In case of breach of contract. Material breach of contract

Failure to fulfill obligations under the contract is a deliberate or forced violation of the conditions provided for in it. About what it is and what may be the consequences of non-fulfillment of the obligations assumed, the material we propose below will tell.

Failure to fulfill obligations under an agreement in the Civil Code of the Russian Federation

According to Article 307 of the Civil Code of the Russian Federation, an obligation is recognized as the need for one participant in a transaction to perform certain actions in favor of another (to transfer things, provide services, etc.) or, on the contrary, not to perform them. At the same time, in view of the provisions of Article 308 of the Civil Code of the Russian Federation, an obligation implies the simultaneous participation of 2 parties in it: the debtor and the creditor.

In the event that each of the parties is both a debtor and a creditor, we are talking about a bilateral obligation. So, according to Article 779 of the Civil Code of the Russian Federation, when concluding a contract for the provision of services, the contractor assumes the obligation to provide such services, and the customer, in turn, undertakes to pay for these services.

Article 307 of the Civil Code of the Russian Federation obliges the parties, when fulfilling an obligation, to act in good faith, that is, to provide each other with mutual assistance and provide necessary information in order to respect the mutual rights and interests of each other, as well as to achieve the purpose of the concluded transaction. If the debtor (in a bilateral obligation they are both parties) does not fulfill the obligations assumed, then the creditor, by virtue of the provisions of Article 308.3 of the Civil Code of the Russian Federation, acquires the right to demand its execution in kind, unless otherwise specifically provided for a particular type of transactions.

If such performance is impossible, the creditor has the right to demand from the debtor the payment of a sum of money commensurate with the value of what is due to him. At the same time, in addition to the actual execution of the transaction, the debtor may be additionally held liable for his bad faith, which follows from the content of paragraph 2 of Article 308.3 of the Civil Code of the Russian Federation.

Improper performance

Article 309 of the Civil Code of the Russian Federation indicates that the obligations assumed by the debtor must be fulfilled in full compliance with the norms of the law or the contract. As a result, between the conscientious behavior of the debtor and default on the obligation, an intermediate situation is possible when the creditor performs the obligation in violation of the terms of the transaction, which causes losses to the creditor.

A vivid example of such behavior is the delay in performance, that is, non-compliance with the terms specified in the contract. In this case, the creditor is not entitled to demand performance by virtue of the provisions of Article 308.3 of the Civil Code of the Russian Federation, however, based on the norms of Article 393 of the Civil Code of the Russian Federation, it may demand compensation for losses caused by the debtor's bad faith.

Consequences of default

Failure to fulfill obligations under the contract or their fulfillment not in full accordance with the terms of the transaction involves causing losses to the creditor. According to Article 15 of the Civil Code of the Russian Federation, the injured person has the right to demand full compensation for losses from the perpetrator, unless their amount is specifically limited by law or by agreement between the parties.

At the same time, according to the norms of the same Article 15 of the Civil Code of the Russian Federation, the following are recognized as losses:

  1. Direct damage.
  2. Lost profit.

Direct Damage

Direct losses are expenses that the creditor has already made through the fault of the debtor or will have to make subsequently to restore his violated rights. Thus, by virtue of the requirements of Article 616 of the Civil Code of the Russian Federation, the lessee is obliged to keep the leased thing in good condition and, if necessary, to produce it Maintenance. In the event of improper performance of this obligation, the condition of the thing deteriorates significantly, which entails the costs of the lessor for its repair, which in this case will be losses to be reimbursed at the expense of the lessee.

Lost profit

Under indirect losses (lost profits) are understood not the expenses incurred, but the income that the creditor should have received if the debtor had fulfilled the obligations assumed in good faith. Due to the inability to accurately determine the amount of lost profits (calculations are obviously probabilistic), paragraph 5 of Article 393 of the Civil Code of the Russian Federation indicates that in such situations the court should not reject the claims brought because of doubts about their reliability, but take measures to determine their fair and reasonable size. In doing so, the court must take into account the measures actually taken to generate income and the preparations made for this purpose.

