.09 rubles -64.75 rubles (1295.09 * 5%) = 1230.34 rubles, March 2021 : 1230.34 rubles - 61.52 rubles (1230.34*5%) = 1168.82 rubles, April 2021: 1168.82-58.44 rubles (1168.82 rubles * 5%) = 1110.38 rubles. , May 2021: 1110.38 rubles - 55.52 rubles (1110.38 rubles * 5%) = 1054.68 rubles, June 2021: 1054.68 rubles - 52.73 rubles (1054.68 rubles * 5 %) = 1001.95 rubles, July 2021: 1001.95 rubles - 50.10 rubles (1001.95 rubles * 5%) = 951.85 rubles.
Considering the requirement to collect a penalty for violating the deadline for returning the amount paid under the agreement for the provision of VIP-assistance services, the court comes to the following conclusion.
By virtue of Art. 31 of the Law “On the Protection of Consumer Rights”, consumer demands to reduce the price for work performed (service provided), to reimburse expenses for eliminating deficiencies in work performed (service provided) on their own or by third parties, as well as for the return of money paid for work (service). amounts and compensation for losses caused in connection with the refusal to fulfill the contract, provided for in paragraph 1 of Article 28 and paragraphs 1 and 4 of Article 29 of this Law, are subject to satisfaction within ten days from the date of presentation of the corresponding demand.
For violation of the deadlines for satisfying individual consumer requirements provided for in this article, the executor shall pay the consumer a penalty (fine) for each day of delay, the amount and procedure for calculation of which are determined in accordance with paragraph 5 of Article 28 of this Law.
Paragraph 5 of Article 28 of the said Law provides that in case of violation of the established deadlines for performing work (providing a service), the contractor pays the consumer for each day (hour, if the period is defined in hours) of delay a penalty (penalty) in the amount of three percent of the price of performing the work (providing the service ), and if the price for performing work (rendering a service) is not determined by the contract for performing work (rendering services) - the total price of the order. The agreement on the performance of work (provision of services) between the consumer and the contractor may establish a higher amount of the penalty (penalty).
A penalty (penalty) for violation of the deadline for completing the work (provision of a service), its stage is collected for each day (hour, if the period is defined in hours) of delay until the completion of the work (provision of the service), its stage or the consumer submits the requirements provided for in paragraph 1 of this article.
The above circumstances established by the court are not related to poor-quality provision of services or to the violation of the terms of provision of services by the defendant; the claims made by the plaintiff are based on the provisions of Article 32 of the Law “On Protection of Consumer Rights”, which regulate these disputed relations, and do not contain such a measure of liability for the performer as a penalty for delay in the return of the amount paid under the contract in the event of the consumer’s voluntary refusal to fulfill the contract.
Since the provisions of Art. 31 and paragraph 5 of Art. 28 of the Law “On the Protection of Consumer Rights” are not applicable to controversial legal relations, in terms of requirements for the collection of a penalty, the claim of Vasyugova N.V. not subject to satisfaction.
Considering the claim for compensation for moral damage, the court comes to the following conclusions.
According to Art. 15 of the Law “On Protection of Consumer Rights”, moral damage caused to the consumer as a result of violation by the manufacturer (performer, seller, authorized organization or authorized individual entrepreneur, importer) of consumer rights provided for by the laws and legal acts of the Russian Federation regulating relations in the field of consumer rights protection is subject to compensation by the causer of harm in the presence of his fault. The amount of compensation for moral damage is determined by the court and does not depend on the amount of compensation for property damage.
At the same time, as stated in paragraph 45 of the Resolution of the Plenum of the Supreme Court dated June 28, 2012 No. 17 “On the consideration by courts of civil cases in disputes regarding the protection of consumer rights,” a sufficient condition for satisfying claims for compensation for moral damage to a consumer is the establishment of a violation of consumer rights.
