Civil Code of the RK — Chapter 40 «Insurance»

Unofficial English summary prepared for informational purposes. Official source: Әділет / adilet.zan.kz. Version checked: 2026-06-20. This is a reference card; in case of discrepancies, the official Kazakh and Russian texts prevail.

Metadata

Act number	ГК, гл. 40
Act type	Code chapter
Authority	Parliament of the RK
Adoption date	01.07.1999
Last amended	16.01.2026
Status	In force
Әділет identifier	K990000409_

Scope and relevance

Chapter 40 of the Special Part of the Civil Code (Articles 803–845) sets the basic civil-law norms on insurance: the insurance contract, forms and types of insurance, the rights and obligations of the parties, and the payment. The general civil-law foundation on which special insurance legislation relies.

Official source

• Full text (RU) — adilet.zan.kz
• Full text (KK) — adilet.zan.kz

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Official source: Adilet / https://adilet.zan.kz/rus/docs/K990000409_ The relevance of the editorial office has been verified: 2026-06-20.

Note FROM! Contents have been created for ease of use.

CONTENT

Section 4 Certain types of obligations

Chapter 25. Purchase and sale

Paragraph 1. General provisions on purchase and sale

Article 406. Sale and purchase agreement

1. Under a purchase and sale agreement, one party (seller) undertakes to transfer property (goods) into ownership, economic management or operational management to the other party (buyer), and the buyer undertakes to accept this property (goods) and pay a certain amount of money (price) for it.

2. The provisions provided for in this paragraph apply to the purchase and sale of securities and currency values ​​and digital financial assets, unless legislative acts establish special rules for their purchase and sale.

2-1. Features of the purchase and sale of goods when carrying out Islamic banking operations are established by the legislative acts of the Republic of Kazakhstan regulating banking activities.

3. In cases provided for by this Code or other legislative acts, the specifics of the purchase and sale of certain types of goods are determined by legislative and other regulatory legal acts.

4. The provisions provided for in this paragraph apply to the sale of property rights, unless otherwise follows from the content or nature of these rights.

5. The provisions provided for in this paragraph apply to certain types of sales contracts (retail purchase and sale, supply of goods, energy supply, contracting, sale of an enterprise), unless otherwise provided by the rules of this Code on contracts of these types.

6. When selling property in the manner established for the execution of court decisions, the bailiff acts as the seller.

Article 407. Conditions of the contract for goods

1. The goods under a sales contract can be any thing in compliance with the rules of Article 116 of this Code.

2. An agreement may be concluded for the purchase and sale of goods available to the seller at the time of conclusion of the agreement, as well as goods that will be created or acquired by the seller in the future, unless otherwise established by legislative acts or follows from the nature of the goods.

3. The terms of the goods are considered agreed upon if the contract makes it possible to determine the name and quantity of goods (essential conditions).

Article 408. Obligations of the seller to transfer the goods

1. The seller is obliged to transfer to the buyer the goods provided for in the contract.

2. Unless otherwise provided by the contract, the seller is obliged, simultaneously with the transfer of the goods, to transfer to the buyer its accessories, as well as documents related to it (documents certifying the completeness, safety, quality of the goods, operating procedures, etc.) provided for by regulatory legal acts or the contract.

Article 409. Time limit for fulfilling the obligation to transfer goods

1. The period for fulfillment by the seller of the obligation to transfer the goods to the buyer is determined by the contract, and if the contract does not allow determining the period - in accordance with the rules provided for in Article 277 of this Code.

2. A purchase and sale agreement is recognized as concluded with the condition of its execution by a strictly defined deadline, if it clearly follows from the agreement that if the deadline is violated, the buyer loses interest in the execution of the agreement.

The seller has no right to fulfill such an agreement before or after the expiration of the period specified therein without the consent of the buyer.

Legislative acts or an agreement may establish cases of execution of a purchase and sale agreement in parts (interim deadlines for the execution of the agreement).

Article 410. Moment of fulfillment of the seller’s obligation to transfer the goods

1. Unless otherwise provided by the purchase and sale agreement, the seller’s obligation to transfer the goods to the buyer is considered fulfilled at the moment:

1. delivery of the goods to the buyer or the person indicated by him, if the contract provides for the seller’s obligation to deliver the goods;

2) placing the goods at the disposal of the buyer, if the goods must be transferred to the buyer or a person indicated by him at the location of the goods.

The goods are considered to be placed at the disposal of the buyer when, by the time specified in the contract, the goods are ready for transfer in the appropriate place and the buyer, in accordance with the terms of the contract, is aware of the readiness of the goods for transfer. Goods are not considered ready for transfer if they are not identified for the purposes of the contract by marking or otherwise.

2. In cases where the seller’s obligation to deliver the goods or transfer the goods at its location to the buyer does not arise from the purchase and sale agreement, the seller’s obligation to transfer the goods to the buyer is considered fulfilled at the moment of delivery of the goods to the carrier or organization of communication for delivery to the buyer, unless otherwise provided by the agreement.

Article 411. Transfer of risk of accidental loss of goods

1. Unless otherwise provided by the purchase and sale agreement, the risk of accidental loss or accidental damage to the goods passes to the buyer from the moment when, in accordance with legislative acts or the contract, the seller is considered to have fulfilled his obligation to transfer the goods to the buyer.

2. The risk of accidental loss or accidental damage to goods sold while in transit passes to the buyer from the moment the purchase and sale agreement is concluded, unless otherwise provided by the agreement or business customs.

The condition of the contract that the risk of accidental loss or accidental damage to the goods passes to the buyer from the moment the goods are handed over to the first carrier may, at the buyer’s request, be declared invalid by the court if at the time of concluding the contract the seller knew or should have known that the goods were lost or damaged and did not inform the buyer about it.