Paragraph 3 of the Decree of the Plenum of the Armed Forces of the Russian Federation “On the Application of ...” dated March 24, 2016 No. 7 provides an example regarding the calculation of lost profits. The Contractor, due to his bad faith, did not perform in a timely manner repair work store, thereby creating obstacles to its normal commercial activities. The lost profit of the customer in this case can be calculated based on the amount of his profit for the same period before the defendant violated the terms of the contract. At the same time, the customer must provide evidence that he was going to carry out retail trade in this store, and not sell it, for example, or rent it out.

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Liability for failure to fulfill obligations under the contract

Bringing to justice in legal practice means the onset of adverse consequences for the guilty person. At the same time, it is necessary to distinguish between the consequences that occur due to the application of enforcement measures to the debtor, and the actual liability for non-performance.

So, for example, Article 396 of the Civil Code of the Russian Federation indicates that compensation for losses (payment of a penalty for improper performance) does not relieve the debtor from fulfilling the obligations stipulated by the contract (for example, to transfer things). A similar approach is provided for in Article 395 of the Civil Code of the Russian Federation in relation to monetary obligations, which indicates that the payment of interest for overdue debt does not exempt from paying the debt itself.

Losses and forfeit

According to Article 330 of the Civil Code of the Russian Federation, a penalty is the amount of money that the debtor must pay in accordance with the norms of the law or the contract to the creditor in case of non-performance or improper performance of his obligation. At the same time, it can be paid both in case of non-fulfillment of the obligation under the contract (thereby freeing the debtor from its further fulfillment), and in case of improper fulfillment (and this, according to Article 396 of the Civil Code of the Russian Federation, does not exempt him from fulfillment).

As for the relationship of penalties and losses, the parties can provide in their agreement 4 different options, in accordance with Article 394 of the Civil Code of the Russian Federation (with the first option applied if the parties do not decide to use one of the remaining ones):

  1. According to the general rule of Article 394 of the Civil Code of the Russian Federation, losses are compensated in the part that is not covered by the penalty.
  2. The recovery of a penalty excludes the recovery of damages.
  3. In addition to the penalty, damages are recovered in full.
  4. The creditor can choose whether to collect damages or penalties.

The fault of the debtor

A prerequisite for the onset of liability for non-fulfillment of obligations under the contract or their improper fulfillment is the presence of the debtor's fault. In contrast to the norms of criminal or administrative law, where the guilt of a person is subject to proof, in civil circulation the guilt of the debtor, by virtue of the provisions of Article 401 of the Civil Code of the Russian Federation, is obviously assumed. At the same time, the debtor is obliged to prove his innocence, that is, the adoption of all measures necessary for the fulfillment of obligations, on his own.

V entrepreneurial activity By virtue of paragraph 3 of Article 401 of the Civil Code of the Russian Federation, only the onset of emergency circumstances (accidents, hostilities, the enactment of prohibitions and restrictions by the state, etc.) can serve as a condition for exemption from liability. At the same time, such a circumstance as the debtor's lack of funds is not a basis for exemption from liability.

Legal consequences of violation of the terms of contracts for the supply and provision of services

For a more complete disclosure of the topic, let's consider the issue of the specifics of liability using the example of 2 types of civil law transactions (contracts for the supply and provision of services).

Failure to fulfill obligations under the supply agreement

Article 523 of the Civil Code of the Russian Federation lists cases when a party (supplier or buyer) has the right to refuse a transaction unilaterally. For example, the supplier has the right to refuse the transaction if the buyer has repeatedly violated the terms of payment for the goods or several times the product has not been sampled. If the supply contract is terminated on these grounds, the supplier has the right to demand compensation from the buyer for the difference between the price of the goods specified in the contract and the reasonable price (but less) at which the supplier was forced to sell the goods he has to another person due to violations committed by the buyer (Article 524 Civil Code of the Russian Federation).

If the transaction with the new buyer has not been completed in relation to the unsold goods, the supplier may demand from the buyer the difference between the contract price and the current price for this product. At the same time, the payment of the specified compensation does not relieve the buyer from compensation for other losses or penalties.

