Notice of breach of contract

Failure to comply with the terms of the contract is a headache for a businessman, and just any citizen. Every beginner (and not just beginners) entrepreneur has a question: “Does the other party to the contract want to outsmart me?”

In this case, it would be best to contact our contract lawyer, who can quickly give you the full breakdown of your contract. He will help you weigh all the pros and cons of concluding an agreement and guide you on the truly right path.

Procedure in case of non-fulfillment of the contract

In the event of a conflict between the parties, you need to be prepared and know the algorithm of actions, because immediately going to court would be a mistake for any party to the dispute. So, remember, your actions if the other party does not fulfill its obligations under the contract:

1. The mediation procedure is to peacefully resolve the conflict between individuals. You need to try to call and write to the other party an offer that you think will suit both parties. If you already had clauses regarding the settlement of the conflict before the trial, then it is worth following the procedure, namely, you need to send the other party a letter with the requirements set out in it to comply with the agreed obligations.
2. Claim – this document is sent in the case when the other party avoids meetings and calls and does not communicate at all. In the claim it is necessary to note: details of the organization of the claimant and the debtor, a reference to the agreement concluded between the companies, an indication of penalties under the agreement (after all, the very purpose of the claim is to scare the unscrupulous party), the date and signature of the person authorized to submit this document. This document will also be necessary for the court; it will confirm that you tried to peacefully resolve the conflict. In addition to the claim, it is necessary to prove that it was sent to the address of the second party. Such evidence will be a postal receipt.
3. Filing a claim in court . If the response to the claim is not satisfactory, then you will need the help of a professional lawyer who will draw up a civil claim indicating the disputed subject. By the way, he can also provide a sample statement of claim to the court about non-compliance with the terms of the contract. Collect the entire set of documents, which will include: statement of claim; claim with postal receipt; state duty; evidence of contractual relations with the other party. To draw up a claim, you will definitely need a competent lawyer, if you do not want to blush in front of the judge for a claim downloaded from the Internet.

As a result of consideration of the case, the essence of which is failure to fulfill obligations in civil law, a court decision will be made. And if you do everything correctly, the decision will be in your favor.

General rules for filing a claim

Legislation does not establish a mandatory claim form. Participants in the transaction should proceed from the specifics of drawing up the document based on established practice. When filing a claim, please adhere to the following procedure:

1. Before filing a claim for non-compliance with the terms of the contract, check the availability of original documents on which you want to base the claims: contracts, work completion certificates, invoices, etc.
2. In your complaint, briefly state the essence of your demand, which points of the agreement and the law were violated, and your demands to the other party: reimbursement of money or fulfillment of obligations.
3. Determine a deadline, failure to comply with which will require legal action.
4. Send your claim by letter with registered notification, making a preliminary inventory of the attachment. Documents are sent to the legal address.

The style of presenting a claim must correspond to a formal business style. Excessive quoting of clauses of an agreement or articles of law should be avoided; it is sufficient to provide a reference. A claim sent to the counterparty for violation of the terms of the contract may include the following parts:

• introductory - determines who the document is addressed to, who it comes from, date and number;
• descriptive - it is indicated from what the requirement (contract, agreement) follows, what obligations have been accepted, what has not been fulfilled, the amount of damages caused;
• motivation - the complaint lists the violated clauses of the contract and articles of regulations;
• final - the requirements are set out, possible options for resolving the dispute, a deadline is set for responding to the complaint (if it is not established by the agreement), a signature and decryption are placed.

Let's apply these rules and file a claim.

How to avoid non-fulfillment of the contract?

Each contract is an agreement between a certain number of people to establish civil obligations and rights, subject to special clauses where liability for failure to fulfill the contract is discussed. The signing of any such document implies the consent of each of the parties, which may be individuals or legal entities. Often these clauses in the contract play a huge role when disputes arise in court. Typically these clauses include:

1. Amount of penalty for failure to fulfill obligations under the contract;
2. Interest on late payments;
3. Choice of court.