The fact of violation of the rights of the plaintiff, as a consumer of services under the contract, in terms of non-refund of the premium paid under the contract, in accordance with clause 6.3 of the contract, was established by the court, since the funds paid as a premium under the contract for the provision of VIP-assistance services were not returned according to clause 6.3 of the agreement upon termination of the agreement. Therefore, the court considers it necessary to partially satisfy the plaintiff’s demands for compensation for moral damage in his favor, taking into account the nature of the moral and physical suffering caused to the consumer, based on the principle of reasonableness and fairness, in the amount of 1000 rubles. The rest of the plaintiff’s demands for compensation for moral damage cannot be satisfied.
The arguments of the plaintiff and his representative about the violation of the rights of the plaintiff as a consumer by the defendant’s failure to provide information on the formation of prices for services are not accepted by the court, since clause 2.1 of the agreement for the provision of VIP-assistance services establishes that Ring-M LLC provides the customer with a certain service list. Clause 3.2 of the agreement states that the cost of services under this agreement for 1 year is 15,900 rubles. Accordingly, the contract secures the plaintiff’s right to use specific types of services for one year, for a fee in the specified amount. In this case, a violation of the plaintiff’s right to information about the service, provided for in Art. 10 of the Law “On Protection of Consumer Rights” is not considered by the court.
According to paragraph 6 of Art. 13 of the Law “On Protection of Consumer Rights”, when the court satisfies the consumer’s requirements established by law, the court collects from the manufacturer (performer, seller, authorized organization or authorized individual entrepreneur, importer) for failure to voluntarily satisfy the consumer’s requirements a fine of fifty percent of the amount awarded by the court in favor of the consumer.
Therefore, a fine in the amount of (951.85 rubles + 1,000)/2 = 975.92 rubles is subject to recovery from the Bank in favor of the plaintiff.
In accordance with Art. 103 of the Code of Civil Procedure of the Russian Federation, the costs incurred by the court in connection with the consideration of the case, and the state duty, from the payment of which the plaintiff was exempted, are recovered from the defendant, who was not exempt from paying court costs, in proportion to the satisfied part of the claims. The defendant, Ring-M LLC, shall be charged a state duty to the local budget in proportion to the amount of satisfied claims in the amount of 331 rubles.
Based on the above, guided by Art. Art. 196 – 199 Code of Civil Procedure of the Russian Federation, court
Decided:
The claims of Natalya Vladimirovna Vasyugova are partially satisfied.
To recover from Ring-M LLC in favor of Natalya Vladimirovna Vasyugova 951 rubles 85 kopecks paid under the agreement for the provision of VIP-assistance services dated August 7, 2021, compensation for moral damages in the amount of 1000 rubles, a fine in the amount of 975 rubles 92 kopecks, in total 2,927 rubles 77 kopecks, the rest of the claim for recovery of the amount paid under the contract and the penalty is rejected.
To collect from Ring-M LLC a state duty in the amount of 331 rubles for the budget of the Zavyalovsky district.
The decision can be appealed on appeal to the Altai Regional Court within one month from the date of its production in final form, by filing a complaint through the Zavyalovsky District Court.
Judge Belousov M.N.
The final decision was made on November 28, 2017.
In what form should the material be presented?: Link with transition
Unilateral refusal to execute the lease agreement
As stated in the Civil Code, under a lease agreement, the lessor undertakes to provide the tenant with property for a fee for temporary possession and (or) use.
In this case, at the request of one of the parties, the agreement may be terminated early by the court.
The landlord may require this if the tenant:
- uses the property in significant violation of the terms of the contract or the purpose of the property;
- significantly deteriorates the property;
- fails to pay rent more than two times in a row after the expiration of the payment period established by the contract;
- does not carry out major repairs of the property within the time period established by the lease agreement, or when this is the responsibility of the tenant, provided for by law in other cases.
The lessor has the right to demand early termination of the contract only after sending the tenant a written warning about the need to fulfill his obligation within a reasonable time (Article 619 of the Tax Code of the Russian Federation).