Failure to fulfill obligations under a service agreement

Another special (assuming several alternative options) method of compensation for losses is provided for by Articles 723 and 783 of the Civil Code of the Russian Federation in case of improper provision of services by the contractor. In such a situation, the customer may, at his option, require:

  1. Elimination of deficiencies at the expense of the contractor within a reasonable time.
  2. Reducing the contract price based on the actual volume of services rendered.
  3. Reimbursement of their expenses for the elimination of deficiencies, if such a right of the customer is provided for by the contract.

Summing up, it remains to note that certain types agreements listed in the Civil Code of the Russian Federation, additional or alternatives liability of the parties for non-fulfillment of the terms of a specific transaction in addition to the measures determined by the norms of part 1 of the Civil Code of the Russian Federation. This is clearly demonstrated in the examples of service contracts and supply contracts.

The variety of rights and obligations of the parties under the contract gives rise to various forms of responsibility. These include: payment of a penalty; obligation to pay damages; refusal to further perform the contract; the right of the contractor to withhold the result of the work and other property of the customer until the customer fulfills his obligation to pay for the work.

The parties are responsible for violation of the deadlines for the performance of work and the deadlines for performing certain actions that are prescribed to them by the contract. Delay in the performance of duties also entails the transfer of risks of accidental death or accidental damage to property to the party guilty of the delay in performance, which can lead to significant and irreparable losses (Article 705 of the Civil Code).

The Contractor shall be liable for violation of the initial, final and intermediate deadlines for the performance of work. If the deadline is violated due to the fault of the contractor and the performance of this work has lost interest for the customer, he may refuse to accept the result of the work and demand compensation for losses (Article 708 of the Civil Code).

If the customer does not fulfill reciprocal obligations under the contract and this prevents the fulfillment of the contract, then the contractor may refuse to perform the contract and demand compensation for losses, unless otherwise provided by the work contract (Article 719).

If the customer refuses to accept the work performed, and the contract does not provide otherwise, the contractor may, after a month from the date of the obligation of the contractor, transfer the result of the work to the customer and, subject to a subsequent two-time warning to the customer, sell the result of the work, and pay the proceeds minus all payments due to the contractor in the name of the customer on deposit (Article 720 of the Civil Code). The contractor is responsible for the inadequate quality of work.

The customer has the right, in case of violation of the conditions on the quality of the result of the work, unless otherwise provided by law or the contract, to demand from the contractor:

  • - gratuitous elimination of deficiencies within a reasonable time, or
  • - a commensurate reduction in the price set for the work, or
  • - reimbursement of their expenses for the elimination of deficiencies, when the right of the customer to eliminate them is provided for in the contract.

The customer has the right to refuse to perform the contract and demand compensation for the damages caused, if deviations in work from the terms of the work contract or shortcomings in the result of work have not been eliminated within the reasonable time period established by the customer, or are significant and irreparable (Article 723). For the presentation of claims related to shortcomings in the result of work, a period is set - two years from the date of transfer of the result of work, unless other terms are provided by law, contract or business customs (Article 724 of the Civil Code).

Failure to fulfill obligations under the contract - the Civil Code of the Russian Federation provides for special legal consequences in connection with it. We will talk about what the concept of obligation includes, what types of it are, and what failure to fulfill the obligations under the contract can lead to in this article.

What is an obligation and its non-compliance

The concept of obligation is given in Art. 307 of the Civil Code of the Russian Federation and is considered as a situation in which the party, called the debtor, undertakes to the second party (the creditor) to perform certain actions or, conversely, not to perform the actions agreed in advance. The obligations of the debtor correspond to the right of the creditor to demand its performance. The article under consideration does not name an exhaustive list of situations in which obligations are born, due to their diversity.

The Civil Code of the Russian Federation indicates the need for the parties to behave towards each other in good faith, provide the necessary assistance to fulfill the obligation, and also provide the necessary information (clause 3, article 307 of the Civil Code of the Russian Federation).

The essence of the obligation itself is:

  1. In establishing the relationship of individuals with each other.
  2. Obligation of one party of the arisen obligation to certain behavior under the threat of applying measures of civil liability (Article 396 of the Civil Code of the Russian Federation), in other words, establishing responsibility for its non-fulfillment.

