What is a termination agreement

You have concluded an agreement, but now it is unprofitable or its terms are not relevant to you.

What to do?

How to change the terms of the contract to favorable ones; how to terminate a contract if cooperation is no longer financially interesting,” said Sergei Storozhenko, director of the expert group.

Read to the end and you will find out:

The contract is no longer profitable: how to change its terms
A peaceful way to terminate a contract
How to terminate a contract if the counterparty is “against”
Crisis and currency fluctuations as a reason to terminate a contract: does it count or not?
How much will it cost to unilaterally cancel the contract: is it possible not to pay?
Termination of a contract and raiding: how to protect a company from millions of losses

Do you want to change the terms of the contract, terminate an unfavorable agreement, but have no time to read? –

The contract is no longer profitable: how to change its terms

1.Agree

To change the terms of the contract (subject, contract price, deadlines for fulfilling obligations, payment procedure, etc.), you need to negotiate.

At the request of one party and without a trial, it is impossible to make changes to the contract (Article 310 of the Civil Code of the Russian Federation). It is necessary to come to an agreement with the counterparty (Article 450 of the Civil Code of the Russian Federation).

How to do it:

Organize negotiations, a face-to-face meeting, or send an official letter to the counterparty with a proposal to change the terms of the agreement
Draw up and execute an additional agreement to the contract

Important:

To achieve amendments to the contract on terms favorable to you, invite an experienced mediator who knows psychological negotiating techniques.
Follow the procedure for signing an additional agreement, in accordance with the rules on negotiations, acceptance and offer (Articles 434.1 - 443 of the Civil Code of the Russian Federation) and by analogy with the main agreement.

For example, if the main agreement is notarized or has passed the state procedure. registration, the agreement is also certified by a notary and registered with the authorized body.

2.Go to court if there are grounds

Changes can be made at the request of one of the parties to the contract only through the court and if there is at least one of the following grounds:

The counterparty violated its obligations (clause 2.1 of Article 450 of the Civil Code of the Russian Federation)

What is important for the court is the criterion of the materiality of the violation. In this case, not only and not so much the amount of damage/amount of losses is taken into account, but the discrepancy between the expectations of the injured party and reality (what the party should have received under the contract and what it received as a result).

In practice, it is proving materiality that is particularly difficult. (1).

(1) Resolution of the Far Eastern District Court of March 9, 2020 in case No. A73-10723/2015

The outcome of a legal dispute will depend on the competence of the lawyer representing your interests in court.

The right to change the terms of the contract is specified in the text of the contract/agreement, codes and laws (clause 2.2 of Article 450 of the Civil Code of the Russian Federation).

For example, if circumstances arise due to which the insurance risk has increased, the insurance company has the right to change the terms of the contract (Article 959 of the Civil Code of the Russian Federation). Or the pledgor did not warn the pledgee about the rights of third parties to the pledged item (clause 4 of article 336 of the Civil Code of the Russian Federation).

Circumstances have changed significantly (Article 451 of the Civil Code of the Russian Federation), and this could not be foreseen

For example, the legislation governing contractual relations has changed or “interruptions” in financing have begun.

Important: in practice this rule does not work. The courts do not recognize as significant changes in circumstances: neither the theft of an object transferred under a leasing agreement (2) , nor an unforeseen deterioration in the plaintiff’s financial situation (3).

(2) Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation dated March 16, 2010 in case No. A40-47834/08-155-376

(3) Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of November 30, 2010 in case No. A17-1960/2009

And in cases where the circumstances are nevertheless recognized as significant, the courts are more willing to terminate such contracts than to allow the terms to be changed at the request of one party.

Conclusion: it is almost impossible to change the terms of the contract if the counterparty is against it**.

**Such cases are rather the exception to the rule. Thus, in one of the cases, the court allowed the price of the contract to be reduced, since the equivalence of counter-provisions was violated (4).

(4) Resolution of the Presidium of the Supreme Arbitration Court of the Russian Federation of November 30, 2010 in case No. A17-1960/2009

Therefore, if the agreement is no longer profitable, or its terms were initially imposed by a stronger party (a larger company, government authority, market monopolist), invite a reputable negotiator and try to come to an agreement with the counterparty. Contact experts to draw up a new draft agreement or offer.

If the counterparty has signs of a monopoly, file a complaint with the antimonopoly authorities (clause 3, part 1, article 10 No. 135-FZ “On Protection of Competition”).

It is worth filing a lawsuit only when you are ready to terminate an unfavorable contract.

