The state contract was terminated by agreement – the court did not consider the subsequent transaction to be a substitute and did not recover damages

24 June 2024, Monday

The state contract was terminated by agreement – the court did not consider the subsequent transaction to be a substitute and did not recover damages

The parties have concluded a contract for the supply of goods. Prior to its execution, the counterparty informed the customer that he did not have the manpower to fulfill the obligations. And he offered to cancel the deal. The contract was terminated by agreement.

The customer purchased more expensive products, so he demanded that the supplier reimburse the price difference for the initial transaction.

Three instances did not consider the repeated transaction to be a substitute and the money was not recovered:

the original contract was terminated by agreement, which indicated that the parties had no mutual claims. So they voluntarily settled all the consequences of its termination;

It has not been proven that the losses were caused by the supplier. It does not follow from the correspondence of the parties that he is to blame for the breakdown of the deal. The signing of the agreement means that the customer considered the reasons why the supplier could not fulfill the obligations to be valid;

There are no provisions in the agreement stating that the supplier violated the contract, nor conditions for compensating the customer for losses.

In practice, one can find an example of a situation where disputed losses were recovered from the supplier, although the parties terminated the contract by agreement.

Document: Resolution of the Arbitration Court of the North-Western District of 06.06.2024 in case N A56-27839/2023.

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