Types of obligations

The main criterion for the emergence of obligations is the basis for the occurrence, according to which it is customary to divide them into 2 large groups:

  1. Arising from the performance (non-performance) of contracts, in other words, contractual.
  2. Non-contractual (law enforcement).

According to the grounds for the emergence of an obligation, there are:

  • arising from contracts and other transactions;
  • arising from the commission of unlawful acts;
  • arising from the occurrence of legal facts.

Depending on the civil law status of the parties to the obligation:

  • arising from their execution by the parties of entrepreneurial activity;
  • arising with the participation of citizens-consumers.

According to the ratio of the arisen rights and obligations:

  • simple - those in which the parties are bound by only 1 obligation, for example, in a loan;
  • complex, that is, those in which there are more rights and obligations, for example, when supplying products.

By definition of execution:

  • alternative, that is, those in which the debtor must perform 1 or more actions (Article 308.1 of the Civil Code of the Russian Federation);
  • optional, that is, those in which the party can replace the main performance with another one (Article 308.2 of the Civil Code of the Russian Federation).

In order of importance:

  • basic;
  • additional, that is, those that ensure the fulfillment of the main obligation.

According to the subjects of fulfillment of obligations, they are usually divided into the following groups and subgroups:

  1. With multiple faces:
    • equity shares (Article 321 of the Civil Code of the Russian Federation);
    • solidarity (Article 322 of the Civil Code of the Russian Federation);
    • subsidiary (Article 399 of the Civil Code of the Russian Federation).
  2. With the participation of third parties:
    • recourse, that is, those in which duties are shifted to another person (clause 2, article 325 of the Civil Code of the Russian Federation);
    • obligation in favor of a third party (Article 430 of the Civil Code of the Russian Federation);
    • duties performed by third parties (Article 308 of the Civil Code of the Russian Federation).
  3. In which there is a change of faces:
    • cession (Article 382 of the Civil Code of the Russian Federation);
    • subrogation (Article 965 of the Civil Code of the Russian Federation);
    • transfer of debt (Article 391 of the Civil Code of the Russian Federation).

Fulfillment of obligations, consequences and liability in case of non-fulfillment

The proper performance of obligations should be understood as legal actions performed by the parties. Proper performance of an obligation in all cases terminates it (clause 1, article 408 of the Civil Code of the Russian Federation). By virtue of the provisions of Art. 311 of the Civil Code of the Russian Federation, the party has the right not to accept the performance of the obligation in parts.

Based on Art. 309.2 of the Civil Code of the Russian Federation, all costs associated with the proper performance of duties are borne by the debtor. This provision is confirmed by the decision of the AS ZSO dated July 20, 2016 in case No. A27-9448 / 2015.

A unilateral refusal to fulfill the obligations assumed is not allowed (decision of the Arbitration Court of the Sverdlovsk Region dated October 20, 2016 in case No. A60-31242 / 2016), except for cases that are prescribed by law or other acts (Article 310 of the Civil Code of the Russian Federation).

Failure to fulfill obligations, including partial, incomplete fulfillment, is the basis for applying measures of property liability to the guilty party. More details about this can be found in Resolution No. 54 of the Plenum of the RF Armed Forces dated November 22, 2016.

Material violations of the terms of the contract

Under a material breach of the terms of the contract, it is customary to understand breaches that may cause significant damage to the other party or even contribute to the deprivation of what it had the right to count on when concluding the contract (clause 2, article 450 of the Civil Code of the Russian Federation).

The essential nature of the violation in this case is not in the amount of damage caused, but in the ratio between what the party could expect from the performance of the obligation and what it lost as a result of its non-performance.

In other words, when the courts consider the issue of the materiality of violations of the terms of the contract, materials will be examined that prove a significant difference between what the party expected when signing the contract and what was actually obtained (decision of the Arbitration Court of the Sverdlovsk Region dated September 8, 2016 in case No. A60-30641/2016).

IMPORTANT! Civil liability entails not only significant, but also any violations that caused losses or harm to the counterparty.

