• A
  • A
  • A
  • ABC
  • ABC
  • ABC
  • А
  • А
  • А
  • А
  • А
Regular version of the site

Information letter of the Presidium of the Supreme Commercial Court of 25 February 2014 № 165 “A Survey of Judicial Practice on Disputes Connected with Deeming Contracts to be Not Concluded”

The Presidium gave a number of important interpretations of the rules of contract law. The most important seem to be the following points: 
 
- the contract, which turns to be not concluded as a result of the failure to agree on its essential terms, may not be regarded as null and void, because it not merely fails to give rise to consequences it was aiming at, but it is also non-existent as a matter of fact due to the parties’ failure to come to an agreement and, consequently, it may not give rise to whatever consequences in the future as well (para 1); 
 
- a party to contract of lease which has not been properly registered may not on this ground refer to its being not concluded. Such contract merely fails to give rise to those consequences which may affect the rights and interests of third persons who did not know about the fact of conclusion of the contract of lease and the contents of its terms. Another interpretation would encourage an unscrupulous behavior of parties to contract which has not been properly registered, but still is being performed by them (para 3);
 
- it the starting moment of the period of performance of works by the contractor is defined by way of indicating certain actions of the principal or other persons (for instance, the remittance of advance payments to the contractor), the period of performance of works in such a case shall be deemed to be duly agreed upon. Such interpretation enables to overcome the formal attitude of courts which in such circumstances tended to deem the contract to be not concluded on the ground that under Art 190 of the Civil Code a time period may not depend on the event which should not necessarily occur (para 6); 
 
- whenever there is a dispute on the contract being concluded, the court must assess the circumstances of the case in their entirety in favour of preservation, not nullification, of obligations, and also proceeding from the presumption of good faith on the part of participants of civil legal relations (Art 10, Civil Code). If parties have failed to agree on a certain term of contract regarded as an essential one, but subsequently by way of mutual performance of contracts and the acceptance such performance have removed the necessity to agree on such term, the contract should be regarded as a concluded one. For example, the handing-over of the result of works by a person who performed them in the absence of a contract of independent work, and its acceptance by the person, for whom those works have been performed, means the conclusion of the agreement by the parties. This interpretation does not extend, however, to the cases of performance of works for State needs, because the recovery of unjust enrichment for the works which have been performed in reality, but in the absence of State contract, would open for unscrupulous contractors and State organisations an opportunity to gain illegal benefits in circumvention of the legislation on public procurement (para 7); 
 
- an agreement on jurisdiction or an arbitration agreement, concluded in the form of a stipulation in a contract, should as a general rule be regarded independently from other conditions of the contract, and therefore the fact that the contract, which contains the stipulation was deemed to be not concluded, does not by itself means that the agreement on jurisdiction or arbitration agreement were not concluded as well (para 12). 
Document  (1.15Kb)


 

Have you spotted a typo?
Highlight it, click Ctrl+Enter and send us a message. Thank you for your help!
To be used only for spelling or punctuation mistakes.