Among all the agreements concluded in the framework of civil turnover, one of the most popular is the supply contract. The concept and features of this transaction are disclosed in article 506 of the Civil Code. Let's consider it in more detail.
General information
According to Article 506 of the Civil Code, under a supply contract, the seller-entrepreneur assumes the obligation to deliver the goods to the buyer, who is also an entrepreneur, within the agreed period for purposes not related to home, family or other similar use.
Such a transaction is considered a form of sale. However, the features and complexity of the execution of the supply agreement make it possible to distinguish it in a relatively independent form.
The supplier
The first feature of a supply contract is its subject composition. The supplier may only be a person conducting business. Traditionally, it is understood as actions aimed at obtaining economic benefits.
To conduct entrepreneurial activity, according to the law, commercial enterprises and individual entrepreneurs can. Non-profit structures can benefit and act as suppliers only if it is expressly enshrined in the charter. At the same time, their entrepreneurial activity should be aimed at realizing the goals for which they were created.
It seems that the supplier under the contract may be an organization that is engaged not in any abstract activity, but in the professional production of goods or their purchase.
Buyer
One of the key features of concluding a contract for the supply of goods is its purpose. The purchaser buys products for purposes not related to home, personal or other similar use.
This feature of the supply agreement indicates that the buyer may be a commercial organization or individual entrepreneur engaged in professional activities for the procurement of goods.
Goal specifics
Features of the supply contract are disclosed in the decision of the Supreme Commercial Administration No. 18 of 1997. Paragraph 5 of this act states that the purposes not related to personal or other similar use should be considered the purchase of products to ensure the activities of the acquirer. For example, this may be the purchase of office equipment, furniture, materials for repair, etc. When buying these goods from a retailer, the relations of the parties to the transaction are governed by the provisions on retail sale.
Normative regulation
As mentioned above, the transaction in question is a type of sale. However, due to the nature of the supply contract, special rules apply to it. They are enshrined in the third paragraph 30 of the chapter of the Civil Code. These provisions take precedence over the general rules enshrined in the first paragraph of the same chapter. This ratio corresponds to the principle that applies to all legal relations - the priority of special rules over general ones.
Based on this, it is possible to determine the sequence of provisions to be applied to the supply contract. The peculiarity of legal regulation is that first special rules on sale and purchase are applied, and if they are absent, general provisions. After that, if necessary, the rules on civil contracts and obligations are used.
A similar approach is applied in arbitration practice. So, in paragraph 3 of the resolution of the Supreme Arbitration Court of Ukraine No. 18 there is an explanation according to which, in disputes relating to the particularities of the execution of the supply contract, the court must be guided by the necessary norms enshrined in the third paragraph 30 of the Civil Code chapter. If they are absent, then the provisions indicated in the first paragraph of Ch. 30. If there is no necessary information there, they turn to the general rules on the contract, transactions and obligations.
Application of by-laws
There are special regulations that govern the supply contract. The peculiarity of these legal documents is that they fix the special conditions for the supply of certain types of products that have been in force since Soviet times. Therefore, in their application there is a twofold situation.
On the one hand, the general rules on sale and purchase, contracts and transactions in the legal plan that are enshrined in the current Civil Code today exclude the possibility of using the provisions of these acts in practice. At the same time, clause 4 of Resolution No. 18 contains a clause according to which under certain conditions they can be applied. Courts have the right to use the provisions of these acts to the extent not contrary to the peremptory norms of the code.
In this case, a prerequisite for their application is the presence in the supply contract of a reference to specific points of these acts or wording, from which it clearly follows that the parties did not use them as norms, but agreed terms of the obligation. In particular, we are talking about the Regulations governing the supply of industrial goods and consumer goods, which were approved back in 1988 by Decree of the Council of Ministers No. 888.
Counterparty Verification
So, individuals-entrepreneurs or commercial enterprises participate in the supply contract. These entities acquire their status as a result of state registration.
Considering the features of the contract for the supply of goods, it is recommended that you request confirmation from the counterparty before concluding it. They, in particular, are the certificate of state registration and constituent documentation.
This check will avoid problems in the future. For example, after the agreement is completed, the buyer will find out that the supplier has not passed state registration in the prescribed manner and, accordingly, does not legally exist as an economic entity. However, to oblige an unscrupulous counterparty to pay the amount specified in the contract, or to fulfill the obligations established by the terms of the investigation, will be very difficult even in court.
Request the necessary documents first from the counterparty. If the potential partner did not provide them, then you can contact the registration authority. In accordance with the current legislation, the Federal Tax Service acts as it.