Types of liability for failure to fulfill obligations under the contract

Liability under the Civil Code of the Russian Federation is of a property nature. Its main distinguishing feature is the obligation of the party that violated the obligation or caused harm to pay certain amounts.

Liability for non-compliance with the terms of the contract may arise if:

  1. Illegal actions.
  2. Party fault.
  3. Loss of one of the parties to the contract.
  4. An established causal relationship between the actions of the guilty party and the losses incurred by the other party.

As part of the contractual responsibility, it is worth noting:

  • joint and several, when the right to choose from which of several debtors for one debt to collect this debt belongs to the creditor;
  • subsidiary, which implies the right of the creditor to apply to the subsidiary debtor if it is impossible to collect the debt from the main debtor.

Liability (damages)

Ch. 25 of the Civil Code of the Russian Federation is devoted to liability for failure to fulfill obligations under the contract.

A universal measure of liability used in case of non-fulfillment of the terms of the contract is compensation by the guilty party for the losses incurred (Article 393 of the Civil Code of the Russian Federation).

The procedure for determining losses is regulated by Art. 15 of the Civil Code of the Russian Federation:

  1. The victim, entitled to claim damages, is the subject whose material right was violated.
  2. Losses are contingent costs incurred by one of the parties to a contractual relationship, with the help of which a violated right was restored or certain obligations were fulfilled. Losses should also include unreceived benefits, that is, such benefits that the party could have received in the normal performance of obligations, without violations.
  3. If the party that violated obligations receives a certain income, the party whose right was violated in this case receives the right to claim lost profits. In this case, the amount of this benefit may not be less than the amount of income received. The terms of the contract or the law may establish certain restrictions regarding the collection of lost profits.

Losses are a kind of maximum measure of responsibility for failure to comply with the terms of the contract under the Civil Code of the Russian Federation.

If, however, a material breach of the terms of the contract under the Civil Code of the Russian Federation entailed the need to sign a similar contract, then the party whose right was violated by such non-performance acquires the right to demand compensation from the debtor for the difference between the price under the original contract and the one concluded subsequently (Article 393.1 of the Civil Code of the Russian Federation, decision of the Plenum of the Supreme Court of the Russian Federation dated March 24, 2016 No. 7).

Other liability measures

In addition to the right to claim damages, if violation of the terms of the contract of the Civil Code of the Russian Federation provides for other measures of responsibility, in particular, such as:

  1. Penalty (Article 330 of the Civil Code of the Russian Federation) in other words, a fine (set in money) or a penalty fee (calculated as a percentage). It is subject to accrual if one of the parties violates the terms of the agreement reached. At the same time, by default, losses can be claimed only in the part not covered by the penalty (Article 394 of the Civil Code of the Russian Federation).

    But the contract may provide for payment:

    • only penalties;
    • losses over the amount of the penalty;
    • either forfeiture or damages.

    The presentation of a demand for payment of a penalty to the party that violated the terms of the contract should not be accompanied by proof of the fact of causing losses (clause 1, article 330 of the Civil Code of the Russian Federation).

  2. Responsibility for failure to fulfill a monetary obligation (Article 395 of the Civil Code of the Russian Federation). This article determines the procedure for payment and the amount of interest for late contractual payments. Its size is determined by the key rate of the Bank of Russia for settlement periods.

    If the injured party demands the recovery of the specified interest, but its losses are noticeably higher, it is also allowed to demand payment for losses, but only in the part not covered by interest under Art. 395 of the Civil Code of the Russian Federation.

In addition to the above, there are some other features of interest calculation:

  • it is not allowed to charge interest on interest;
  • it is not allowed to simultaneously charge a penalty in accordance with the terms of the contract and interest;
  • interest shall be calculated until the payment of the required amounts.

However, the agreement of the parties may provide for a shorter period.

Responsibility for non-fulfillment of the terms of the contract is provided for by the current Civil Code of the Russian Federation and is expressed in the form of a claim to the guilty party for damages, payment of a penalty (fines, penalties), as well as the calculation of interest in case of non-fulfillment of a monetary obligation.