ATTENTION : from time to time the parties forget to comply with such clauses, and this entails non-fulfillment or improper performance of the contract.

Basically, this situation happens between legal entities and individuals. In cases where an agreement is concluded with the municipality, there are also differences in the opinions of the parties and mainly disputes arise regarding the social tenancy agreement for residential premises. It is important to consider that:

• the contract must provide for the existence of certain conditions , which are perhaps the main component of your agreement, and the absence of which makes it invalid.
• In addition to the subject of the transaction itself, the important points for most of all contracts are the cost and volumes with deadlines .
• It is also necessary to narrow the circle of parties included in the contract and provide for how the rights of third parties in your contract may be affected, because challenging the contract by a third party is far from uncommon in our time.

How should demands be made?

It is very important to avoid mistakes during pre-trial proceedings. A claim under a service agreement must be sent to the supplier or counterparty in person or by mail. Be sure to send a letter with a list of attachments; it is better to send it by a valuable letter with acknowledgment of delivery. Postal receipts must be preserved, as they will serve as proof that the document was sent in compliance with civil law.

If you need advice or specialist help, contact the lawyers of our center!

Reasons for non-fulfillment of the contract

Individuals and companies enter into various types of contracts with each other, and from the moment of their conclusion, they face various obligations that they must fulfill in fulfillment of the contract. Situations arise when the parties do not fulfill their obligations under the contract for various reasons, they can be either respectful or not.

Valid reasons for failure to fulfill obligations under the contract are:

1. Natural disasters (hurricane, storm, tsunami, etc.), martial law, changes in legislation and other emergency situations due to which the fulfillment of obligations under the contract is impossible. State bodies should also be aware of such circumstances, therefore the law provides for notifications from certain government agencies to be sent to the other party to the contract. The procedure for sending a notice may be specified in the contract itself.
2. Death or serious illness (for example, a dislocated leg or arm, long-term illness) of one of the parties to the contract, due to which the performance of the contract is not possible. In this case, the party can provide a certificate from a medical institution or from another organization where treatment is carried out, or other other document confirming the party’s condition.
3. Property and other things are under arrest, bail or under criminal investigation. If one of the parties finds out about this, then it may demand termination of the contract and, for example, not transfer funds under the contract for a certain item, depending on what contract is concluded between the parties.

Not valid reasons for failure to fulfill obligations under the contract are:

1. Change of initials of an individual (for example, change of surname) or reorganization of an enterprise or renaming of an organization. The obligations under the contract must still be fulfilled, you can simply attach the relevant documents and notices of what is in progress to the contract, but the contract must be executed properly.
2. Lack of funds . During the period of execution of the contract, a party may not fulfill its monetary obligations under the contract, citing its difficult financial situation, however, this does not relieve him of responsibility, since the contract has already been concluded, all conditions have been discussed, so funds must be transferred or transferred. In such a situation, even when considering the contract, you need to make sure of the financial situation of the party in order to avoid such risks.
3. Lack of property and other things or things are in the possession of third parties . In practice, situations arise when a person does not transfer any property or thing on time to the other party in fulfillment of the contract (for example, a person can say that this thing is still with a third party, will be a little later, or he has extended the period of possession of this thing), this is not for a valid reason, the person must fulfill his duties.

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Grounds for non-fulfillment of the contract

The grounds for non-fulfillment of the contract may be the above reasons or other circumstances. Depending on who the contract is concluded with (an individual or an organization) and what it is concluded for, various circumstances may arise. During the execution of the contract, the parties may identify any shortcomings in the contract itself or in the position of the person (organization). Disagreements may arise between the parties regarding the points of the agreement, as a result of which one of the parties may demand its termination. The parties can also find out the circumstances that became known after the conclusion of the agreement, for example (criminal prosecution, or a sentence was passed against the person, which is important for the execution of the agreement, or the organization ceased its activities, about which a note was made in the Unified State Register of Legal Entities, etc.).