Information about persons who have passed state registration and received the status of an individual entrepreneur or legal entity is present in special registers. Information is provided upon written request of the person concerned. The request can be made in any form.
Arbitrage practice
Often a supply contract is invalidated due to the lack of state registration of one of its parties. When making decisions on such disputes, the courts take into account the actions of the defendants to refute the plaintiffs' arguments. At the same time, the authorities indicate that the fact of the execution of the transaction does not prove the status of legal entity or individual entrepreneur on whose behalf the transaction was concluded. These grounds are sufficient to invalidate the agreement.
Third Party Involvement
Another feature of concluding a supply contract is the possibility of involving a third party in execution. At the same time, it will not be a party to the transaction, but an important function will be assigned to it. The third party, in particular, is the recipient. By his consent, an obligation may be assigned to accept and pay for the goods.
The parties can determine the recipient directly in the contract itself or indicate information about it in the shipping documentation sent by the buyer to the supplier, if the corresponding possibility is provided for by agreement.
Features of concluding a supply contract
The form of the supply contract in the legislation is not specifically defined. Therefore, you should be guided by the general rules on civil law agreements.
An important feature of concluding a supply contract should be noted: it can be executed both in written and oral form. However, the latter form is not always allowed. An oral agreement may be allowed if both parties to the transaction are physical entrepreneurs, and the delivery amount is less than 10 minimum wages. However, experts recommend even in these cases to draw up a written document.
Content of the agreement
The terms of the transaction include the terms and subject matter. The latter is recognized as established if its content can determine the name and quantity of products.
Unlike sales transactions, a supply agreement may be concluded solely with respect to goods. However, they should be intended for use in business. This can be industrial processing, installation, resale, etc.
Immovable objects, the sale and purchase of which is carried out according to the special rules of pairs, cannot act as the subject of a contract. 7 30 chapters of the Civil Code.
Delivery time
It is determined within the contract period. Delivery may take place on a specific calendar date or time period.
Quite often, a supply contract provides for not a single, but a regular supply of products. Its total volume is divided into several parts. Counterparties in such situations agree on the timing of the transfer of individual parties. For example, a product can be delivered quarterly, monthly, etc.
If the agreement provides for the transfer of products in several batches, but the timing is not specified, then the goods should be transferred in equal batches on a monthly basis, unless otherwise provided by law or follows from the nature of the transaction or the customs of circulation.
Together with the delivery periods, the parties can set its schedule.
Cost of goods
It is determined by the parties to the transaction by agreement. In cases enshrined in regulatory enactments, prices are applied to certain types of products, regulated or set by authorized state structures.
According to general rules, if there is no condition on the cost of goods in the contract, and it cannot be determined by the content of the agreement, payment should be made at the price usually charged for similar goods in similar conditions.
Product quality
The key responsibility of the supplier is to transfer to the acquirer products whose condition is consistent with the terms of the transaction.
When determining the quality of the goods, the parties to the agreement should be guided by the applicable standards, conditions or other regulatory and technical documents. If there are no conditions on the quality of products in the contract, the supplier is obliged to transfer the product to the purchaser in a condition suitable for use for the purposes for which such goods are usually used.
Responsibility
Article 518 of the Civil Code stipulates the consequences of providing low-quality products to the buyer. In such cases, the acquirer may forward to the supplier the requirements enshrined in 475 of the Code. An exception is the situation when the seller, after receiving complaints from the buyer, immediately replaces low-quality goods.
If products have been delivered to the recipient / purchaser in violation of the terms of the contract, provisions of the law and other legal acts, he may present the requirements provided for in article 480 of the Civil Code. An exception is when a supplier who receives a customer’s complaint immediately replaces an incomplete product.
Features of the contract for the supply of goods for state needs
Currently, government procurement is becoming especially popular. Many enterprises and entrepreneurs participate in them, seeking to expand the scope of sales of their products.
A feature of a supply contract for state needs is the purpose of acquiring products. Products are bought to meet the needs of authorities. At the same time, budget funds are allocated for the purchase of goods.
Public procurement is currently regulated by the provisions of the Federal Law No. 44. This regulatory act enshrines all the nuances relating to participation in such orders.
Additionally
The legislation allows a unilateral refusal to comply with the terms of the agreement if there are significant violations by the counterparty. They, for example, are recognized:
- delivery of products of inadequate quality with defects, the elimination of which is impossible for the purchaser in a period impossible;
- repeated violation of the established delivery time.
The contract will be deemed terminated upon receipt by one party of a notice from the other party on the unilateral refusal to fulfill the terms of the transaction, unless another period is specified by the contract itself or indicated in the notice.