If the injured party demands the recovery of the specified interest, but its losses are noticeably higher, it is also allowed to demand payment for losses, but only in the part not covered by interest under Art. 395 of the Civil Code of the Russian Federation. In addition to the above, there are some more features of interest calculation:

  • it is not allowed to charge interest on interest;
  • it is not allowed to simultaneously charge a penalty in accordance with the terms of the contract and interest;
  • interest shall be calculated until the payment of the required amounts.

However, the agreement of the parties may provide for a shorter period.

Failure to fulfill obligations under the contract in accordance with the Civil Code of the Russian Federation

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803 GC Russian Federation, for non-fulfillment or improper fulfillment by the freight forwarder of the obligations prescribed in the contract, he is liable to the client according to general rules established by Chapter 25 of the Civil Code of the Russian Federation.
That is, the general basis of liability is not the fault of the freight forwarder, but the usual business risk.
However, there are exceptions to this rule: if the freight forwarder manages to prove that the violation is caused by improper performance of the contract of carriage, then the amount and grounds for his liability will be determined by the rules provided for by the current legislation.

Info

What does this mean in practice? That liability for non-fulfilment of carriage obligations is always limited.


Attention

Of course, you will be able to recover direct damage caused by damage or loss of cargo, but that's not lost profit.

Consequences of breach of contract

This right lapses if the thing has already been transferred to a third party with the right of ownership, economic management or operational management.

If the thing has not yet been transferred, the creditor in whose favor the obligation arose earlier, and if this cannot be established, the one who filed the claim earlier, shall have priority.
In addition, instead of demanding to transfer to him a thing that is the subject of an obligation, the creditor has the right to demand compensation for losses.


Often, due to non-fulfillment of their obligations on the basis of concluded agreements (provision of services, performance of work, lease, supply, etc.)
e) the person has a debt to counterparties. And when the fulfillment of obligations on a voluntary basis does not occur, then you have to go to court.
If under the contract the debtor has a monetary obligation, then on the basis of Art.

Failure to fulfill obligations under the contract

  • subrogation (Article 965 of the Civil Code of the Russian Federation);
  • transfer of debt (art.
    391 of the Civil Code of the Russian Federation).

Fulfillment of obligations, consequences and liability in case of non-fulfillment Proper fulfillment of obligations should be understood as legal actions performed by the parties.
Proper performance of an obligation terminates it in all cases.
1 st. 408 of the Civil Code of the Russian Federation). By virtue of the provisions of Art. 311 of the Civil Code of the Russian Federation, the party has the right not to accept the performance of the obligation in parts.
Based on Art. 309.2 of the Civil Code of the Russian Federation, all costs associated with the proper performance of duties are borne by the debtor.

This provision is confirmed by the decision of the AS ZSO dated July 20, 2016 in case No. A27-9448 / 2015.

In case of violation of the terms of the contract

  • optional, that is, those in which the party can replace the main performance with another one (Article 308.2 of the Civil Code of the Russian Federation).

In order of importance:

  • basic;
  • additional, that is, those that ensure the fulfillment of the main obligation.

According to the subjects of fulfillment of obligations, they are usually divided into the following groups and subgroups:

  1. With multiple faces:
    • shares (art.
    • solidarity (Article 322 of the Civil Code of the Russian Federation);
    • subsidiary (art. 399 Civil Code of the Russian Federation).
  2. With the participation of third parties:
    • recourse, that is, those in which duties are shifted to another person (p.
      2 tbsp. 325
    • liability to a third party (art.
    • obligations performed by third parties (art.
  3. In which there is a change of faces:
    • cession (art.

Failure to comply with the terms of the contract

The company provides the following services:

  • protection of the interests of clients in any civil cases (family disputes, housing disputes, inheritance disputes, debt recovery);
  • development of a legal position for submission to the court;
  • collection of evidence and necessary documents confirming your position;
  • preparation for litigation, representing the interests of the client in court;
  • appeal against court decisions in the appellate, cassation, supervisory procedure;
  • assistance to the client in the execution of the court decision and the provision of legal assistance in cooperation with the executive authorities;
  • assistance in the conclusion of any civil contracts.

