Comment on the articles in Paragraph 3. Delivery Chapter 25 of the Civil Code of the Republic of Kazakhstan
Delivery is one of the most common business contracts. Delivery is a type of purchase and sale and is sometimes called an entrepreneurial, or commercial, purchase and sale.
With the transition to a market economy, supply to the GC acquired the features of a traditional purchase and sale. The provisions of the Vienna Convention on Contracts for the International Sale of Goods of April 11, 1980, as well as the INCOTERMS Rules, are becoming increasingly used in the conclusion and execution of supply contracts
The main feature of the delivery contract is the special nature of the use of the goods that are its subject. According to Art. 458 of the Civil Code, such goods are purchased for use in business activities or for other purposes unrelated to personal, family, household and other household use. Unlike an ordinary retail purchase and sale agreement, goods are purchased under a supply agreement for further productive consumption, i.e. such use of it, during which the product either directly retains its value (as a result of resale), or transfers it to other goods (during production). Meanwhile, as a result of personal and other household (i.e. unproductive) consumption, the commodity ceases to exist as a definite value. This makes it possible to characterize the purposes of using goods under a supply agreement as entrepreneurial.
Any items that have not been withdrawn from circulation may be the subject of a supply agreement. In most cases, they are determined by generic characteristics (for example, the supply of cotton), but the law does not prevent the sale of individually defined items (the supply of electric motors of certain brands). At the time of the conclusion of the contract, the supplier, as a rule, does not yet have the goods available for delivery. However, non-profit organizations can also carry out business activities that correspond to their statutory goals and are necessary to achieve them (Clause 3, Article 34 of the Civil Code).
Article 458 of the Civil Code restricts the subject of the supply contract to goods that are produced or purchased by suppliers. At the same time, the goods produced or purchased by the supplier do not exhaust the subject of the contract, and the corresponding provision of art. 458 of the Civil Code should be interpreted more broadly, because ownership of goods can be acquired in other ways as a result of, for example, processing.
The sale of such things as an enterprise, agricultural products, energy and energy carriers is not formalized by a supply contract, but by other types of purchase and sale agreements, which will be discussed further in the following paragraphs of this chapter.
Securities and property rights cannot be the subject of delivery due to the dual nature of the former and the impossibility of being the object of the property rights of the latter.
The subject matter of the supply contract is also peculiar, in contrast to similar civil law contracts.
The parties to the supply agreement are persons engaged in business activities. As a rule, commercial organizations and individual entrepreneurs act on the supplier's side. In principle, any legal and natural persons can be buyers in the supply contract (with the exception of a citizen who purchases household goods). The State can also act as a buyer under a supply agreement (for example, by purchasing goods for government needs).
The delivery agreement is bilateral. Its parties are the supplier and the buyer.
An important distinguishing feature of the delivery contract is the time discrepancy between the conclusion of the contract and the transfer of the goods, which must occur later, since the goods to be delivered by the time of the contract are often missing in kind, they must be produced or procured by the supplier in accordance with the buyer's order, and the delivery contract serves the process of material or commodity supply to buyers, which It often requires a systematic repeated transfer of goods in separate batches over a long period of time.
The signs of a supply contract are the same as those of other contracts.:
1) the supply contract is consensual;
2) the delivery contract is reimbursable, since in accordance with art. 469 of the Civil Code, the buyer is obliged to pay a certain amount of money for the goods received.;
3) the supply contract is mutual, because each of the participants is endowed with rights and obligations towards each other (see Articles 462, 464, 466, 473, 476 of the Civil Code, etc.);
4) it does not belong to the number of public contracts, however, in cases established by law (for example, Article 387 of the Civil Code), its conclusion is mandatory for the supplier, for example, for the supply of goods for state needs on the basis of a state order. Article 13 of the Decree of the President of the Republic of Kazakhstan, which has the force of Law, dated June 19, 1995 "On a State-owned enterprise" stipulates that "for a state-owned enterprise, the fulfillment of a state order is mandatory. An enterprise has no right to refuse to conclude contracts as a buyer or seller of goods (works, services) if the conclusion of these contracts is provided for by an order from the state." In these cases, the state-owned enterprise is obliged to conclude a contract.
The form and procedure for concluding a supply contract are regulated by the Civil Code, taking into account the noted features of this obligation. The need, on the one hand, to formalize the procedure for concluding a contract, and, on the other, to ensure the stability of economic turnover led to the appearance in the Civil Code of art. 459, regulating the procedure for concluding a supply contract. The meaning of the rule established by Art. 459 of the Civil Code is as follows. The offeror, who has received a counteroffer rather than an acceptance for his offer to conclude a contract, is obliged, within 30 days from the date of receipt of the latter, to take measures to coordinate the relevant terms of the contract with the partner or notify him of the refusal to conclude the contract on new terms. If the original offeror did not fulfill this obligation (i.e. did not agree on the final terms of the contract and did not notify the partner of the cancellation of the contract), he must compensate for the losses caused by evasion from agreeing on the terms of the contract (see paragraph 2 of art. 459 of the Civil Code). Such losses may include, in particular, the expenses of the party that sent the notification of consent to conclude an agreement with a proposal to coordinate its terms, if they are incurred in connection with the preparation and organization of the execution of this agreement, undertaken before the expiration of the 30-day period from the date of receipt by the person who sent the offer, acceptance on other terms.
The price condition in relation to the supply contract is not specifically regulated. Consequently, by virtue of the general provisions on purchase and sale, it does not relate to the essential terms of this agreement. The price of the contract is usually agreed upon by the parties. Prices for certain types of goods (for example, for defense products) are set or regulated by the state. In cases where the contract was concluded in a legally valid manner, but it does not directly or indirectly specify the price or provide for the procedure for determining it, it is assumed that the parties, in the absence of any indication to the contrary, implied a reference to the price that was usually charged at the time of the conclusion of the contract for such goods sold at comparable circumstances in the relevant area of supply.
