Peculiarities of limitation for recovering an advance paid under a delivery contract
June 17, 2019

When a buyer tries to collect advance payments from a suppler after the latter failed to deliver the goods, in some cases, the defendant declares that the claimant missed the limitation period.

In this case, the defendant incorrectly determined the beginning of the course of the limitation period.

Article 523 of the Civil Code allows the buyer to declare a unilateral refusal to execute the supply agreement.

Since the implementation of the buyer's right to terminate the supply contract in the order of art. 523 of the Civil Code of the Russian Federation the obligation of the defendant to transfer the goods is transformed into a monetary obligation.

This monetary obligation is an unjustified enrichment of the defendant in accordance with paragraph 1 of the Information Letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated January 11, 2000. No. 49 "Review of the practice of dealing with disputes involving the use of rules on unjust enrichment."

The Information Letter clarified that the funds received prior to the termination of the contract, if the receiving party did not grant consideration and the obligation to provide it disappeared, are unjust enrichment.

Thus, the limitation period is not calculated from the date when the plaintiff found out that the goods were not delivered, but from the date of the contract being terminated, as the claim was filed for collecting unjust enrichment arising on the side of the defendant in connection with termination of the contract.

This argument of the claimant on the procedure for calculating the limitation period was supported by the courts in a number of cases on the recovery of unjust enrichment arising from the termination of the supply agreement.

The interests of the plaintiff were represented by an employee of the Moscow Law Office "ZASCHITA" – A.I. Kolodiy.

Alexandrina Kolodiy