A contract in terms of law A contract is an agreement between two or more persons to establish, modify and terminate civil rights and responsibilities.

APC RF from September 1, 2016, non-compliance with the pre-trial procedure for resolving the dispute will be the basis for the return statement of claim arbitration court.

The provision on the mandatory pre-trial settlement of the dispute also applies to individuals, if such a condition is provided for by the contract or such an obligation is assigned to the parties by virtue of law, for example, if protection is necessary under the law on the protection of consumer rights.

As stated in paragraph 1 of Art. 393 of the Civil Code of the Russian Federation, the debtor is obliged to compensate the creditor for losses caused by non-performance or improper performance of an obligation.

According to Art. 15 of the Civil Code of the Russian Federation, a person whose right has been violated may demand full compensation for the losses caused to him, unless the law or the contract provides for compensation for losses in a smaller amount.

In accordance with par.

What to do in case of violation of the terms of the supply agreement?

It is used if the violator could not fulfill his obligations on his own and the injured party was forced to resort to the services of third parties, after which he has the right to demand compensation for these costs. Compensation does not release the violator from further fulfillment of the agreement, if the victim himself has not lost interest in it. AUTHOR OF THE ARTICLE: Yarova Nina Valerievna Year of birth: 1984 Country / City: Russia / Tula -consultantMarital status: marriedAbout me: I have experience in government and commercial structures. Currently I work from home: I write articles, I advise people on the phone. Working from home allowed me to finally start writing my Ph.D. thesis.

Failure to fulfill the terms of the contract

If we talk about legal entities as parties to the contract, then part 5 of article 4 of the APC of the Russian Federation today establishes a mandatory claim or other pre-trial procedure for resolving a dispute in relation to a certain category of disputes, for which such a procedure is provided for by federal law or an agreement.

No. 47-FZ establishes mandatory observance of the pre-trial procedure for resolving a dispute in most categories of cases.

Thus, before applying to the arbitration court, legal entities in most cases will need to follow the pre-trial procedure for resolving the dispute, regardless of whether it is provided for by the contract.

Otherwise, by virtue of paragraph 5 of part 1 of Art.

In case of violation of the terms of the contract

But the freight forwarder also has the opportunity to insure his risks associated with the implementation of forwarding activities.

The client is also responsible to the forwarder, the list of reasons for which, although limited, is fixed in the Law and cannot be changed by the contract.

Such grounds can be: Ø infliction of losses to the freight forwarder due to failure to fulfill obligations to provide information; for example, it is quite appropriate to demand full compensation for losses incurred by the freight forwarder due to the lack of information about the dangerous properties of the cargo; Ø unreasonable refusal to pay the costs incurred by the freight forwarder; in this case, a fine in the amount of 10% of these costs is paid; Ø untimely payment of remuneration to the forwarder and reimbursement of expenses incurred by him in the interests of the client.

In violation of the terms of the contract

Oral consultation 1000 rub. - 30 minutes. Leave a request The company "YurProfBuro" provides legal services to individuals and legal entities on issues related to the execution of the terms of the contract. The company's specialists will protect your interests in civil disputes, provide legal advice and legal assistance for any contractual issues.

Working with us, you will have at your disposal the best specialists who are always ready to provide legal support.

The law states that the freight forwarder is obliged to compensate for the losses caused to the client by violation of the term for fulfilling obligations, unless otherwise provided by the contract and the forwarder proves that the violation of the term occurred due to force majeure circumstances or through the fault of the client.

The law provides for the limitation of the forwarder's liability in the implementation of international transportation by him, if the forwarder proves that the loss, shortage or damage to the cargo was the result of force majeure, an accident, or that his negligence was light, and not gross. To simplify the procedure for compensation for losses caused to the client by the forwarder, you can use the forwarded cargo insurance mechanism. In this case, after the refund is paid to the customer Insurance Company by way of recourse, will sue the forwarder and take all legal troubles.