There may be several reasons depending on the situation, but you cannot simply accept and not fulfill obligations under the contract; there must be compelling reasons for this. The grounds for non-compliance must all be confirmed, both valid and not valid. In the course of non-fulfillment of the contract, situations may arise when assistance is required in court and you will have to confirm the grounds and reasons for non-fulfillment of the contract in order to successfully win.

What can you demand?

The requirements of the parties are always based on the law and the terms of the transaction. Depending on what is specified in the agreement, the scope of the requirements changes. If the terms of the transaction do not provide for liability for violation of obligations, general rules will apply:

1. Article 395 of the Civil Code of the Russian Federation - collection of interest for the use of other people's funds. For example, by accepting goods under a supply agreement and refusing to pay, the buyer initiates unjust enrichment on its part.
2. Clause 5 of Article 6 of the Federal Law of June 30, 2003 No. 87-FZ - in case of violation of the agreement on transport and forwarding activities by the party that violated the terms of the transaction, you have the right to demand 10% of the costs incurred.
3. Clause 6 of Article 13 of the Law of the Russian Federation dated 02/07/1992 No. 2300-1 - gives the consumer the right to receive from the seller a fine in the amount of 50% of the amount awarded by the court, but not initially paid voluntarily.

If the transaction is made with a counterparty whose reputation is unknown, provide for more stringent requirements for non-compliance with obligations. In addition to legislative norms, the parties have the right to independently determine the amount of liability for violation of the terms of the transaction:

• a fine in a fixed amount or in the form of a percentage of the amount of the unfulfilled obligation, for example, under a supply contract, the parties have the right to indicate the amount of the fine for late delivery or payment for services. The wording will be as follows: “In case of failure to comply with the terms of delivery or payment for services, the party that violated the obligations shall pay the other party a fine in the amount of 0.1% of the amount of the unfulfilled claim for each day of delay”;
• acquisition and transfer of goods that were consumed without achieving the required result, for example, under an agreement for the provision of services, a party acquires and transfers building materials, because as a result of non-compliance with construction technology, the work was not completed.

If the terms provide for a different amount of the fine, then the claim for failure to fulfill the terms of the contract should not contain a requirement for payment of unjust enrichment under Art. 395 of the Civil Code of the Russian Federation. A direct prohibition is provided for in paragraph 4 of the above article. We recommend that you determine in advance what amount will most fully compensate for the losses caused.

What are the consequences of non-fulfillment of contracts?

In case of failure to fulfill the obligations stipulated by the contract, a person may be subject to various responsibilities that he must bear. Responsibility may be provided in the following form:

• Penalty for failure to fulfill the contract . When concluding an agreement, it may provide for a penalty clause in case of failure to fulfill one’s obligations, even if the clause is absent, then the legislation itself provides for the collection of a penalty from the party, for example, who did not pay for the goods received on time.
• Losses . If the obligations under the contract were not fulfilled or performed improperly, then the party may demand from the other party compensation for losses that it incurred in connection with the failure to fulfill the contract. Losses are compensated in the form of the difference for similar work, services, goods.
• Termination of the contract in case of failure to fulfill obligations . In case of failure to fulfill obligations under the contract, a party may terminate the contract, either by agreement of the parties or unilaterally. When terminating a contract, a party must have grounds for non-fulfillment of the contract so that it can refer to them in case the other party makes demands.
• Losses . One of the parties may suffer various losses, for example, property losses, due to the other party’s failure to fulfill the contract. An agreement on compensation for losses is usually concluded between parties who are engaged in business activities. The party must compensate for losses.
• Other responsibility . Other liability may also be criminal, for example, when a person, by virtue of fulfilling obligations under a contract, palmed the other party with forged documents (for example, a payment order or payment receipt) or stolen property, then a criminal case for fraud can be opened.
• Failure to fulfill obligations under the contract can lead to various consequences, for example, the other party going to court, so it is better to fulfill your obligations properly, and if problems arise, try to negotiate among yourself and come to an agreement.