I want to make changes to the contract. Need expert help

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Court decisions

Failure to comply with deadlines by the developer
The deadline was reduced by 6 times: defense of the accused under Article 228.1 of the Criminal Code of the Russian Federation

Fraudulent attempt to recover part of the damage from the culprit of the accident

Online scammers: the case of a missing online store

Article - fraud: how to get rid of unfounded accusations?

Collection of a fine from a counterparty

A peaceful way to terminate a contract

If the contract has become unprofitable or has lost its relevance for you, it can be terminated by agreement in the same order in which it was concluded: an oral contract - orally, a written contract - in writing, concluded in electronic form - in electronic form, etc.

The procedure for termination by agreement is the same as when amending the contract: the parties agree at a personal meeting or in official correspondence to terminate the contract from a certain date.

When there are several parties to an agreement, it can be terminated by agreement of all or most of the participants. The text of the main agreement must describe the procedure for determining such a majority.

WHEN TERMINING THE AGREEMENT, MAKE SURE THAT THE PRINCIPLE OF EQUIVALENCE OF COUNTER PROVISIONS IS COMPLIED

CONSULT A SPECIALIST TO AVOID LOSSES, UNREASONABLE OR INVERTED PAYMENTS TO THE CONTRACTOR.

Conditions for termination agreement

The reason for bilateral termination is a change in circumstances that were significant for the concluded agreement. It could be:

increase in purchase prices or emergence of a new supplier (supply agreement);
increasing the working day (termination of the employment contract by agreement of the parties);
the borrower has a large amount of money (loan agreement).

When terminating gift agreements, the reason may be the inappropriate behavior of the donee, and in the case of terminating the annuity agreement - an objectively determined increase in the rental rate.

Important! You can issue an additional an agreement to terminate the contract in advance, specifying in it the conditions under which the contractual obligations of the parties will be considered fulfilled.

How to terminate a contract if the counterparty is “against”

Through the court*.

*Without the consent of the counterparty and without a trial, only unilateral refusal of the contract is allowed and only if such a possibility is specified in the law or contract (Article 310 of the Civil Code of the Russian Federation).

You can terminate the contract if the counterparty is “against”, in the following cases:

The counterparty violates the terms of the agreement (clause 2.1 of Article 450 of the Civil Code of the Russian Federation)
Circumstances have changed significantly (Article 451 of the Civil Code of the Russian Federation)
A situation has arisen provided for by law or agreement (clause 2.2 of Article 450 of the Civil Code of the Russian Federation).

These are all the same situations as in the case when it is necessary to change the terms of the contract to more favorable ones.

Important: follow the mandatory claim procedure. Before filing a claim, send the counterparty a written proposal to terminate the contract, wait for a reasoned response, or wait for the period during which the response must be received. If this is not done, the claim will be left without consideration (222 Code of Civil Procedure of the Russian Federation, Article 148 of the Code of Arbitration Procedure of the Russian Federation).

WHEN TERMINING THE AGREEMENT, DO NOT PAY EXCESSIVELY. IF THE CONTRACTOR IS MORE STRONG OR HAS CONNECTIONS IN AUTHORITY CIRCLES, CONTACT THE SPECIALISTS.

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What does it mean to cancel a contract?

Cancellation is possible if the person does not go to work on the day established by the agreement. Since 2007, the employer has been given more rights. Previously, cancellation was carried out only under these circumstances:

The employee was absent from work for a week.
There are no valid reasons for absence.

Now you don't have to wait a week to cancel. Moreover, even if the employee provides valid reasons for absence, the employer may also terminate the agreement. However, this is the right, not the responsibility of the leader. If desired, he can maintain the validity of the agreement.

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FOR YOUR INFORMATION! Cancellation is used at the very beginning of an employee's employment. For example, an agreement has been concluded with an applicant for a position. The document indicates the exact date when the person must return to work.

If he does not report for duty, the agreement is terminated. That is, cancellation involves the termination of a document that has not actually entered into force.

If an already working employee quits, the termination of the employment relationship will be carried out according to a different scheme.

Order of conduct

Cancellation must be carried out in full accordance with the specified algorithm. Otherwise, problems may arise. For example, an employee did not show up for work on the first day. A manager who does not know the law well simply breaks the employment contract. However, the employee has a second copy of the document.

If the employer does not allow him to work, citing a breakdown in relations, the specialist may well go to court. The cancellation was not carried out legally, the employee’s absence from the company during working hours was not recorded, and therefore filing a complaint is a completely justified measure. Essentially, in the circumstances under consideration, the specialist will continue to be registered with the company.

