Civil Law #4 Zhanat Alimanov, assistant professor

Remark CONTRACT Rescission*Termination**Voidance*** art. 401art. 367 art. 159 Damages Restitution & discharge of obligations *расторжение; **прекращение; *** признание недействительным

Home assignment 13. Section 1 (General Provisions), Labor Code 14. Section 2 (Employment Relationships), Labor Code  Find out what are the differences between Civil & Labor Codes (with references to articles).

Terms 1. To rescind – расторгнуть 2. Rescission – расторжение 3. Material Breach – существенное нарушение 4. Unilateral Refusal – односторонний отказ

Step 1 (Formation of Contract) Is there an offer? (art ) Is there an acceptance? (art. 397) If not, is there a counteroffer? (art. 396) If yes, there is a CONTRACT

Step 2 (How to avoid contract obligations?) Restitution

PLAN VI. Excuses from Liabilities VII. Breach vs. Material Breach (Rescission)

VI. Excuses from Liabilities

Example 1 Andrei agreed to build a two storied (двухэтажный) pub for Boris for 10 mln. They made contract. When Andrei was digging foundation of the pub. He found underground waters which would 40 times increase cost of the construction, up to 400 mln. Andrei says that it is impossible to implement the contract.

Example 1 Is Andrei excused (освобождается) from his obligations?

Example 1 Is Andrei excused (освобождается) from his obligations? NO. Art. 359 (2) & 374

EXCUSE from Liability Art. 359 (2) & Impossibility Impossibility: must be real, not commercial

Example 2 Let’s assume that Andrei invested heavily in foundation as well as tried to divert the waters, but failed to provide sufficiently solid foundation. Given such foundation, Andrei managed to build only one storied (одноэтажный) pub. Besides, he was one month late. Boris sues for damages including lost profit.

Example 2 1. Was Andrei in breach of contract? 2. What are consequences of the breach? 3. Does Andrei have to pay damages?

Example 2 1. Was Andrei in breach of contract? Art What are consequences of the breach? Art Does Andrei have to pay damages? NO. Art. 359.

EXCUSE from Liablity (articles 359, 404) 2. NOT GUILTY Not Guilty: he did everything that he could to perform properly

VII. Breach vs. Material Breach

Example 3 Let’s assume that Boris considers this as material breach of contract. He would like to rescind the contract. A. What are the differences between 1. Material breach (Rescission); 2. Breach? B. What are the differences between consequences of: 1. Material breach (Rescission); 2. Breach?

Consequences (art. 401, 403, 354) BREACH Material Ordinary Rescission No Rescission NO OBLIGATIONS OBLIGATIONS

Example 3 Let’s assume that Boris considers this as material breach of contract. He would like to rescind the contract. What are the differences between consequences of: (1) Material breach (Rescission); Boris does NOT have to pay money under the contract & right to damages (2) Breach? Boris has to pay money, he has the right only to damages.

Step 1 (Formation of Contract) Is there an offer? (art ) Is there an acceptance? (art. 397) If not, is there a counteroffer? (art. 396) If yes, there is a CONTRACT

Step 2 (How to avoid contract obligations?) Restitution

Step 3 (Consequences for Non-Compliance) CONTRACT BREACH (нарушение, art, 359) Damages (убытки) MATERIAL BREACH (сущест. нарушение, art. 401) Damages (убытки) & Discharge of obligations (Rescission*) *расторжение => прекращение обязательств