Termination of the Contract after Overdue Payment

The buyer purchased a complex consisting of movable and immovable property on an installment plan. However, he failed to pay the seller on time. The final payment was two years late. One month after the last payment, the seller returned the money (allegedly, the amount was credited as a wrongfully made payment).  He was no longer interested in completing the settlement of accounts. The seller wanted to get the property back. Therefore, he filed a lawsuit to terminate the contract. The claimant pointed to long late payment on the part of the buyer as the reason for such termination.  The Novokuznetsk District Court upheld the claim and terminated the contract. At this stage our specialists got involved. The task of the lawyers was: to get the court decision reversed and the claim dismissed.

The complexity of the case: the claimant insisted that he was willing to get the property back allegedly long before the time the buyer paid the last installment.  He insisted that that he had sent a claim to that effect reasonably in advance. The mailing receipt was presented to the court. The lawyers did the following:                                                                                                                                                                                         
1. Proved that the receipt belonged to a different document. It confirmed that the claim had been mailed, however, it related not to the termination of the contract but the repayment of the debt. It was mailed long before the dispute.  2. Convinced the court that the contract was settled, albeit in violation of the time but before the seller decided to withdraw from the contract due to violation of the settlement procedure. 3. Proved that the buyer had fulfilled his payment obligations. The delay was attributable to the seller because he, as a creditor, refused to accept the discharge.           

The seller’s refusal to accept money as payment (and refund of that money) is treated by the Civil Code as “refusal to accept discharge” and “delay on the part of the creditor”.  According to the law, this constitutes the creditor’s failure (in our case, a failure of the seller of the property) which deprives him of the right to demand termination of the contract. The court of first instance, however, decided that there were grounds for terminating the contract. The refund made by the seller to the buyer was regarded by the court as a good faith refund since the delay was material at the time the refund was made. Our lawyers succeeded in having that court decision reversed and proving that the termination of the contract was unlawful. Our client continued to own the purchased property.