Why is it important to notify about the suspension of work and how to do it correctly?

First, we note that the law provides for two situations when a contractor is obliged to suspend work, and when it is his right to suspend work. The legislation stipulates several cases when the contractor is obliged to suspend work, immediately notify the customer and wait for his instructions (Clause 1 of Article 716 of the Civil Code of the Russian Federation).

These are the cases:

1. The customer provided substandard (unsuitable) materials, technical documentation, or equipment.
2. Following the customer’s instructions on how to perform the work may entail adverse consequences for him (the Customer).
3. The presence of other circumstances beyond the contractor’s control that threaten the validity or durability of the results of the work performed or make it impossible to complete it on time.

Accordingly, in all other cases, the suspension of work is the contractor’s right, which he may or may not use.

Learn more about the standards

So, the general rule (Part 2 of Article 328 of the Civil Code of the Russian Federation) provides that in the event of failure to fulfill the obligation stipulated in the contract, the other party responsible for the counter-fulfillment has the right to suspend the fulfillment of its obligation.

A special rule regarding obligations to perform work is fixed in Article 719 of the Civil Code of the Russian Federation.

Most often, the contractor is forced to suspend work in the following cases (the most common):

• the customer does not provide the necessary materials or equipment for the work;
• the customer does not provide the necessary technical and working documentation;
• the customer delays payment for the completed stage of work;
• the customer delays the necessary approvals;
• other circumstances agreed upon by the parties in the contract.

Important!

The contractor may not always exercise the right to suspend work in case of a delay in payment for work. In judicial practice, there is an opinion that if the absence of payment for one of the stages does not affect the timing of work (i.e., payment does not affect the time of commencement or suspension of work, but only relates to the settlement procedure), then in this case, the contractor does not have the right to suspend work, referring to the fact that the customer did not payment.

Resolution of the Nineteenth Arbitration Court of Appeal dated 06/16/2020 N 19AP-746/2020 in case N A64-3966/2019.

Judicial practice

However, the established judicial practice proceeds precisely from the fact that if, due to circumstances, the contractor decides to suspend work, he IS OBLIGED to notify the customer about it.

Important!

• Paragraph 57 of the Resolution of the Plenum of the Supreme Court of the Russian Federation dated 11/22/2016 No. 54 “On some issues of the application of the General Provisions of the Civil Code of the Russian Federation on obligations and their fulfillment”;
• Definition of the Supreme Arbitration Court of the Russian Federation dated 04/23/2009 No. VAS-4197/09;
• Resolution of the Ninth Arbitration Court of Appeal dated 04/26/2021 N 09AP-4967/2021 in case N A40-90494/2020.

Most often, the problem occurs when the contractor simply suspends work, but does not notify the customer about it.

Why? Because the contractor himself becomes a violator of the contract. The work period is not suspended without notifying the customer. And if the suspension of work is significant, there is a risk that the contractor will violate the deadlines due to its “silence”, and then the contractor will be responsible for violating the terms of the contract.

Conversely, if the customer is properly notified, the deadline for completing the work is suspended, and further extended for the period of suspension.

How do I notify the customer correctly?

Note that the procedure for notifying the customer of the suspension of work described below is applicable both to situations where the suspension of work is the contractor’s responsibility and to situations where it is the right.

The procedure for notifying the customer may be stipulated in the contract (and even the form of such notification). However, if there are no such conditions in the contract, then the following algorithm should be followed:

• A written notice must be prepared. The notification should include the following information:
  contract details;
  the circumstances that served as the basis for the suspension of work, as well as the grounds for the suspension of work (the provisions of the law or the clause of the contract);
  the period or circumstances before which the work is suspended.
  a clear indication of the suspension of work. It should clearly follow from the text of the notification that you are suspending work.
• Send a notification to the requester. If there is no special procedure for sending a notification (not provided for in the contract), send it by registered mail with an attachment list to the address specified in the Unified State Register of Legal Entities.

To summarize, let’s summarize