In turn, the tenant may terminate the contract early by the court in cases where:
- the lessor does not provide the property for use by the lessee or creates obstacles to this in accordance with the terms of the agreement or the purpose of the property;
- the property transferred to the tenant has defects that prevent its use, which were not specified by the lessor when concluding the contract, were not known to the tenant in advance and should not have been discovered by the tenant during an inspection of the property or checking its serviceability when concluding the contract;
- the lessor does not carry out major repairs of the property, which is his responsibility, within the time period established by the lease agreement, or, if they are not included in the agreement, within a reasonable time period;
- Due to circumstances for which the tenant is not responsible, the property will be in a condition unsuitable for use.
In practice, very interesting developments are possible when the lease agreement is terminated.
Example
An agreement was concluded between the Pension Fund Administration (tenant) and an entrepreneur (lessor) to provide non-residential premises for temporary use. In connection with the opportunity to improve the working conditions of the team, the fund sent the entrepreneur a notice of termination of the contract before its expiration date. Subsequently, the tenant sent the landlord an agreement to terminate the lease, and then two copies of the act of transfer of the premises and property located in it. In response to these letters, the entrepreneur informed the fund that there were no conditions in the lease agreement providing for the tenant's right to unilaterally refuse to fulfill it. Thus, the landlord refused to terminate the lease agreement because he considered it still valid. To this end, the fund sent the entrepreneur a certificate of acceptance of non-residential premises and the keys to the front door of the building by a valuable parcel post, informing him that he would vacate the premises occupied under the lease agreement from a certain date. The entrepreneur appealed to the arbitration court with a demand to collect rent for the entire period provided for in the contract, and not until the date of the fund’s actual departure from the building. The appellate court recovered the rent arrears from the Pension Fund Administration, recognizing the lease agreement as valid and indicating that the actual early vacancy of the disputed premises by the tenant is not grounds for terminating his obligation to pay rent (determined by the Supreme Arbitration Court of the Russian Federation dated July 31, 2013 No. VAS-9513 /13 in case No. A04-6503/2012).
As can be seen from the example, the tenant, it would seem, did everything right - sent a notice of termination of the contract, warned (repeatedly even) the landlord of his intention to vacate the premises and thereby terminate mutual contractual obligations. But, as it turned out, he had no legal grounds for this.
Such controversial situations are not uncommon, which once again emphasizes the importance of understanding the essence of contractual relations, one’s rights in their implementation, or unilateral refusal of this burden.
The obligations of the parties under the lease agreement for buildings, structures and premises registered with government agencies terminate from the moment of refusal to fulfill its terms. The agreement is considered terminated regardless of whether state registration of the termination of such a lease agreement has been carried out or not. The preservation of a lease agreement in the Unified State Register of Rights does not mean that it has not ceased to be valid (clause 6 of the resolution of the Plenum of the Supreme Arbitration Court dated November 17, 2011 No. 73).
An interested party to a terminated contract has the right to unilaterally apply to the body that registered the contract with a demand to cancel the record of its registration. The authority’s refusal to cancel the relevant record citing the absence of a statement from the second party does not comply with the law and can be challenged in court. In this case, all expenses that the person has incurred or will be forced to incur in connection with the illegal refusal, as well as his lost profits, are subject to recovery from the registering authority (clause 7 of the draft Plenum of the Supreme Arbitration Court of the Russian Federation “On the consequences of termination of the contract”).
In the event of termination of the lease agreement, payments for the use of the property are subject to collection until the day of its actual return to the lessor. And the lessor has the right to demand the accrual of a penalty for late payment of payments on the day of their actual execution by the other party to the agreement (Article 622 of the Civil Code of the Russian Federation).
Penalty upon termination of a wagon rental agreement
When concluding a lease agreement, it is necessary to provide for the inclusion in the agreement of the right of each party to unilaterally terminate the agreement out of court. Life can be unpredictable and both the Landlord and the Tenant can resort to this standard.
