SURVEY LETTER OF THE SUPREME ECONOMIC COURT OF UKRAINE

of February 18, 2013 No. 01-06/374/2013

About practice of resolution of disputes, connected with agreement performance of the contract (on materials of the cases considered in cassation procedure by the Supreme Economic Court of Ukraine)

According to the procedure of information and for accounting in hearing of cases the overview of the disputes solved by economic courts on which judgments are reviewed in cassation procedure by the Supreme Economic Court of Ukraine goes.

1. The works agreement can be signed by the simplified method by signing of acts of delivery acceptance of the performed works.

The customer addressed the contractor with the action of debt. Claims are proved by violation by the contractor of agreement obligations of the contract, concluded by the simplified method by signing of acts of delivery acceptance of the performed works.

Leaving without changes of the decision of economic courts of the first and appeal instances which satisfy claims, the Supreme Economic Court of Ukraine noted it.

According to part one of article 181 of the Economic code of Ukraine (further - HK of Ukraine) the economic agreement by the general rule is stated in the form of the single document signed by the parties and fastened with seals. The conclusion of economic agreements by the simplified method, that is by exchange of letters, faxes, telegrams, telephone messages, etc., and also by confirmation of acceptance is allowed to accomplishment of orders if the law does not establish special requirements to form and procedure for the conclusion of this agreement type.

Thus, signing of acts of delivery acceptance of the performed works testifies to the conclusion of the works agreement by the simplified method, and this agreement is the basis for origin at its parties of imushchestvennokhozyaystvenny obligations (see the resolution of the Supreme Economic Court of Ukraine of 11.05.2012 No. 21/5005/14068/2011).

2. It is withdrawn according to the Letter of the Supreme Economic Court of Ukraine of 12.03.2013 No. 01-06/473/2013

3. The works agreement stops, and the bases for its termination judicially are absent if the customer refused it according to Article 849 of Civil Code of Ukraine.

The customer appealed to local economic court with the claim to the contractor with the requirement to break off the works agreement signed between them.

Claims are motivated with what the contractor did not perform part of the works provided by the agreement at the scheduled time.

The contractor did not recognize the declared requirements, referring to the fact that the customer did not fulfill the duties provided by the agreement concerning introduction of the previous payment and document transfer (the approved project and working documentation on performance of works) in this connection it was impossible to perform works in time.

Satisfying claims, the local economic court recognized that failure to carry out by the contractor of the works provided by the works agreement is at the scheduled time the basis for its termination according to part two of Article 651 of Civil Code of Ukraine.

Canceling the decision of local economic court and refusing satisfaction of the claim, the Economic Court of Appeal came to conclusion that the contractor could not perform work in time because the customer did not fulfill the duties concerning introduction of advance payment and document transfer.

Economic courts also came to conclusion that the works agreement can be broken off only judicially in connection with fundamental breach of the agreement (Article 651 of Civil Code of Ukraine) or essential change of circumstances (part two of Article 652 of Civil Code of Ukraine).

The Supreme Economic Court of Ukraine cancelled judgments of the previous instances, stopped proceeedings, having noted it.

According to part four of Article 849 of Civil Code of Ukraine the customer has the right before completion of work at any time to refuse the works agreement, having paid to the contractor payment for the executed part of work and having paid it the loss caused by agreement cancelation.

Thus, by the law the customer is granted the right to refuse unilaterally the agreement at any time before completion of work, and the right established by this regulation cannot be limited.

The part three of Article 651 of Civil Code of Ukraine provides that in case of unilateral refusal of the agreement in full or partially if the right to such refusal is established by the agreement or the law, the agreement is according to broken off or changed.

According to part two of Article 653 of Civil Code of Ukraine in case of agreement cancelation of the obligation of the parties stop.

As the customer based on Article 849 of Civil Code of Ukraine refused the agreement, having sent to the contractor the letter requirement on agreement cancelation of the contract, and such unilateral refusal from the agreement does not need coordination with the contractor, the agreement is stopped, and the matter in issue on this case is absent (see the resolution of the Supreme Economic Court of Ukraine of 23.05.2012 No. 5010/1495/2011-18/65).

4. The claim which contains request to consider it and to break off the agreement, is the offer to break off the agreement according to the procedure, stipulated in Article 188 XK Ukraine, but not refusal of it by rules, the stipulated in Clause 849 Civil Code of Ukraine.

The customer appealed to local economic court with the claim to the contractor with the requirement to collect from the last based on Article 1212 of Civil Code of Ukraine the amount of the brought advance payment.

Claims are proved by partial failure to carry out by the contractor of works on the agreement.

By the decision of local economic court left without changes by the resolution of Economic Court of Appeal it is refused satisfaction of the claim on the absence bases at the customer of the right to refuse the works agreement according to Article 849 of Civil Code of Ukraine taking into account the termination of term of performance of works. Besides, economic courts noted about lack of the bases for return of paid amount of advance payment based on Article 1212 of Civil Code of Ukraine, considering availability of the current agreement of the contract.

The Supreme Economic Court of Ukraine, leaving the decision of economic courts of the previous instances without changes, noted it.

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