The term is an essential condition of the supply contract, as follows from its definition. The term (or terms) of execution of the contract is determined by its parties. If the term of its validity is not specified in the contract and does not follow from the nature of the obligation, the contract is considered concluded for one year (clause 1 of Article 460 of the Civil Code).
The buyer's obligation to pay for the goods in the delivery has special features. As a general rule, settlements between the parties are carried out by payment orders (Article 469 of the Civil Code). If the buyer has delegated payment to the recipient of the goods, he continues to bear the corresponding obligation to the supplier. Therefore, in case of non-payment of goods by the recipient, the supplier has the right to make a corresponding claim to the buyer. Norms on repayment of homogeneous obligations under several supply contracts (art. 475 CC) are applied in cases where the buyer, who is settling accounts with the supplier under several supply contracts, has paid an amount insufficient to pay for all contracts. In this case, the buyer has the right to tell the seller which contract he is sending money to pay for. In the absence of such an indication, the transferred amounts are credited to the repayment of the obligation, the due date of which has come earlier than others. The international Convention provides for the right to interest (see article 78 of the Vienna Convention on Contracts of International Sale). If a party is overdue in paying a price or other amount, the other party is entitled to interest on the overdue amount without prejudice to any claim for damages that could be recovered in a general manner, for example, in accordance with art. 9 of the Civil Code.
The general rules on the obligations of the seller to inform the buyer about the violation of the contract, provided for in art. 437 of the Civil Code, apply to the delivery.
Taking into account the entrepreneurial nature of the supply contract, liability for its violation is usually based on risk principles. The main forms of liability are compensation for losses and payment of penalties. Damages for violation of the contract by one of the parties amount to the amount of damage, including lost profits, incurred by the other party as a result of the violation of the contract. Such losses may not exceed the damage that the party that violated the contract foresaw or should have foreseen at the time of conclusion of the contract as a possible consequence of its violation, given the circumstances that it knew or should have known about at that time.
Article 477 of the Civil Code provides rules for determining the amount of losses upon termination of a supply contract. Thus, a party that terminated a contract due to a breach of an obligation by a counterparty, and then within a reasonable period after termination bought (sold) goods at a higher (lower) but still reasonable price, has the right to demand compensation from the counterparty in the form of the difference between the original contractual price and the price of the transaction made in return (clauses 1 and 2). 477 of the Civil Code).
At the same time, clause 3 of Article 477 of the Civil Code contains a new rule for our legislation on how to determine so-called "abstract losses".1. These losses are calculated in the form of the difference in prices of two (specific) transactions. So, if, after the termination of the contract due to the violation of the obligation by the counterparty, the aggrieved party has not made another transaction to replace the terminated contract, the amount of losses incurred by it is determined as the difference between the contract price and the current price of the goods at the time of termination of the contract. The current price is considered to be the price usually charged under comparable circumstances for a similar product at the place of its intended transfer. The amount of real damage to be recovered in addition to lost profits is determined according to the general rules of clause 4 of Article 9 of the Civil Code. These liability measures are more progressive in our legislation than in previous legislation.
Termination of the delivery agreement.
The general grounds and procedure for termination (amendment) of the purchase and sale agreement provided for in Section 1 of Chapter 30 of the Civil Code, as applied to delivery, are specified in art. 476 of the Civil Code. Thus, unilateral refusal to execute a supply contract (or its modification) is allowed in cases of significant violation of its terms by one of the parties. Such violations for the supplier are considered to be:
a) delivery of goods of inadequate quality with defects that cannot be eliminated within a reasonable time for the buyer,
b) repeated delay in delivery.
Significant violations of the contract by the buyer are expressed in:
a) repeated late payment of goods
b) repeated non- selection of goods .
At the same time, paragraph 4 of Article 476 of the Civil Code provides for the possibility to provide in the contract other grounds for refusal to perform the supply contract. These include, for example: delivery of substandard (or incomplete) goods, late delivery or payment, non-selection of goods, and failure to submit shipping orders.
However, Article 476 of the Civil Code lists not only special grounds, but also the corresponding procedure for termination (amendment) of the supply contract. The specified agreement is considered terminated (amended), as a general rule, from the moment one party receives a notification from the counterparty about the unilateral refusal to perform the agreement in whole or in part. Thus, in cases of significant violation of the supply contract provided for in clauses 2 and 3 of art. 476 of the Civil Code, there is no need to file a lawsuit or obtain prior consent from the counterparty to terminate (amend) the contract, which is required by Clause 2 of Article 402 of the Civil Code. In the international practice of regulating the provisions on termination of a contract, there is the following rule: termination of the contract releases both parties from their obligations under the contract while retaining the right to recover damages that may be subject to compensation. The termination of the contract does not affect any provisions of the contract concerning the dispute resolution procedure or the rights and obligations of the parties in the event of its termination (see Article 81 of the Convention on Contracts for the International Sale of Goods)1.
If the violation of the supply contract is not significant (i.e., it is usually a one-time violation), the procedure for termination (amendment) of the contract is regulated not by clause 4 of Article 476 of the Civil Code, but by the general rules of Article 401 of the Civil Code.
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The commentary was prepared within the framework of the scientific and practical research program of the Scientific Research Center of Private Law of the Kazakh State Law University.
Head of the working group on the preparation of the draft Civil Code of the Republic of Kazakhstan, Corresponding Member of the Academy of Sciences of the Republic of Kazakhstan, Professor Suleimenov M.K.
Deputy head Professor Basin Yu.G.