When concluding a lease agreement, an important document is the acceptance certificate. The rent is accrued from the day of signing the Acceptance and Transfer Certificate of the leased object by the Lessor - Tenant and stops accruing from the date of signing the Acceptance and Transfer Certificate by the Tenant to the Lessor.
Often parties to a lease agreement use a deposit. This is a sum of money used as security for the Tenant's obligations. In case of violation by the Lessee of the terms of the agreement or early termination of the agreement, this amount may be used as compensation for expenses or lost profits by the Lessor. Sometimes the deposit is replaced with a fine, but this does not change the essence of the penalty upon termination of the contract as a compensation payment.
A penalty for termination of a lease agreement for carriages, as well as residential and non-residential premises, is an excellent mechanism for protecting the rights of both the Lessee and the Lessor. Proper use of such a tool as a penalty upon termination of a contract will help reduce the financial risks of your business.
Unilateral refusal to execute a contract for paid services
Under a contract for the provision of paid services, the contractor undertakes, on the instructions of the customer, to perform certain actions or carry out any activity, and the customer undertakes to pay for these services. The Civil Code provides for the rights of both the contractor and the customer to unilaterally refuse obligations under such an agreement. At the same time, the property consequences of such a refusal are established for the parties. In particular, the contractor has the right to refuse obligations under the contract only if the customer is fully compensated for losses (clause 2 of Article 782 of the Civil Code of the Russian Federation), and the condition for the customer’s refusal to fulfill obligations under the contract is payment to the contractor of the expenses actually incurred by him (clause 1 of Art. 782 of the Civil Code of the Russian Federation).
The customer’s refusal to fulfill the contract is possible both before the start of the service and during the provision of the service, but not after the service has been fully provided (Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated 09/07/2010 No. 2715/10 in case No. A64-7196/ 08-23, ruling of the Supreme Arbitration Court of the Russian Federation dated March 19, 2007 No. 2257/07 in case No. A53-4372/2006-C1-52).
The customer is not required to provide reasons for refusal to fulfill obligations. The reason for the unilateral refusal of the contract for the provision of paid services declared by the customer has no legal significance (resolution of the Federal Antimonopoly Service of the Volga Region dated November 17, 2011 in case No. A55-20641/201).
An agreement for the provision of paid services cannot establish restrictions on the right to unilaterally refuse to fulfill the agreement, including penalties for such refusal. This conclusion is confirmed by judicial practice (rulings of the Supreme Arbitration Court of the Russian Federation dated 05/21/2013 No. VAS-5767/13 in case No. A40-60948/2012-144-295, dated 04/03/2013 No. VAS-4080/13 in case No. A40-12828/12 -102-114).
At the same time, a contract for the provision of paid services may contain a condition on the need to warn the contractor about the refusal of the contract within a certain period and (or) on the responsibility of the customer for failure to fulfill this condition (resolution of the Federal Antimonopoly Service of the Volga District dated May 12, 2010 in case No. A57-20634/2009 ). Meanwhile, such terms of the contract do not limit the right to unilaterally refuse it and are the will of the parties, which does not contradict the current legislation (Articles 421, 422 of the Civil Code of the Russian Federation).
An agreement for the provision of paid services cannot establish restrictions on the right to unilaterally refuse to fulfill the agreement, including penalties for such refusal.
If a decision is made to terminate the contract, one of the parties should send a notice of this to the address. There is no approved form of notification, but we draw your attention to the fact that its content should not have any discrepancies.
For example, a claim containing an intention to terminate the contract and a demand to return the advance payment may be qualified by the court as a unilateral refusal of the customer from the contract for paid services (resolution of the Federal Antimonopoly Service of the Central District dated August 19, 2011 in case No. A14-9544/2010/309/15) . The letter may not contain a direct indication of the desire to terminate the contract, but, according to the court, the reflection in it of the demand for the return of the paid advance is the exercise of the right to unilateral refusal to execute it (resolution of the Federal Antimonopoly Service of the North Caucasus District dated August 22, 2011 in case No. A53 -5678/2010). And the unilateral refusal of the contract for the provision of services for a fee by the customer requires compensation to him for all expenses incurred in connection with the execution of the contract.