Article 412. Obligation of the seller to preserve the goods sold

When the right of ownership, the right of economic management or operational management is transferred to the buyer before the transfer of the goods, the seller is obliged to preserve the goods until the transfer, preventing its deterioration.

The buyer is obliged to reimburse the seller for the costs necessary for this, unless otherwise provided by agreement of the parties.

Article 413. Obligation of the seller to transfer the goods free from the rights of third parties

1. The seller is obliged to transfer the goods to the buyer free from any rights of third parties, except for the case when the buyer agreed to accept the goods encumbered by the rights of third parties.

Failure of the seller to fulfill this obligation gives the buyer the right to demand a reduction in the price of the goods or termination of the contract and compensation for losses, unless it is proven that the buyer knew or should have known about the rights of third parties to these goods.

2. The rules provided for in paragraph 1 of this article are correspondingly applied in the case where, at the time of its transfer to the buyer, there were claims of third parties in relation to the goods, of which the seller was aware, if these claims were subsequently recognized as legitimate in the prescribed manner.

Article 414. Responsibility of the seller in the event of seizure of goods from the buyer

1. When goods are withdrawn from the buyer by third parties on grounds that arose before the execution of the contract, the seller is obliged to compensate the buyer for losses incurred by him, unless he proves that the buyer knew or should have known about the existence of these grounds.

2. The agreement of the parties to release the seller from liability or limit liability in the event of a demand for the purchased goods from the buyer by third parties is void.

Article 415. Obligations of the buyer and seller in the event of a claim for seizure of goods

1. If a third party, on grounds that arose before the execution of the contract, brings a claim against the buyer for the seizure of goods, the buyer is obliged to involve the seller in participating in the case, and the seller is obliged to enter into this case on the buyer’s side.

2. Failure of the buyer to involve the seller in the case releases the seller from liability to the buyer if the seller proves that by taking part in the case, he could have prevented the seizure of the sold goods from the buyer.

3. A seller who was invited by the buyer to participate in the case, but did not take part in it, is deprived of the right to prove that the buyer was conducting the business incorrectly.

Article 416. Consequences of failure to fulfill the obligation to transfer goods

1. If the seller refuses to transfer the sold goods to the buyer, the buyer has the right to refuse to execute the sales contract.

2. If the seller refuses to transfer an individually defined item, the buyer has the right to present to the seller the requirements provided for in Article 355 of this Code.

Article 417. Consequences of failure to fulfill the obligation to transfer accessories and documents related to the goods

1. If the seller does not transfer or refuses to transfer to the buyer accessories or documents related to the goods that he must transfer (clause 2 of Article 408 of this Code), the buyer has the right to assign him a reasonable period for their transfer.

2. If the accessories or documents related to the goods are not transferred by the seller within the specified period, the buyer has the right to refuse to accept the goods, unless otherwise provided by the contract.

Article 418. Quantity of goods

The quantity of goods to be transferred to the buyer is stipulated by the contract in the appropriate units of measurement or in monetary terms. The condition on the quantity of goods can be agreed upon by establishing in the contract the procedure for determining it.

Article 419. Consequences of violation of the terms of the contract on the quantity of goods

1. If the seller, in violation of the terms of the contract, transferred to the buyer a smaller quantity of goods than determined by the contract, the buyer has the right, unless otherwise provided by the contract, either to demand the transfer of the missing quantity of goods, or to refuse the transferred goods and payment for it, and if it is paid, to demand the return of the amount of money paid for it.

2. In the event that the seller has transferred goods to the buyer in a quantity exceeding that specified in the contract, the buyer is obliged to notify the seller about this in the manner prescribed by paragraph 1 of Article 436 of this Code. If, within a reasonable time after receiving the buyer’s message, the seller does not dispose of the relevant goods, the buyer has the right, unless otherwise provided by the contract, to accept all the goods.

3. If the buyer accepts goods in quantities exceeding those specified in the contract, the corresponding goods are paid at the price determined for the goods accepted in accordance with the contract, unless a different price is determined by agreement of the parties.

Article 420. Assortment of goods

If, under a purchase and sale agreement, goods are subject to transfer in a certain ratio by type, model, size, color and other characteristics (assortment), the seller is obliged to transfer to the buyer the goods in the assortment agreed upon by the parties.

Article 421. Consequences of violation of the terms of the agreement on the assortment of goods

1. When the seller transfers goods stipulated by the contract in an assortment that does not comply with the contract, the buyer has the right to refuse to accept and pay for them, and if they have already been paid, to demand the return of the paid amount.

2. If the seller has transferred to the buyer, along with goods whose assortment complies with the contract, goods in violation of the terms of the agreement on the assortment, the buyer has the right, at his choice:

1. accept goods that comply with the terms of the assortment agreement and refuse the remaining goods;

2) refuse all transferred goods;

3) demand the replacement of goods that do not comply with the terms of the assortment agreement with goods in the assortment provided for by the agreement;

4) accept all transferred goods.

3. When refusing goods whose assortment does not comply with the terms of the contract, or submitting a demand for replacement of goods that do not comply with the terms of the assortment agreement, the buyer also has the right to refuse to pay for these goods, and if they have already been paid, to demand a refund of the amount paid.

4. Goods that do not comply with the terms of the assortment agreement are considered accepted if the buyer does not notify the seller of his refusal of the goods within fifteen days after receiving them.

5. If the buyer does not refuse goods, the range of which does not correspond to the contract, he is obliged to pay for them at the price agreed with the seller. If the seller does not take the necessary measures to agree on a price within fifteen days, the buyer pays for the goods at the price that, at the time of conclusion of the contract, under comparable circumstances, was usually charged for similar goods.

