Business and tax

What should you do if a counterparty breaks the contract?

Huquqchi legal team

Record the breach and send a written claim. A business entity must answer the claim within 15 days. You can demand the penalty set by the law or the contract, and compensation for the losses. If there is no result, go to court.

1. Record it

Record the fact of the breach: an act, the correspondence, photographs, an expert opinion. An oral complaint is hard to prove later.

2. Send a claim

A claim takes written form. State the circumstances, the evidence, your demand, the sum and its calculation. Send the claim by registered letter, or hand it over against a receipt, and keep the proof of delivery. A business entity must answer the claim within 15 days from the day it receives the claim.

3. What you can demand

Performance of the obligation in kind; a penalty (a fine or interest for late payment); compensation for the losses (article 324 of the Civil Code); on a material breach of the contract — termination of the contract through the court and compensation for the losses that the termination causes.

4. The court

A dispute between business entities goes to the economic court. If the answer to the claim is a refusal, or no answer comes within the set time, you can file a statement of claim with the economic court. If the contract sets a procedure for the settlement of disputes, follow it.

Legal sources

Legal basisCivil Code, article 324 Legal basisLaw on the contractual and legal basis, article 17 Legal basisLaw on the contractual and legal basis, article 18

This article gives legal information, not legal advice. For your own situation, consult a qualified lawyer.