If the contractor has received an advance payment, then in the event of a unilateral refusal to fulfill the contract (by either party) and its non-repayment, the question of unjust enrichment of the contractor arises, since no services were provided to them. However, he may have incurred any costs associated with preparing to provide them. In this case, the contractor must return the advance payment minus such amounts. This position is supported by judicial practice (resolution of the Federal Antimonopoly Service of the North-Western District dated May 30, 2011 in case No. A21-6716/2010). And in case of unjust enrichment, interest may be charged on the unreturned amount of the prepayment for the use of other people's funds.
It should be noted that the condition of the contract, according to which if the customer refuses to fulfill the contract, the advance will not be returned to him, is void (resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated 09/07/2010 No. 2715/10 in case No. A64-7196/08-23 ).
New judicial practice of taking into account the conditions of a penalty for termination of a contract
When determining the amount of compensation for cancellation of the contract, the parties must act in good faith and reasonably; it cannot be excessively inflated, in particular the maximum, and correspond to the full cost of services regardless of the volume of services actually provided and the results achieved, since in this case the customer will be subject to unfavorable legal consequences in the form of an obligation to pay the amount of compensation regardless of the services provided and the results obtained (resolution of the Arbitration Court of the Moscow District dated November 7, 2014 No. F05-12287/14), and the compensatory nature of the fee for canceling the contract is lost (decision of the Arbitration Court of Moscow dated 6.05.15 in case No. A40-29674/2015).
The court also recognizes as unacceptable the establishment of a fee for canceling a contract in the amount of the full cost of the entire remuneration under the contract or most of it, i.e., for almost the entire period of validity of the terminated contract (resolution of the Arbitration Court of the Moscow District dated November 6, 2014 No. F05-12254 /14). This condition should be placed in the section on payment so that in the event of a dispute the court does not associate it with a measure of liability in relation to the customer.
In this case, the provisions of Art. will not even be applied to the amount of compensation declared by the performer. 333 of the Civil Code of the Russian Federation on reducing the penalty in case of its obvious disproportion to the consequences of the violated obligation. The court will simply consider such a condition on liability for repudiation of the contract to be invalid, since repudiation of the contract in any case is a legal action, while a penalty can only be established in case of violation of an obligation (resolution of the Federal Antimonopoly Service of the Ural District dated June 2, 2014 No. F09- 2951/14).
The customer’s right to unilaterally withdraw from the contract cannot be ensured by a penalty, since the customer can exercise it at any time, although in judicial practice one can find an approach due to which in the business sphere there are no grounds for protecting the interests of the weaker party; at the same time, the parties to the contract are free to choose the type of compensation for refusal of the contract (decision of the Arbitration Court of the Sverdlovsk Region dated December 15, 2014 in case No. A60-44935/2014), therefore they are not deprived of the opportunity to agree on a penalty in case of refusal of the contract (resolution of the Arbitration Court Court of the Volga-Vyatka District dated April 5, 2016, No. F01-618/2016). In this situation, the penalty, in fact, serves as a compensation (resolution of the Federal Antimonopoly Service of the North-Western District dated February 19, 2014 No. F07-10413/2013), although in judicial practice the prevailing position is that it is impossible to collect a penalty in the event of a unilateral refusal of the contract.
The penalty has a dualistic legal nature, being a way of ensuring the fulfillment of obligations and at the same time a measure of responsibility for its violation. In the case where the right to unilateral refusal of a contract is initially provided for by law, its implementation is always a lawful action, therefore there is nothing to ensure and nothing to hold accountable for (resolution of the Arbitration Court of the Volga District dated June 2, 2015 No. F06-23363/ 2015).