6. The rules of this article apply unless otherwise provided by the purchase and sale agreement.

Article 422. Quality of goods

1. The seller is obliged to transfer to the buyer goods whose quality complies with the contract.

2. If there are no conditions in the contract regarding the quality of the goods, the seller is obliged to transfer to the buyer goods suitable for the purposes for which goods of this kind are usually used.

If the seller, at the conclusion of the contract, was informed by the buyer about the specific purposes of purchasing the goods, the seller is obliged to transfer to the buyer the goods suitable for use in accordance with these purposes.

3. When selling goods according to a sample and (or) description, the seller is obliged to transfer to the buyer the goods that correspond to the sample and (or) description.

4. If, in accordance with the procedure established by legislative acts, mandatory requirements for the quality of the goods sold are provided, then the seller carrying out business activities is obliged to transfer to the buyer goods that meet these mandatory requirements.

By agreement between the seller and the buyer, goods may be transferred that meet increased quality requirements compared to the mandatory requirements established in the manner prescribed by legislative acts.

5. The goods that the seller is obliged to transfer to the buyer must comply with the requirements provided for in this article at the time of their transfer to the buyer, unless another moment for determining the goods’ compliance with these requirements is provided for by the contract, and within a reasonable period must be suitable for the purposes for which goods of this kind are usually used.

Article 423. Shelf life of goods

1. Legislation, mandatory requirements of national standards or other mandatory rules may determine the period of time after which the product is considered unsuitable for its intended use (expiration date), as well as cases when the expiration date of the product is indicated on the product.

2. The seller must transfer goods for which an expiration date has been established to the buyer in such a way that they can be used for their intended purpose before the expiration date.

Article 424. Calculation of the shelf life of goods

The shelf life of a product is determined by the period of time, calculated from the date of its manufacture, during which the product is suitable for use, or the date before which the product is suitable for use.

Article 425. Guarantee of quality of goods

1. If the contract provides for the seller to provide a guarantee of the quality of the goods, the seller is obliged to transfer to the buyer the goods, which must meet the requirements provided for in Article 422 of this Code, within a certain period of time established by the contract (warranty period).

2. The quality guarantee of the product also applies to all its constituent parts (components), unless otherwise provided by the contract.

Article 426. Procedure for calculating the warranty period

1. The warranty period begins to be calculated from the moment the goods are transferred to the buyer (Article 410 of this Code), unless otherwise provided by the contract.

2. If the buyer is deprived of the opportunity to use the goods in respect of which the warranty period is established by the contract, due to circumstances depending on the seller, the warranty period does not run until the relevant circumstances are eliminated by the seller.

Unless otherwise provided by the contract, the warranty period is extended by the time during which the product could not be used due to defects discovered in it, provided that the seller is notified of the defects of the product in the manner established by Article 436 of this Code.

3. Unless otherwise provided by the contract, the warranty period for the component product is considered equal to the warranty period for the main product and begins to run simultaneously with the warranty period for the main product.

4. When replacing a product (component), the warranty period begins to run again, unless otherwise provided by the contract.

Article 427. Checking the quality of goods

1. If legislation or a contract provides for checking the quality of goods, it must be carried out in accordance with the requirements established therein.

In cases where national standards and other regulatory documents on standardization establish mandatory requirements for checking the quality of goods, quality checking must be carried out in accordance with the instructions contained therein.

2. If, in the manner established by paragraph 1 of this article, the conditions for checking the quality of goods are not provided, then the quality check of the goods must be carried out in accordance with business customs or other usually applied conditions for checking the goods to be transferred under the contract.

3. If legislative acts, mandatory requirements of national standards, other normative documents on standardization or an agreement provide for the seller’s obligation to check the quality of the goods transferred to the buyer (testing, analysis, inspection, etc.), the seller must provide the buyer, at his request, with evidence of checking the quality of the goods.

Article 428. Consequences of transfer of goods of inadequate quality

1. If the defects of the goods were not specified by the seller, the buyer to whom the goods of inadequate quality were transferred has the right, at his choice, to demand from the seller:

1. a proportionate reduction in the purchase price;

2) free elimination of defects in the goods within a reasonable time;

3) reimbursement of their expenses for eliminating defects in the goods;

4) replacing goods of inadequate quality with goods that comply with the contract;

5) refusal to fulfill the contract and return the amount of money paid for the goods.

The terms of the agreement on the buyer’s waiver of the rights provided for in part one of this paragraph are void.

2. In case of inadequate quality of part of the goods included in the set (Article 432 of this Code), the buyer has the right to exercise the rights provided for in paragraph 1 of this article in relation to this part of the goods.

3. In the event that the seller of a product of inadequate quality is not its manufacturer, demands for replacement or gratuitous elimination of defects in the product may be submitted, at the buyer’s choice, to the seller or to the manufacturer.

4. The rules provided for in this article apply unless otherwise established by this Code or other legislative acts.

Article 429. Defects in goods for which the seller is responsible

1. The seller is responsible for defects in the goods if the buyer proves that they arose before its transfer to the buyer or for reasons that arose before that moment.

The seller is responsible for the defects of the goods sold even when he was not aware of them. An agreement to release the seller from liability or limit it is void.

2. In relation to goods for which the seller has provided a quality guarantee, the seller is responsible for defects in the goods unless he proves that the defects in the goods arose after they were transferred to the buyer as a result of the buyer’s violation of the rules for using the goods or storing them, or the actions of third parties or force majeure.

Article 430. Time limits for discovering defects in transferred goods

1. Unless otherwise provided by legislative acts or contract, the buyer has the right to make claims related to defects in the goods, provided that they are discovered within the time limits established by this article.