The cancellation algorithm will be as follows:

The procedure, the consequence of which is the termination of the contract, can only be started if the employee is not present on the first working day.
The employer issues a cancellation order.
The corresponding mark is made in the agreement. For example, you can make something like this.
If the manager has already issued an order to hire an employee, this document must also be canceled. An order is issued for this purpose. An alternative option is to put a corresponding mark on the document and certify it with the signature of a representative of the HR department.
If an entry for employment has already been made in the specialist’s work book, it is canceled by placing a mark of termination.

We invite you to read: Postings under an agency agreement in 2020

FOR YOUR INFORMATION! The book must be returned to the employee.

Cancellation (Termination) of a notarial agreement

All of the above applies to notarial real estate contracts. A notarial agreement is the same agreement, but completed in the presence of a notary and certified by a notary.

The difference between the termination of a notarial contract and a simple written form is in the design. According to the rules of the Civil Code of the Russian Federation, changes to the contract are made in the same form as the contract itself.

Therefore, termination of the contract must also be formalized in notarial form.

According to the rules set out above, it is not possible to terminate an already executed notarial real estate contract.

As of 06 June 2020

Moscow

Lawyer Gordon A.E.

All of the above applies to notarial real estate transactions. A notarial transaction is the same agreement, but completed in the presence of a notary and certified by a notary.

The difference between the termination of a notarial transaction and a simple written form is in the design. According to the rules of the Civil Code of the Russian Federation, changes to the contract are made in the same form as the contract itself.

Therefore, termination of the contract must be formalized in the same way as the contract was concluded - in notarial form.

According to the rules set out above, it is not possible to terminate an already executed notarial real estate transaction.

Moscow

Features of drawing up an order

The first and most important thing in this procedure is that cancellation is not dismissal. An employee who does not show up for work cannot be fired for absenteeism - this is confirmed by current legislation and judicial practice.

Another important point follows from this: cancellation of an employment contract on the initiative of an employee is possible in the same way as on the initiative of the employer - the employee himself can change his mind about going to work, inform his manager about this and ask to cancel his employment contract.

In fact, in this case, the company will have no reason to refuse the employee.

However, there is no official procedure for declaring a contract annulled.

In practice, companies are guided by the following procedure:

First of all, it is necessary to record the fact of non-appearance. As a rule, the fact is recorded by drawing up a corresponding act. The act only records a fait accompli. The employer does not have to find out the reasons for absenteeism (including from the employee himself) - such an obligation is not provided for in Art. 61 of the Labor Code of the Russian Federation. Please note that cancellation of an employment contract is allowed only on the very first working day. If an employee goes to work on the first day, but does not return, for example, on the second, it will no longer be possible to cancel the contract.2. Confirmation of the fact of cancellation of the employment contract. In practice, the fact is confirmed by issuing the relevant order.3. If an order was issued to hire an employee, an order to cancel it will also be required.
4. If you haven’t had time to make an entry in your work book (by law, the company has five days from the date of hire to do this), you don’t need to make any entries. The procedure for action in a situation where an entry has been made is not regulated by law.
In practice, one of two methods is used: either an entry is made about the cancellation of the employment contract, or the employment entry is declared invalid (indicating that the original order for employment has been canceled and the details of the new order for the cancellation of the employment contract).

We suggest you read: Complaint about the quality of the Pyaterochka package

To cancel an employment contract, you can act in these two directions:

Issuance of the corresponding order.
The relevant order is given orally to the HR department.

To prevent problems in the future, it is recommended to act formally, that is, all orders must be given in writing.

Let's consider the full algorithm of actions in case of employee no-show:

The specialist’s immediate supervisor sends a memo to his boss regarding absenteeism. An act confirming the fact of absence must be attached to this document.
The boss reviews the note and puts a resolution on it.
The note is sent to the HR department.

IMPORTANT! An order to terminate the validity of a document is drawn up in free form. However, in this document it is necessary to indicate the paper that is being cancelled.

There are no strict requirements for completing an order. However, it is recommended to comply with some formalities.

In particular, if a person nevertheless comes to the workplace, he should be familiarized with the contents of the order against signature.

If a person never shows up at the enterprise, it makes sense to send the document by registered mail with notification and inventory. The notification is necessary so that the employer can confirm that the paper was sent.

The law states that the agreement can only be canceled if the employee was absent on his first day of work. A full shift is expected. That is, if a specialist comes to the company at 3 pm instead of 10 am, the contract cannot be terminated. Therefore, it is not recommended to cancel the agreement on the first day of the specialist’s absence.

