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Most contracts expire when both parties have fulfilled their contractual obligations, but it is not uncommon for a party to fail to fully terminate its contract. Breach of contract is the most common reason why contractual disputes are to be resolved. The simplest way to prove the existence of a contract is a written document signed by both parties. It is also possible to impose an oral contract, although some types of agreements still require a written contract to carry legal weight. These types of contracts include the sale of goods for more than $500, the sale or transfer of land and contracts that remain in effect more than one year after the parties sign the agreement. The problem is also that there is no legal precedent for the new provisions, namely insurance, business contracts and other things, which means that the court`s decision can be unpredictable. In such a case, the investor and the start-up are not interested in taking the dispute to court to determine who caused what damage and under what conditions and whether they were fair or not. It is much easier to establish a hefty fine in the contract and attach it to certain facts. The controversial treaty can then be protected. It`s natural if the court doesn`t reduce the sentence.
On the one hand, it`s fair, but on the other hand – for example, if the tax claims generated by the start-up founder are made, you can`t force him to compensate them. You can claim a firm fine for the offences, but you cannot apply them to third-party requirements, because, say, the same tax authority is a public authority, not a contracting party. But there`s good news. First, since the spring, the parties can reach an agreement on damages (Article 406.1 of the Civil Code of the Russian Federation). The fact is that if the start-up lied in insurance, it is possible to recover from him not only a firm fine, but also some compensation for new expenses. Say, a startup claimed there was no tax debt, but a year later he was fined a huge amount. This is not solved by complex sanctions, but within the framework of the agreement: not only does the founder of start-up guarantee that he has no problems, but he also assumes full responsibility. (d) A breach of the agreement by the beneficiary as a result of the employee`s or board member`s conduct leads the company to terminate the recipient`s grant or LSC contract.