2. If a warranty period or expiration date is not established for the product, claims related to defects in the product may be presented by the buyer, provided that the defects in the sold product were discovered within a reasonable time, but within two years from the date of transfer of the product to the buyer, unless longer periods are established by legislative acts or contract. The period for identifying defects in goods to be transported or sent by mail is calculated from the date of receipt of the goods at their destination.

3. If a warranty period has been established for the product, the buyer has the right to make claims related to defects in the product if defects in the product are discovered during the warranty period.

If the contract specifies a warranty period for components that is shorter than that for the main product, the buyer has the right to make claims about defects in the component product if they are discovered during the warranty period for the main product.

If the contract establishes a warranty period for a component product that is longer than the warranty period for the main product, the buyer has the right to make claims for defects in the product if defects in the component product are discovered during the warranty period for it, regardless of the expiration of the warranty period for the main product.

4. In relation to goods for which an expiration date has been established, the buyer has the right to make claims about defects in the goods if they are discovered during the expiration date of the goods.

5. In cases where the warranty period provided for in the contract is less than two years and defects in the goods are discovered by the buyer after the expiration of the warranty period, but within two years from the date of transfer of the goods to the buyer, the seller is liable if the buyer proves that the defects in the goods arose before the transfer of the goods to the buyer or for reasons that arose before that moment.

Article 431. Completeness of goods

1. The seller is obliged to transfer the goods to the buyer in a complete set that complies with the terms of the contract.

2. If the contract does not specify the completeness of the goods, the seller is obliged to transfer to the buyer the goods, the completeness of which is determined by business customs or other usually imposed requirements.

Article 432. Set of goods

1. If the contract provides for the seller’s obligation to transfer to the buyer a certain set of goods in a set (set of goods), the obligation is considered fulfilled from the moment of transfer of all goods included in the set.

2. Unless otherwise provided by the contract and does not follow from the essence of the obligation, the seller is obliged to transfer to the buyer all the goods included in the set at the same time.

Article 433. Consequences of transfer of incomplete goods

1. In case of transfer of incomplete goods (Article 431 of this Code), the buyer has the right, at his own discretion, to demand from the seller:

1. a proportionate reduction in the purchase price;

2) replenishment of goods within a reasonable time;

3) replacing an incomplete product with a complete one;

4) refusal to fulfill the contract and return the amount of money paid for the goods.

2. The consequences provided for in paragraph 1 of this article also apply in the event of a violation by the seller of the obligation to transfer a set of goods to the buyer (Article 432 of this Code), unless otherwise provided by law or the contract or follows from the essence of the obligation.

Article 434. Container and packaging of goods

1. Unless otherwise provided by the contract and does not follow from the essence of the obligation or the nature of the goods, the seller is obliged to transfer the goods to the buyer in containers and (or) packaging.

2. If the contract does not define the requirements for containers and packaging, then the goods must be packaged and (or) packaged in the usual way for such goods, and in the absence of such, in a way that ensures the safety of goods of this kind under normal conditions of storage and transportation.

3. If the procedure established by law provides for mandatory requirements for containers and (or) packaging, then the seller engaged in business activities is obliged to transfer the goods to the buyer in containers and (or) packaging that meet such mandatory requirements.

Article 435. Consequences of transferring goods without containers and (or) packaging or in improper containers and (or) packaging

1. In the event that a product subject to packaging and (or) packaging is transferred to the buyer without containers and (or) packaging or in improper containers and (or) packaging, the buyer has the right to require the seller to package and (or) package the goods or replace the improper containers and (or) packaging, unless otherwise follows from the contract, the essence of the obligation or the nature of the goods.

2. Instead of presenting to the seller the requirements specified in paragraph 1 of this article, the buyer has the right to present other demands to him arising from the transfer of goods of inadequate quality (Article 428 of this Code).

Article 436. Notification of the seller about improper performance of the contract

1. The buyer is obliged to notify the seller of a violation of the terms of the contract on the quantity, assortment, quality, completeness, container and (or) packaging of goods within the period provided for by legislative acts, other regulatory legal acts or the contract, and if a period is not established, within a reasonable time after the violation of the relevant term of the contract should have been discovered, based on the nature and purpose of the goods.

2. If the buyer fails to fulfill the obligation provided for in paragraph 1 of this article, the seller has the right to fully or partially refuse to satisfy the relevant requirements of the buyer if he proves that such untimely notification resulted in the impossibility of satisfying the buyer’s requirements or entails disproportionate expenses for the seller compared to those that he would have incurred if he had been notified in a timely manner of the violation of the terms of the contract.

3. If the seller knew or should have known that the goods transferred to the buyer do not comply with the terms of the contract, he does not have the right to refer to the buyer’s failure to fulfill the obligation provided for in paragraph 1 of this article.

Article 437. Obligation of the buyer to accept the goods

1. The buyer is obliged to accept the goods transferred to him by the seller, except for cases when, in accordance with the rules of this chapter, he has the right to demand replacement of the goods or refuse to fulfill the contract.

2. Unless otherwise provided by legislative acts or contract, the buyer is obliged to take actions that, in accordance with the usually presented requirements, are necessary on his part to ensure the transfer and receipt of the relevant goods.

3. In cases where the buyer, in violation of legislative acts or the contract, does not accept or refuses to accept the goods, the seller has the right to demand that the buyer accept the goods or refuse to fulfill the contract.

Article 438. Price of goods

1. The buyer is obliged to pay for the goods at the price stipulated by the contract, or, if it is not provided for by the contract and cannot be determined based on its terms, at a price determined in accordance with the rules of Article 385 of this Code, and also to perform at his own expense actions that, in accordance with legislative acts, the contract or usually imposed requirements, are necessary to make the payment.

2. When the price is set depending on the weight of the goods, it is determined by net weight, unless otherwise provided by the contract.

