Exercise Of The Right To Change Contractual Obligations By The Parties

Abstract

A contract is an agreement of two or more parties aimed at establishment, change or termination of civil rights and duties (p.1, Art.626 of the Civil Code of Ukraine).

The parties are free in concluding the contract, choosing a contactor and determining conditions of the contract in compliance with the requirements of the Civil and Procedural Code of Ukraine, other acts of civil legislation, customary business practices, as well as the requirements of reasonableness and justice (Art.627 of the Civil Code of Ukraine).

The contents of the contract are made by the conditions (the provisions) determined by the parties and agreed by them, and the conditions which are obligatory according to the acts of civil legislation (p.1, Art.268 of the Civil Code of Ukraine).

The change or termination of the contract may be used upon the parties’ consent only, unless otherwise is established by the contract or the law (p.1 Art.651 of the Civil Code of Ukraine).

For initiating making changes in the contract the party must face (or already find himself/herself in) certain circumstances of subjective and/or objective character.

The procedure of making changes in the contract, unlike grounds for them, is clearly regulated by the provisions of the current legislation (Articles 651, 653, 654, of the Civil Code of Ukraine, Art.188 of the Commercial Code of Ukraine). Thus, in compliance with the provisions of p.1 Art.203 of the Civil Code of Ukraine, the Parties are not allowed to include in the text of the contact the conditions contradicting with them. In fact, it will serve as a ground for the nullity of such conditions of the contract (Art.215 of the Civil Code of Ukraine).

In this article it is analyzed the ability of a Party to exercise the right to change the existing contract conditions. The exercise of this right is made by initiating such change. The author of this article has made the classification of the reasons for contractual obligation change and proposed the algorithm of actions in case the Party intends to change the conditions of the contract.

Following the procedure and the conditions of the obligation change will give the possibility to gain the intended result for the initiating Party and prevent from the violation of the rights and legal interests of the other Party. As a matter of fact, an important issue is to preserve the Parties’ mutual advantage of further cooperation on the ground of the concluded contract. Nevertheless, in the process of negotiating the contract conditions change it may be possible to face the situation when initiating early termination of the contract, not the change of its conditions, will be the most efficient option.