Notice of termination of the lease agreement from the tenant

• if the document does not specify an expiration date. The Civil Code states that termination of open-ended contracts is possible only after notification. Notification of the desire to move out or vacate the premises ahead of schedule is required 3 months before the desired date;
• if the document specifies the conditions according to which it is renewed automatically without the participation of the parties;
• if one of the parties refuses to perform the actions established by the contract.

1. The name of the document is always written first, that is, “notification.” The next line is a clarification, for example, about a unilateral refusal to renew the lease agreement.
2. The introductory part (top right) contains the identification data of each party participating in the transaction. You must fill in the full name of the organization, INN, KPP, bank account number and details of the financial company, legal and actual address, and work telephone number.
3. When registering the details of the other party, it is necessary to register an address to the person who represents the organization or individual entrepreneur, for example, the “Manager”. Next, enter your full name without abbreviations and the name of the company.
4. The body of the document contains the details of the lease agreement that needs to be terminated. Information about the document number, name, time and place of execution and the parties who executed the paper is required.
5. Below is a clause in the lease agreement that gives the parties the right to terminate it ahead of time. In accordance with the clause, the reasons are prescribed, for example, violation of the obligations of one of the parties.
6. At the end of the document, the date of the desired termination of the legal relationship is indicated. The day must follow the date on which the person receives the notification.
7. At the bottom of the document, the applicant puts the date of writing and number.
8. The notification is certified by the seal and signature of the manager with a transcript. His full position is written at the end.

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Act of non-fulfillment of the contract

The legislation provides that when concluding certain types of contracts (for example, for the provision of services, a contract), an act is drawn up between the parties on the work performed. The act can also be drawn up in case of non-fulfillment of the terms of the contract or poor performance. The act is an annex to the contract, which indicates the grounds or reasons for non-fulfillment of the contract (the act may contain a reference to the clause of the contract on the basis of which there were reasons for non-fulfillment).

The act must reflect the following:

• Indicate the parties to the agreement (the preamble can be the same as in the agreement).
• State the reason or basis for non-fulfillment of the contract. The parties can indicate valid and disrespectful reasons. You can refer to clauses of the contract, legislation or other reasons.
• The documents attached to the act will be of no small importance, because if the grounds are valid, this will help to avoid future risks (liability).
• The party can indicate what liability the party that fails to fulfill the terms of the contract will bear, for example, it will have to compensate for losses or penalties.

Types of violations of contract terms

Contracts as a way to act on agreed upon agreements are concluded between customers and performers, sellers and buyers, commercial and government agencies. Failure of one of the parties to fulfill its contractual obligations gives rise to numerous conflict situations.

A violation of contractual obligations can be considered:

• failure to deliver goods or perform work/services on time;
• fulfillment of obligations not in full;
• changes in the assortment or configuration of supplies;
• performance of work, provision of services or supply of goods of inadequate quality;
• refusal to fulfill the terms of the agreement for reasons not provided for in the agreement.

Failure to comply with the points specified in the contract document is the basis for issuing a written petition with a list of requirements to the violating party.

Liability insurance for non-fulfillment of the contract

During the period of close relationship between individuals and organizations, it is necessary to use and provide various services and works. The relationship between the parties is secured by various agreements in order to receive quality services, that is, a contractual relationship begins. As a result of the conclusion and execution of a contract, the parties often do not trust each other and are not confident in guarantees in the event of the occurrence of any events. The points that the parties try to set out in the contract are not enough for them, or they are unsure of their correctness. With the onset of contractual relations between the parties, each of them is responsible for the execution of the contract and fulfillment of obligations. Now, if a party is not confident in the other party, it is possible to insure the contract, that is, to insure one’s liability to the person in the event that it is impossible to fulfill the contract.

Liability insurance under the contract is provided for by civil law itself. An important condition for liability insurance is that only the risk of the insured can be insured, otherwise the insurance will be considered void. When insuring liability, the object is the property interests of the persons who entered into the contract. Liability, by its nature, is personal, since in the event of failure to fulfill the contract, the person will have to compensate for losses or penalties to the party who was supposed to fulfill the obligations.