3. If the contract provides that the price of a product is subject to change depending on the indicators that determine the price of the product (cost, expenses, etc.), but the method for revising the price is not determined, the price is determined based on the ratio of indicators at the time of concluding the contract and at the time of fulfillment of the obligation to transfer the goods. If the seller is late in fulfilling the obligation to transfer the goods, the price is determined based on the ratio of indicators at the time of concluding the contract and on the day of transfer of the goods provided for by the contract, and if such a day is not provided for by the contract - on the day determined in accordance with Article 277 of this Code.

The rules provided for in this paragraph are applied unless otherwise established by this Code, other legislative acts or does not follow from the essence of the obligation.

Article 439. Payment for goods

1. If the terms of the contract and legislative acts do not imply an obligation to pay the price within a certain period of time, the buyer is obliged to pay it without delay, after the goods or documents of title to these goods are transferred to him.

2. If the contract does not provide for installment payment for the transferred goods, the buyer is obliged to pay the seller an amount equal to the full price of the transferred goods.

3. If the buyer does not pay for the goods transferred in accordance with the contract, the seller has the right to demand payment for the goods and payment of a penalty for using someone else’s money (Article 353 of this Code).

4. If the buyer, in violation of the contract, refuses to accept and pay for the goods, the seller has the right, at his choice, to demand payment for the goods or refuse to fulfill the contract.

5. In cases where the seller, in accordance with the contract, is obliged to transfer to the buyer other goods, in addition to unpaid ones, he has the right to suspend the transfer of these goods until full payment of all previously transferred goods, unless otherwise provided by legislative acts or the contract.

Article 440. Advance payment for goods

1. In cases where the contract provides for the buyer’s obligation to pay the price in full or in part before the seller transfers the goods (advance payment), the buyer must make payment within the period specified by the contract, and if the period is not provided for by the contract, within the period determined in accordance with Article 277 of this Code.

2. If the buyer fails to fulfill the contractual obligation to prepay for the goods, the rules provided for in Article 284 of this Code are applied.

3. In cases where the seller, who has received the advance payment amount, does not fulfill his obligations to transfer the goods within the established period (Article 409 of this Code), the buyer has the right to demand the transfer of the paid goods or the return of the advance payment amount for the goods not transferred by the seller.

4. In the event that the seller does not fulfill the obligation to transfer the pre-paid goods and is not otherwise provided for in the purchase and sale agreement, a penalty is payable for the amount of the pre-payment in accordance with Article 353 of this Code from the day when, according to the contract, the transfer of the goods should have been made until the day the goods are transferred to the buyer or the amount pre-paid by him is returned to him. The contract may provide for the seller's obligation to pay a penalty in the amount of the advance payment from the date of receipt of this amount.

Article 441. Payment for goods sold on credit

1. In cases where the contract provides for payment for the goods a certain time after its transfer to the buyer (sale of goods on credit), the buyer must make payment within the period stipulated by the contract, and if the period is not provided for by the contract, within the period determined in accordance with Article 277 of this Code.

2. If the seller fails to fulfill the obligation to transfer the goods, the rules provided for in Article 284 of this Code are applied.

3. In cases where the buyer, who has received the goods, does not fulfill the obligation to pay for them within the period established by the contract, the seller has the right to demand payment for the transferred goods or the return of unpaid goods.

In cases where the buyer does not fulfill the obligation to pay for the transferred goods within the period established by the contract and is not otherwise provided for by this Code and the contract, a penalty for the overdue amount is subject to payment in accordance with Article 353 of this Code from the day when the goods should have been paid until the day the buyer pays for the goods.

4. The contract may provide for the buyer’s obligation to pay a penalty in an amount corresponding to the price of the goods, starting from the day the goods are transferred by the seller.

5. Goods are sold on credit at the price valid on the day of sale. A subsequent change in the price of goods sold on credit does not entail recalculation, unless otherwise provided by legislative acts or agreement.

Article 442. Installment payment when selling goods on credit

1. An agreement on the sale of goods on credit may provide for payment by installments.

An agreement for the sale of goods on credit with the condition of payment in installments is considered concluded if, along with other essential terms of the purchase and sale agreement, it specifies the price, procedure, terms and amounts of payments.

2. When the buyer does not make the next payment for goods sold in installments within the period established by the contract, the seller, unless otherwise provided by the contract, has the right to refuse to fulfill the contract and demand the return of the sold goods, except for cases where the amount of payments received from the buyer exceeds half the price of the goods.

Article 443. Insurance of goods

1. A purchase and sale agreement may provide for the obligation of the seller or buyer to insure the goods, unless otherwise established by legislative acts.

2. In cases where the party obligated to insure the goods does not provide insurance in accordance with the terms of the contract, the other party has the right to insure the goods and demand reimbursement of insurance costs from the obligated party or refuse to fulfill the contract.

Article 444. Retention of ownership of goods by the seller

1. In cases where the contract stipulates that the ownership of the goods transferred to the buyer is retained by the seller until payment for the goods or the occurrence of other circumstances, the buyer does not have the right, before the transfer of ownership rights to him, to alienate the goods or dispose of them in any other way, unless otherwise provided by legislative acts or the contract or does not follow from the purpose and properties of the goods.

2. In cases where, within the period stipulated by the contract, the transferred goods are not paid for or other circumstances do not occur in which the ownership right passes to the buyer, the seller has the right to demand that the buyer return the goods to him, unless otherwise provided by the contract.

Paragraph 2. Retail purchase and sale

Article 445. Retail purchase and sale agreement

Under a retail purchase and sale agreement, the seller, engaged in business activities of selling goods, undertakes to transfer to the buyer goods usually intended for personal, family, household or other use not related to business activities.

The retail purchase and sale agreement is public (Article 387 of this Code).