Thus, in one case, the court indicated that the agreement in the contract on a penalty to be recovered from the customer only for unilateral early termination of the contract contradicts the legal nature of the penalty as a measure of liability applied for violation of civil rights. Since the early termination of contractual relations, when established by law or contract, cannot in itself be qualified as a breach of obligation and as a basis for the party to become liable for the early termination of the contract (resolution of the Arbitration Court of the Moscow District dated June 6, 2016 No. F05-5662/2016).
In practice, a case was considered when, in the concluded rental agreement, the parties stipulated that upon termination of the agreement at the initiative of the landlord, he was obliged to pay a fine in the amount of the monthly rate of rent for living in the apartment. The lessor exercised its right to terminate the contract, but the parties signed an additional agreement, which stated that it was terminated precisely on the specified basis.
In such a situation, in addition to the need for the employer to justify the legality of collecting a penalty for abandoning the contract, it was also necessary to prove that he had the right to receive it at all. This was due to the fact that the penalty, as follows from the literal content of the relevant terms of the contract, was agreed upon by the parties specifically for termination of the contract at the initiative of the lessor, which presupposes a unilateral transaction by him. The conclusion of an agreement on this matter can be regarded as the agreed expression of will of the parties to terminate the contract, and an indication of the original initiative of the lessor does not change the situation, despite the fact that the parties in the agreement itself did not stipulate the right of the lessee to receive a penalty, thereby determining the procedure for terminating cooperation.
In defense of the employer’s position in the situation under consideration, the following arguments can be given. The penalty was agreed upon for termination of the contract at the initiative of the lessor, which was reflected in the text of the concluded agreement on termination of the contract. The parties could have concluded it without including a condition on the grounds for termination, but they indicated it and signed the document without any objections, thereby recognizing the circumstances set out in it.
Since the penalty is established by the contract for its termination at the initiative of the lessor, it does not matter in what form the parties took it - concluding an agreement signed by both parties instead of making a unilateral transaction by the lessor. Formalizing the termination of the contract by concluding a bilateral agreement does not change the relevant basis, unlike the situation if the parties had signed the agreement without including such a condition in it, which would indicate that the tenant does not have the right to collect a penalty. The trial in this case has not yet been completed, we can only make predictions, but in any case, in such cases, we may wish to participants in civil transactions not to create such controversial situations, so as not to complicate their lives.
In the above example, since the tenant was informed by the landlord of his desire to withdraw from the contract, he should not have signed any agreements with him and waited until the notification was received. In addition, initially, when agreeing on the terms of the contract to be concluded, in no case should it have formulated compensation for cancellation of the contract as a penalty, which raises two questions at once: about the legality and the possibility of reducing it on the basis of Art. 333 Civil Code of the Russian Federation. To increase the chances of collecting compensation, it should be designated as compensation, since the dominant position in judicial practice is the impossibility of establishing a penalty in case of refusal of a contract for the provision of services.
The possibility of the parties to the contract for the provision of services agreeing on a different mode of refusal from the contract does not mean the legality of establishing a sanction (resolution of the Arbitration Court of the Moscow District dated December 1, 2014 in case No. A40-1860402/13-98-1626, FAS West Siberian District dated November 5. 03 in case No. F04/5661–819/A67-2003), therefore, the provision for compensation for cancellation of the contract should be included in the section on payment and formulated precisely as a fee - compensation in the form of part of the established price.
Compensation for cancellation of the contract also cannot be formulated in relation to the income that the contractor could have received if the customer had not declared the refusal, since in this case the court may have a strong association with lost profits, for the recovery of which the contractor must prove its fact and amount , the customer’s guilt, the presence of a direct (immediate) cause-and-effect relationship between the customer’s behavior and the infliction of losses on the contractor (resolution of the Moscow District Arbitration Court dated November 6, 2014 in case No. A40-135254/13-110-664).
Unilateral refusal to perform a contract
Under a contract, one party (contractor) undertakes to perform certain work on the instructions of the other party (customer) and deliver the result to the customer, and the customer undertakes to accept the result of the work and pay for it.
