The principle in contracts is that they are binding on both sides, meaning that one of the two parties cannot unilaterally terminate the contract without the consent of the other contracting party. Where the negation of the contract is one of the means of dissolving the valid contract binding on both sides, and it takes place by the common will of the contracting parties, and it is possible that the compromise be agreed upon before or during the implementation of the obligations arranged by the contract.

Definition of Negation of Contract

The definition of abandonment of the contract came in the rulings of the Kuwaiti Court of Cassation as an agreement between the two parties after the conclusion of the contract and before its expiry to cancel it, and it may be with an explicit offer and acceptance or an implicit offer and acceptance. The one who adheres to the occurrence of the dispute must establish evidence of the facts and circumstances that are considered revealing of the will of the two parties to the contract and their convergence to dissolve the contract.

Conditions for the validity of the Negation of the contract

The legislator stipulated in the Kuwaiti civil law for the validity of the dismissal from the contract that the contracting parties agree to it after its conclusion, with the thing contracted on remaining in existence and in the hands of one of the contracting parties, if it perishes or is damaged or some of the contracted items have been disposed of to others, it is permissible to dismiss the rest of it in proportion to its share of the consideration.

Accordingly, the subject of the contract to be dissolved by slander must exist and exist at the time of termination of the contract, otherwise the assignment will be void due to the absence of the location. Accordingly, it is not correct to negotiate in immediate contracts, such as the sale contract, if the thing sold perishes in the hands of the buyer. It is not valid to negotiate due to the impossibility of the contracting parties returning to what they were before the contract.

Negation Effects

The two parties to the contract aim from the transfer agreement to dissolve the contract concluded between them, and the consequent dissolution of each of the two parties to the contract from the obligations of the contract and the discharge of the contracting parties without the need for a court ruling or an excuse.

The termination of the contract and its effect, leads to the retroactive dissolution of the contract between the contracting parties and the two contracting parties are returned to the state they were in before the contract. The effect of removing the contract extends not only to the future but also to the past, and does not preclude the judiciary to compensate the contracting party who has suffered damage, unless this is due to a mistake on his part.

The retroactive effect of dismissal is only in the relationship between the two contracting parties themselves. As for third parties, the dismissal has no effect except from the date of its occurrence. For this reason, the Kuwaiti legislator considered the dismissal in Article 218 of the Civil Code as a new contract against others.

The court’s authority to determine whether or not a negation occurred

One of the contracting parties may resort to the judiciary, when the other contracting party denies the negation. The trial court may conclude whether the agreement was reached or not, which is one of the substantive issues that the court is independent of without oversight, when it bases its judgment on justifiable reasons that lead to the result it reached. According to the trial court, she said, by implicit argument, to cite facts and circumstances that she considers revealing of the contracting parties’ will, and to show how these two wills converged to dissolve the contract, considering that this is a way of understanding the reality in the case.

If you are looking for a Kuwaiti law firm that specializes in providing legal services to the securities, capital and stock market activities, you can count on us at Taqneen, Law Firm and Legal Consultations.

To book an appointment or request legal advice about the duties of securities companies in the optimal implementation of clients’ orders, we are pleased to receive your inquiries at (info@Taqneen.com).