Article 446. Form of a retail purchase and sale agreement

A retail purchase and sale agreement is considered concluded in the proper form from the moment the seller issues to the buyer a cash receipt or sales receipt or other document confirming payment for the goods, unless otherwise established by legislative acts or the retail purchase and sale agreement, including the terms of the forms or other standard forms to which the buyer subscribes (Article 389 of this Code). The buyer's absence of these documents does not deprive him of the opportunity to refer to witness testimony in support of the conclusion of the contract and its terms.

Article 447. Public offer of goods

1. The display of goods, demonstration of their samples or presentation of information about the goods being sold (descriptions, catalogs, photographs, etc.) at the place of their sale is recognized as a public offer, regardless of whether the price and other essential terms of the sales contract are indicated, except in cases where the seller has clearly determined that the relevant goods are not intended for sale.

2. The offer of a product indicated in its advertising, catalogs, as well as other descriptions of the product, addressed to an indefinite circle of persons not at the place of sale of the product, and not containing the essential terms of the purchase and sale agreement, is not recognized as a public offer.

Article 448. Providing information about the product to the buyer

1. The seller is obliged to provide the buyer with the necessary and reliable information about the product offered for sale. This information must comply with the requirements established by legislative acts and the requirements generally imposed in retail trade on the content and methods of presenting such information.

2. The buyer has the right, before concluding a contract, to inspect the goods, demand that in his presence an inspection of the properties or demonstration of the use of the goods, unless this is excluded due to the nature of the goods and does not contradict the rules adopted in retail trade.

3. The seller, who did not provide the buyer with the opportunity to obtain relevant information about the product, is also responsible for those defects of the product that arose after its transfer to the buyer, in respect of which the buyer proves that they arose due to his lack of information.

Article 449. Agreement with the condition that the buyer accepts the goods within a certain period of time

1. The parties may enter into an agreement with the condition that the buyer accepts the goods within a period specified in the agreement, during which the goods cannot be sold to another buyer.

2. Unless otherwise provided by the contract, the buyer’s failure to appear or failure to take other necessary actions to accept the goods within the period specified by the contract may be considered by the seller as the buyer’s refusal to fulfill the contract.

3. Additional expenses of the seller to ensure the transfer of goods to the buyer within the period specified in the contract are included in the price of the goods, unless otherwise provided by legislative acts or the contract.

Article 450. Sale of goods based on samples

1. A retail purchase and sale agreement may be concluded on the basis of the buyer familiarizing himself with a sample of the product (its description, product catalog, etc.) offered by the seller.

2. Unless otherwise provided by legislative acts or an agreement, the agreement is considered fulfilled from the moment of delivery of the goods to the place specified in the agreement, and if the place of transfer of the goods is not determined by the agreement, from the moment of delivery of the goods to the buyer at the place of residence of the citizen or the location of the legal entity.

3. Before transferring the goods, the buyer has the right to refuse to fulfill the contract, subject to compensation to the seller for reasonable expenses associated with taking actions to fulfill the contract.

Article 451. Sale of goods using machines

1. In cases where the sale of goods is carried out using machines, the owner of the machines is obliged to provide buyers with information about the product (name, quantity, price per unit of goods, etc.), the seller of the goods by placing on the machine or providing buyers in another way with information about the name (company name) of the seller, its location, operating hours, as well as the actions that the buyer needs to take to receive the goods.

2. The contract is considered concluded from the moment the buyer performs the actions necessary to receive the goods.

3. If the buyer is not provided with the paid goods, the seller is obliged to ensure the immediate provision of the goods to the buyer or the return of the amount of money paid by the buyer for this product.

Article 452. Agreement with the condition of delivery of goods to the buyer

1. In cases where an agreement is concluded with the condition of delivery of goods to the buyer, the seller is obliged to deliver the goods to the place specified by the buyer within the period established by the agreement.

2. The contract is considered fulfilled by the seller from the moment the goods are delivered to the buyer, and in his absence - to any person who presents a receipt or other document indicating the conclusion of the contract or the delivery of the goods, unless otherwise provided by legislative acts, the contract or follows from the essence of the obligation.

Article 453. Price and payment for goods

1. The buyer is obliged to pay for the goods at the price announced by the seller at the time of conclusion of the contract, unless otherwise provided by legislative acts or follows from the essence of the obligation.

2. In cases where the contract provides for advance payment for the goods (Article 440 of this Code), the buyer’s failure to pay for the goods within the period established by the contract is recognized as the buyer’s refusal to fulfill the contract, unless otherwise provided by agreement of the parties.

3. Agreements for the retail purchase and sale of goods on credit, including those with the condition that the buyer pays for the goods in installments, are not subject to application of the rules provided for in part two of paragraph 3 of Article 441 of this Code.

4. The buyer has the right to pay for the goods in full at any time, within the installment payment period for the goods established by the contract.

Article 454. Exchange of goods of proper quality

1. The buyer has the right, within fourteen days from the moment the non-food product is transferred to him, unless a longer period is announced by the seller, to exchange the purchased product at the place of purchase or other places announced by the seller for a similar product of a different size, shape, dimension, style, color, configuration, etc., making, in case of a difference in price, the necessary recalculation with the seller.

2. If the seller does not have the goods necessary for exchange, the buyer has the right to return the purchased goods to the seller and receive the amount of money paid for it.

3. The buyer’s request for an exchange or return of goods must be satisfied if the goods have not been used, their consumer properties are preserved and there is evidence of their purchase from this seller.

4. The list of goods that are not subject to exchange or return on the grounds specified in this article is determined in the manner established by law.

Article 455. Rights of the buyer in case of sale of goods of inadequate quality

1. A buyer to whom a product of inadequate quality has been sold, if its shortcomings have not been specified by the seller, has the right to carry out the actions provided for in paragraph 1 of Article 428 of this Code, while the buyer, at the request of the seller and at his expense, must return the received product of inadequate quality.

