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Friendship under contract

Friendship under contract

Payment of works executed without a state contract causes controversial situations between the contractor and the customer that often end up in court. The position of governmental authorities of such cases is unambiguous: works executed without a governmental contract or not provided by it are not subject to payment – even if accepted by the customer, used and have consumer value.
Head of employment and sports law group of YUST Law Firm Alexander Ksenofontov together with portal examined the statistics of cases on disputes concerning payment for works executed without a state contract for the past half a year. The lawyer came to a conclusion that for these cases courts generally apply the method of dispute resolution proposed by the Panel on this type of cases. Alexander Ksenofontov established general criteria that courts rely on in their practice when delivering judgments in favor of suppliers concerning payment of works (services, goods) supplied without a state contract:

  • the supplier cannot refuse to execute works, provide services, supply goods by operation of law even in the absence of a contract: for example, an electricity supply organization cannot turn off electricity at a military base;
  • the relations between the supplier and the buyer are of continuous nature; for example, based on a contract effective earlier but currently expired;
  • the supplier acts in the interests of the public; for example, rendering of governmental services, providing security; there are no complaints from the customer concerning the amount and quantity of works (services, goods);
  • supply of works, services, goods complies with the requirements on fair competition;
  • the supply does not lead to unjustified budget expenses.
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