Conclusion, amendment and termination of the contract

Those who engage in entrepreneurial activities often have circumstances that necessitate a change or termination of the contract. In this area, there are certain features and rules that economic actors need to strictly observe. The Civil Code provides for the principle of mandatory implementation of all paragraphs of the bilateral agreement.

Change and termination of the contract are different concepts. The first of these is a procedure in which the validity of the agreement remains, but some changes or clarifications of individual items are introduced. And under termination is understood the termination of mutual relations of subjects up to the date established in the contract. It can be carried out in two- and one-sided order. According to the current legislation, cancellation is carried out only by mutual approval. However, an economic entity has the right to apply to the judiciary for violations of rights or non-performance of duties, which allows to terminate the contract and bring the counterparty to liability.

In practice, the procedure for concluding, amending and terminating a contract is often violated. One party can terminate the agreement without the consent of the second party only if there are grounds for that mentioned in the legislative acts. In addition, significant changes in circumstances may be important reasons. Essential is understood as such violation of the contractual point, which entails loss of funds in a large amount for the partner or other significant inconvenience. Such circumstances drastically change the position of the firm, and therefore are called essential. If specialists could predict the consequences in time, then the agreement would not have been signed at all.

And in these conditions it is actually possible to fulfill the obligations specified in the contract, but the result of the transaction is different from the planned one. Thus, the very essence of the agreement becomes useless, because any relationship should be equally beneficial to the two sides. Change and termination of the contract is used to correct this state of affairs. It is assumed that after the change of some items, the outcome of the agreement will ultimately bring positive benefits to all participants in the transaction.

If partners fail to reach a compromise, then one of the parties has the right to change the agreement forcibly by appealing to the appropriate court. The authorities study in detail the existing agreement in order to identify the reasons for changing and canceling the contract. So, the agreement must satisfy the following conditions:

1. When signing it, the participants in the transaction did not plan to make any changes. That is, the contract was drawn up for a specific period of time and was originally drawn up in such a way as to make a profit.
2. There are circumstances that none of the counterparties could have foreseen, and the occurrence of which did not count at the considered risk level.
3. Further unquestioning execution of contractual points will cause the strongest harm to all parties to the agreement, which means that it is inappropriate. In this case, the possible damage is estimated as a significant loss for the firm.

Conclusion, amendment and termination of a contract is a procedure that has a specific order and is made according to certain rules. The very fact of consent to change certain items or the termination of the contract must be formalized in the form of a contract. In case of resistance of one of the parties, a judicial decision is required.