2. When returning to the buyer the amount of money paid for the goods, the seller does not have the right to deduct from it the amount by which the value of the goods has decreased due to full or partial use of the goods, loss of their marketable appearance, etc.

Article 456. Compensation for the difference in price when replacing goods, reducing the purchase price and returning goods of inadequate quality

1. When replacing goods of inadequate quality with goods of proper quality corresponding to the contract, the seller does not have the right to demand compensation for the difference between the price of the goods established by the contract and the price of the goods existing at the time the goods were replaced or the court made a decision to replace the goods.

2. When replacing a product of inadequate quality with a similar one, but different in size, style, grade, etc. goods of proper quality, the difference between the price of the replaced goods at the time of replacement and the price of the goods transferred in exchange for goods of inadequate quality is subject to compensation.

If the buyer's requirement is not satisfied by the seller, these prices are determined at the time the court makes a decision to replace the goods.

3. In the event of a demand for a proportionate reduction in the purchase price of a product, the price of the product at the time of presentation of the demand for a discount is taken into account, and if the buyer’s demand is not voluntarily satisfied, at the time the court makes a decision on a proportionate reduction in price.

4. When returning goods of inadequate quality to the seller, the buyer has the right to demand compensation for the difference between the price of the goods established by the contract and the price of the corresponding goods at the time of voluntary satisfaction of the buyer’s claim, and if the claim is not voluntarily satisfied, at the time of the court’s decision.

Article 457. Responsibility of the seller and fulfillment of obligations in kind

If the seller fails to fulfill an obligation under a retail purchase and sale agreement, compensation for losses and payment of a penalty do not relieve the seller from fulfilling the obligation in kind.

Paragraph 3. Delivery

Article 458. Supply contract

Under a supply agreement, the seller (supplier), who is an entrepreneur, undertakes to transfer, within a specified period or terms, the goods produced or purchased by him to the buyer for use in business activities or for other purposes not related to personal, family, household and other similar use.

Article 459. Settlement of disagreements when concluding a supply agreement

1. If, when concluding a supply contract, disagreements arose between the parties regarding certain terms of the contract, the party that proposed to conclude the contract and received from the other party a proposal to agree on these conditions must, within thirty days from the date of receipt of this proposal, unless another period is agreed upon by the parties, take measures to agree on the relevant terms of the contract or notify the other party in writing of its refusal to conclude it.

2. A party that received proposals for the relevant terms of the contract, but did not take measures to agree on the terms of the supply contract and did not notify the other party of the refusal to conclude the contract within the period provided for in paragraph 1 of this article, is obliged to compensate for losses caused by avoidance of agreeing on the terms of the contract.

Article 460. Duration of the supply contract

1. A supply contract may be concluded for one year, for a period of more than one year (long-term contract) or for another period provided for by agreement of the parties.

If the contract does not define its validity period and does not follow from the essence of the obligation, the contract is recognized as concluded for one year.

2. If in a long-term contract the quantity of goods to be supplied or other terms of the contract are determined for a year or a longer period, the contract must establish a procedure for the parties to agree on the relevant conditions for subsequent periods until the end of the contract. If there is no agreement procedure in the contract, the contract is recognized as concluded, respectively, for one year or for the period for which the terms of the contract are agreed upon.

Article 461. Delivery periods

1. If the parties provide for the delivery of goods during the term of the contract in separate batches and the delivery dates for individual batches (delivery periods) are not defined in it, then the goods must be supplied in equal monthly batches, unless otherwise follows from legislative acts, business customs or the essence of the obligation.

2. Along with defining delivery periods, the contract may establish a schedule for the delivery of goods (ten-day, daily, hourly, etc.).

3. Early delivery of goods can be made with the consent of the buyer.

4. Goods delivered ahead of schedule and accepted by the buyer are counted towards the quantity of goods to be delivered in the next period.

Article 462. Procedure for delivery of goods

1. Delivery of goods is carried out by the supplier by shipping (transferring) the goods to the buyer under the contract or to the person specified in the contract as the recipient.

2. In cases where the contract provides for the buyer’s right to give instructions to the supplier about the shipment of goods to recipients (shipping orders), the shipment (transfer) of goods is carried out by the supplier to the recipients specified in the shipping order.

3. The contents of the shipping order and the timing of its sending by the buyer to the supplier are determined by the contract. If the terms for sending the shipping order are not provided for in the contract, it must be sent to the supplier no later than thirty days before the delivery period.

4. Failure by the buyer to submit a shipping order within the prescribed period gives the supplier the right to refuse to fulfill the contract, unless otherwise provided by the contract.

Article 463. Delivery of goods

1. Delivery of goods is carried out by the supplier by shipping them by transport provided for by the contract, and on the terms determined by the contract.

2. If the contract does not specify what type of transport or under what conditions delivery is carried out, the right to choose the type of transport or determine the conditions for delivery of goods belongs to the supplier, unless otherwise follows from legislative acts, business customs or the essence of the obligation.

Article 464. Compensation for short-delivery of goods

1. A supplier who has allowed a short supply of goods in a separate delivery period is obliged to make up for the short-delivered quantity of goods in the next period (periods) within the validity period of the contract, unless otherwise provided by the contract.

2. Under a long-term contract, the quantity of goods under-delivered by the supplier in a separate delivery period is subject to replenishment in the next period (periods) within the year in which the short-delivery of goods was made, unless otherwise provided by the contract.

3. In the event that goods are shipped by the supplier to several recipients specified in the contract or in the buyer’s shipping order, goods delivered to one recipient in excess of the quantity provided for in the contract or shipping order are not counted toward covering shortfalls to other recipients and are subject to replenishment by the supplier, unless otherwise provided in the contract.