IMPORTANT! What should an employer do if an employee shows up very late on the first day of work{q} He can either impose a disciplinary sanction or fire the employee if he is absent from work for more than 4 hours.

Can a contract be canceled at the initiative of an employee{q}

On the first day of work, a specialist may realize that the job is completely unsuitable for him. Is it possible to terminate the contract in this case? Yes. This is done in accordance with the following order:

The specialist draws up a statement requesting cancellation of the agreement. It is sent to the employer.
The employee and employer enter into an agreement to terminate the employment contract.
The agreement must state that both parties to the labor relationship have no claims against each other.
The manager issues an appropriate order.
A cancellation mark is placed on the employment contract.

The application is drawn up in free form. However, wording that can be interpreted in two ways should not be allowed in the document.

Arbitrage practice

Despite the rights granted to the employer, in litigation the courts side with the worker. The manager needs to remember that any ambiguous positions will be interpreted in favor of the employee. In court, the employer may be asked for these documents:

An employment contract with signatures of both parties.
Report of employee's absence from work.
Cancellation order.
Memo about absence from the manager to the boss.
Notification of sending a registered letter if the employee cannot be familiarized with the order in person.
Entry of cancellation in the employee’s work book.

https://www..com/watch{q}v=https:accounts.google.comServiceLogin

To prove the case in court, the employer must comply with all formalities. You must have all the necessary documents, even if they are not required by law.

Source: https://medwedsk.ru/znachit-annulirovat-dogovor/

Crisis and currency fluctuations as a reason to terminate a contract: does it count or not?

During the crisis times of the late 90s and early 2000s, there were court decisions recognizing inflation, devaluation of the ruble and the general crisis as proper grounds for unilateral termination of the contract (5).

However, today the courts do not recognize material problems, the general crisis and currency fluctuations as a significant change in circumstances, refusing applicants (6, 7).

Courts are more willing to accept circumstances of a non-financial nature - for example, the seizure of leased property (8), the establishment of a special regime of use on leased land (9) and even personal circumstances - for example, the serious illness of the plaintiff’s child (10).

If you are experiencing financial difficulties and cannot continue to fulfill the terms of the contract, contact experienced specialists. The courts side with the plaintiff in exceptional cases. And if your interests are represented by a poorly trained lawyer, there is no chance of winning the case and breaking the unfavorable contract.

(5) Resolution of the Federal Antimonopoly Service of the Moscow District dated November 3, 1999 in case No. A40-3222/99-45-47

(6) Ruling of the Supreme Court of the Russian Federation of June 23, 2020 in case No. A27-13141/2014

(7) Resolution of the Arbitration Court of the Ural District dated January 25, 2020 in case No. A76-273/2015

(8) Ruling of the Supreme Court of the Russian Federation dated June 8, 2020 in case No. A32-30786/2013

(9) Ruling of the Supreme Court of the Russian Federation dated November 2, 2020 in case No. A32-28623/2014

(10) Resolution of the Moscow District Court of March 4, 2020 in case No. A40-28345/14

How much will it cost to unilaterally cancel the contract: is it possible not to pay?

Refusal from a contract most often gives rise to the need to pay the counterparty some amount of money (clause 4 of the Resolution of the Plenum of the Supreme Arbitration Court of the Russian Federation No. 16). This could be interest, advance deduction, share of the contract price, etc. Specific conditions are specified in the contract.

Important:

IF YOU THINK THAT THE CONTRACTOR IS DEMANDING TOO MUCH FROM YOU, CHALLENGE THIS AMOUNT IN COURT. COMPENSATION SHOULD NOT BE EXCESSIVE

PROVE THAT THE REQUIRED PAYMENT VIOLATES THE REASONABLE BALANCE OF INTERESTS OF THE PARTIES TO THE CONTRACT.

Thus, in one of the cases, the court declared void the condition of compensation in the amount of 3 monthly payments(11).

If the counterparty demands to pay a penalty, consult a lawyer whether such a demand is legal. Although the parties are free to choose the type/amount of compensation for unilateral refusal of the contract and can provide for a penalty (12) , in this case it will serve as compensation.

And if the right to withdraw from the contract is provided for by the contract or the law, then this is a legal action, therefore the collection of a penalty is inappropriate here (13).

(11) Resolution of the AS SZO dated May 27, 2020 in case No. A56-66142/2015

(12) Resolution of the Volga-Vyatka District Arbitration Court dated April 5, 2016 in case No. F01-618/2016

(13) Resolution of the Volga District Arbitration Court dated June 2, 2020 in case No. F06-23363/2015

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