The customer may refuse to perform the contract and demand compensation for damages if the contractor does not begin to fulfill the work contract in a timely manner or performs the work so slowly that completing it on time becomes clearly impossible, and also if during the execution of the work it becomes obvious that it will not be completed properly, and the identified deficiencies will not be eliminated within the agreed period (clauses 2, 3 of Article 715 of the Civil Code of the Russian Federation).
If the need for additional work is identified, the customer may not agree to exceed the price of the work approximately determined by the contract and refuse the contract (Clause 5 of Article 709 of the Civil Code of the Russian Federation). The customer’s refusal to fulfill the contract is also possible when the work has already been completed, but the shortcomings in the result of the work have not been eliminated by the contractor or are significant and cannot be eliminated in principle (Article 723 of the Civil Code of the Russian Federation).
One of the reasons for termination of the contract by the customer is also the failure of the contractor to complete the work on time. Upon the occurrence of such an event, the contractor must return the unused advance in full or part thereof. The contractor should confirm partial completion of the work under the contract by submitting invoices for the transfer of project documentation, acts of acceptance of work performed, as well as evidence of the customer’s evasion from signing them. Otherwise, the unreturned prepayment amount will be recognized as unjust enrichment and interest will be charged on it (resolution of the Federal Antimonopoly Service of the Far Eastern District dated August 27, 2013 No. F03-3916/2013 in case No. A73-14664/2012, resolution of the Federal Antimonopoly Service of the Northwestern District dated August 15, 2013 in case No. A56-62667/2012, resolution of the Federal Antimonopoly Service of the Central District dated June 26, 2013 in case No. A36-3281/2012).
The customer may, at any time before delivery of the result of the work to him, refuse to fulfill the contract by paying the contractor part of the established price in proportion to the part of the work performed before receiving notice of the customer’s refusal to fulfill the contract. The customer is also obliged to compensate the contractor for losses caused by termination of the contract, within the difference between the prices for all work and those paid for work already completed (Article 717 of the Civil Code of the Russian Federation).
In the process of fulfilling contractual obligations, the contractor is obliged to immediately warn the customer and, until receiving instructions from him, to suspend work if the following are discovered:
- unsuitability or poor quality of the material, equipment, technical documentation provided by the customer or the item transferred for processing (processing);
- possible adverse consequences for the customer of following his instructions on the method of performing the work;
- other circumstances beyond the control of the contractor that threaten the suitability or durability of the results of the work performed or make it impossible to complete it on time.
If the customer, despite timely and reasonable warnings about such circumstances, does not take the necessary measures to eliminate the circumstances that threaten the execution of the work, the contractor has the right to refuse to perform the contract and demand compensation for losses caused by its termination (Article 716 of the Civil Code of the Russian Federation).
How to correctly draw up and submit an application or letter of termination of a contract: sample notice
Submitting a letter of notice of termination or a statement of refusal to execute a contract for paid services is a mandatory step towards its termination. It is drawn up in simple written form and transferred to the other party. This can be done either in person or by post with acknowledgment of delivery. If you choose the first option, it is recommended to keep a copy with the signature of the person accepting it and a note on the date of delivery. If the letter is sent by mail, you should order a return receipt and make an inventory of the attachment.
You can send notification in other ways if it is specified in the contract itself, for example by fax. As in the case of a termination agreement, the law does not contain a strict form of the document in question, but it seems correct to follow the rules of business conduct.
Therefore, the notification usually includes the following information:
- name and details of the organization to which the document is sent;
- name of the document: “Notification of unilateral termination of the contract for compensation;
- date and place of document preparation;
- details of the service agreement: number and date;
- names of the parties to the agreement, as they were indicated in the agreement;
- reasons prompting the party to terminate it (if we are talking about refusal to perform, this clause is optional);
- article of the Civil Code of the Russian Federation on the basis of which the contract is terminated;
- an indication of the intention to compensate for costs or losses, or to fulfill any other obligations arising from the termination of the contract;
- the moment from which the agreement will be considered terminated.
