Q. Can you alter or terminate a contract in the Russia Federation?

A. The relevant regulations of the Russian Federation allows contracts to be altered or terminated as follows:

• Mutual agreement between the parties
• Through the court a party may claim the other party committed a material breach or there is a substantial change in the basis that the parties entered into the contract;
• Relevant law or the contract itself provisions alteration or termination clause.

For companies wishing to alter or terminate a contract, there are two additional important aspects to note:

• Any party who unilaterally alters or terminates the contract could pay additional compensation to the other party.
• Where the contract is more beneficial to one party, the Russian law limits the stronger party to unilaterally alter or terminate the contract, and protects the weaker party.

Companies should carefully evaluate the circumstances before terminating or alliterating contracts. Otherwise, such termination or alternation of the contract could be deemed to cause damage(s) to other party.

If you are looking to invest in Russia and need further assistance in contract or other corporate matters, our international legal and tax experts can assist you. We can examine the specific risks of the Russian legal environment of your business operations and provide the solutions suited to you.

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For further information, please contact Horizons at country.partners@horizons-advisory.com and our Partner in charge will be in touch.