In the course of fulfillment by the parties of obligations under the contract, circumstances may arise that require amendments to the contract or its termination. The contract may be amended or terminated by agreement of the parties, unless otherwise provided by the Civil Code, other laws or the contract. To change or terminate the contract at the request of one of the parties, a court decision is required. Such a decision may be made:

  • in the event of a material breach of the contract by the other party;
  • in other cases provided for by the Civil Code, other laws or the contract.

Such violation of the contract by one of the parties is recognized as essential, which entails damage for the other party, which to a large extent deprives it of what it was entitled to count on when concluding the contract. One of the parties may refuse to perform the contract in whole or in part, if such refusal is permitted by law or by agreement of the parties. In this case, the contract shall be considered terminated or amended accordingly. The agreement to amend or terminate the contract is made in the same form as the contract, unless otherwise follows from the law, other legal acts, the contract or business customs. For example, if the contract was concluded in simple written form, then the party wishing to change or terminate the contract should send a written proposal to the other party to do so.

The party that received such a proposal is obliged to consider it and give an answer within the time period specified in the proposal or established by law or the agreement, and in its absence - within thirty days. Refusal to offer to amend or terminate the contract or failure to receive a response within the time limit gives the interested party the right to file a claim with the court. In this case, the plaintiff must provide evidence confirming that he has taken measures to resolve disputes with the defendant. Otherwise, the dispute on changing or terminating the contract is not considered by the court.

In the event of a change or termination of the contract, the obligations of the parties shall be respectively preserved in an amended form or terminated. They are considered modified or terminated from the moment the parties agree to change or terminate the contract or from the moment a court decision on this comes into force.

By entering into an agreement, the parties assume the obligations arising from it. These obligations must be properly implemented.

If one of the parties does not fulfill its obligations under the contract or performs them improperly, this will lead to losses for the other (injured) party. In this case, the injured party (creditor) may demand compensation from the party that violated the obligation (debtor) for the losses caused to it.

Under losses refers to the costs that a person whose right has been violated has made or will have to make to restore the violated right, the loss or damage to his property, as well as lost profits, i.e. lost income that this person would have received under normal conditions of civil circulation. When determining losses, they are guided by the rules established by the Civil Code of the Russian Federation, unless otherwise provided by law, other legal acts or an agreement.

In addition to compensation by the debtor for losses, the law or the contract may also provide for the payment of a penalty. It is not only a way to ensure the fulfillment of an obligation, but also a type of property liability.

forfeit - this is a sum of money determined by law or contract, which the debtor is obliged to pay to the obligee in the event of non-performance or improper performance of the obligation, in particular, in the event of delay in performance. It can be expressed in the form of a fine or a penalty. The penalty is determined either in a fixed amount of money for each breach of obligation, or as a certain percentage of the amount of the defaulted obligation and is collected once. The penalty is calculated as a percentage of the amount of the unfulfilled or improperly fulfilled obligation and is paid for each day of delay, i.e., it continuously grows.

When deciding on the ratio of losses and penalties, the Civil Code established general rule, according to which losses are compensated in the part not covered by the penalty. The law or the contract may provide for their other ratio. It should be noted that the payment of a penalty and compensation for damages do not relieve the debtor from the performance of the obligation in kind, unless otherwise provided by law or the contract. If the debtor has not fulfilled the contractual obligation at all, then compensation for damages and payment of a penalty release him from fulfilling the obligation in kind.

Special liability is established for non-fulfillment of a monetary obligation. For such violations of contractual obligations as the wrongful retention of other people's Money, evasion of their return, other delay in their payment or unjustified receipt or saving at the expense of another person, the obligation of the debtor to pay interest on the amount of these funds is established.

The amount of interest is determined at the location of the creditor by the existing discount rate bank interest on the date of fulfillment of the monetary obligation or its corresponding part. When recovering a debt in court, the court may apply the discount rate of bank interest on the day the claim is filed or on the day the decision is made. A different amount of interest may be established by law or an agreement.

If the amount of interest due to the creditor is lower than the losses caused to him, he has the right to demand compensation from the debtor for losses in excess of this amount. Interest for the use of other people's funds is charged on the day the amount of these funds is paid to the creditor, unless a shorter period is established for the calculation of interest by law or by agreement.

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