The document is signed and, if applicable, stamped. A sample notice of termination of a service agreement can be downloaded on our website.
When obligations end
In a pre-trial procedure, the parties can establish that the obligations under the contract are changed or terminated not from the moment the agreement is concluded, but from a certain date or from the date of the occurrence of the event specified in it.
If the contract is amended or terminated in court, the obligations of the parties are considered changed or terminated from the moment the corresponding court decision enters into legal force. The parties do not have the right to establish another point (clause 3 of Article 453 of the Civil Code of the Russian Federation).
For your information
In case of unilateral refusal of the contract, the customer must pay the contractor the actual expenses incurred solely in connection with the provision of services to the customer (determination of the Supreme Arbitration Court of the Russian Federation dated December 24, 2013 No. VAS-17829/13 in case No. A56-38647/2012).
Thus, the expenses that the contractor may incur after the customer refuses to fulfill the contract are not compensated (resolution of the Federal Antimonopoly Service of the West Siberian District dated April 29, 2010 in case No. A46-23676/2009). Such expenses may represent costs arising after the customer’s refusal, and not be related to the subject of the contract - severance pay for dismissed employees, costs for removing the contractor’s property from the customer’s territory, and so on.
As a result of termination of the contract, the debtor’s obligation to perform actions that are the subject of the contract ceases (for example, to ship goods under a supply agreement, to perform work under a contract, to issue funds under a loan agreement, etc.). In this case, one of the parties, as a rule, suffers economic losses, which, by a court decision, the other party is obliged to compensate (clause 1 of Article 393 of the Civil Code of the Russian Federation). The penalty established in case of improper fulfillment of the agreed obligation is accrued until the date of termination of the contract.
To impose liability in the form of recovery of damages, it is necessary to prove a violation of a contractual obligation, the fact of causing losses and their amount, as well as a cause-and-effect relationship between the violation and the damage. Failure to prove one of these elements entails refusal to satisfy such claims.
Penalty for early termination of a service agreement
Current legislation separately stipulates the possibility of unmotivated unilateral termination of the contract by either party to the contract for the provision of services (Article 782 of the Civil Code of the Russian Federation). A mandatory condition for such termination is compensation for all expenses (losses) incurred by the other party.
The purpose of including such a rule is to compensate for inconveniences incurred by the other party, to cover losses or damages incurred in the performance of this contract. The parties, taking advantage of the freedom of contract, can establish this compensation in the form of a fixed amount - a fine, or associate it as a percentage with the losses incurred.
If the penalty for unilateral refusal of the contract is determined by reference to the expenses incurred, we recommend that it be mandatory to stipulate that the expenses must be documented.
But, in addition, the parties can also stipulate the payment of certain compensation, depending on what circumstances led to the cancellation of the contract.
INTERESTING : find out how to reduce any penalty with the help of our lawyer
Not to terminate, but to change
At the request of the interested party, the contract may not be terminated, but amended by the court, if the following conditions are simultaneously met:
- at the time of concluding the contract, the parties assumed that such a change in circumstances would not occur;
- the change in circumstances was caused by reasons that the interested party could not overcome after their occurrence with the degree of care and prudence that was required of it by the nature of the contract and the conditions of turnover;
- execution of the contract without changing its terms would so violate the relationship of property interests of the parties corresponding to the contract and would entail such damage for the interested party that it would largely lose what it had the right to count on when concluding the contract;
- It does not follow from business customs or the essence of the contract that the risk of changes in circumstances is borne by the interested party (Article 451 of the Civil Code of the Russian Federation).
In other words, amendment of the contract due to a significant change in circumstances is permitted by court decision in exceptional cases. In such cases, when termination of the contract is contrary to public interests or will entail damage for the parties that significantly exceeds the costs necessary to execute the contract on the terms changed by the court.
Ekaterina Egorova,
for the magazine "Practical Accounting"
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