4. The buyer has the right, after notifying the supplier, to refuse to accept goods whose delivery is overdue, unless otherwise provided in the contract. The buyer is obliged to accept and pay for the goods delivered before the supplier receives the notification.

Article 465. Assortment of goods when making up for shortfalls

1. The range of goods, shortfalls of which are subject to replenishment, is determined by agreement of the parties. In the absence of an agreement, the supplier is obliged to make up for the underdelivered quantity of goods in the assortment established for the period in which the underdelivery occurred.

2. The supply of goods of one name in a larger quantity than provided for in the contract does not count toward the shortfall of goods of another name included in the same assortment, and is subject to replenishment, except in cases where the delivery is made with the prior written consent of the buyer.

Article 466. Acceptance of goods by the buyer

1. The buyer (recipient) is obliged to take all necessary actions to ensure acceptance of the goods delivered in accordance with the supply agreement.

2. The goods accepted by the buyer (recipient) must be inspected by him within the period determined by legislative acts, the supply agreement or business customs.

The buyer (recipient) is obliged, within the same period, to check the quantity and quality of the accepted goods in the manner established by legislative acts, agreements or business customs, and to immediately notify the supplier in writing of any identified inconsistencies or defects in the goods.

3. In case of receipt of the delivered goods from the transport organization, the buyer (recipient) is obliged to check the compliance of the goods with the information specified in the transport and accompanying documents, as well as to accept these goods from the transport organization in compliance with the rules provided for by laws and other regulatory legal acts regulating transport activities.

Article 467. Responsible storage of goods not accepted by the buyer

1. When the buyer (recipient), in accordance with legislative acts or the supply contract, refuses the goods transferred by the supplier, he is obliged to ensure the safety of this goods (secure storage) and immediately notify the supplier.

2. The supplier is obliged to remove the goods accepted by the buyer (recipient) for safekeeping or dispose of them within a reasonable time.

If the supplier does not dispose of the goods within this period, the buyer has the right to sell the goods or return them to the supplier.

3. Necessary expenses incurred by the buyer (recipient) in connection with the acceptance of the goods for safekeeping, the sale of the goods or their return to the seller are subject to reimbursement by the supplier.

In this case, the proceeds from the sale of goods are transferred to the supplier, minus the amount due to the buyer.

4. In cases where the buyer, without grounds established by legislative acts or contract, does not accept the goods from the supplier or refuses to accept them, the supplier has the right to demand payment for the goods from the buyer.

Article 468. Sampling of goods

1. The supply agreement may provide for the receipt of goods by the buyer (recipient) at the location of the supplier (selection of goods).

2. If the sampling period is not provided for by the contract, the sampling of goods by the buyer (recipient) must be carried out within a reasonable time after receiving the supplier’s notification of the readiness of the goods.

3. When the supply agreement provides for the selection of goods by the buyer (recipient) at the location of the supplier, the buyer is obliged to inspect the transferred goods at the place of their transfer, unless otherwise provided by legislative acts or follows from the essence of the obligation.

4. Failure by the buyer (recipient) to pick up the goods within the time period established by the supply contract, and in its absence - within a reasonable time after receiving the supplier’s notification about the readiness of the goods, gives the supplier the right to refuse to fulfill the contract or demand payment from the buyer for the goods.

Article 469. Payments for goods supplied

1. The buyer pays for the supplied goods in compliance with the procedure and form of payment stipulated by the contract. If the procedure and form of settlements are not determined by agreement of the parties, then settlements are carried out by payment orders.

2. If the contract provides for the delivery of goods in separate parts included in the kit, then payment for the goods by the buyer is made after shipment (selection) of the last part included in the kit, unless otherwise provided by the contract.

3. If the contract stipulates that payment for the goods is made by the recipient (payer) and the latter unreasonably refused payment or did not pay for the goods within the period established by the contract, the supplier has the right to demand payment for the delivered goods from the buyer.

Article 470. Containers and packaging

1. Unless otherwise provided by the contract, the buyer (recipient) is obliged to return to the supplier the reusable containers and packaging means in which the goods were received, in the manner and within the time limits established by legislative acts.

2. Other containers and packaging must be returned to the supplier only in cases stipulated by the contract.

Article 471. Consequences of delivery of goods of inadequate quality

1. The buyer (recipient), to whom goods of inadequate quality were delivered, has the right to present to the supplier the requirements provided for in Article 428 of this Code, with the exception of cases where the supplier, having received the buyer’s notification of the defects of the delivered goods, immediately replaces the delivered goods with goods of proper quality.

2. The buyer (recipient), who sells the goods supplied to him at retail, has the right to demand replacement within a reasonable time of goods of inadequate quality returned by the consumer, unless otherwise provided by the supply contract.

Article 472. Consequences of delivery of incomplete goods

1. The buyer (recipient) to whom goods were delivered in violation of the terms of the supply contract, the requirements of legislative acts or the usually required requirements for completeness, has the right to present to the supplier the requirements provided for in Article 433 of this Code, except for the case when the supplier, having received the buyer’s notification about the incompleteness of the delivered goods, will immediately complete the goods or replace them with complete goods.

2. The buyer (recipient) who sells goods at retail has the right to demand that incomplete goods returned by the consumer be replaced within a reasonable time with complete ones, unless otherwise provided by the delivery contract.

Article 473. Buyer’s rights in case of short delivery of goods, failure to comply with requirements to eliminate defects in goods or to replenish goods

1. If the supplier has not delivered the quantity of goods stipulated by the contract or has not complied with the buyer’s demands to replace goods of inadequate quality or to complete the goods within the established period, the buyer has the right to purchase the undelivered goods from other persons, with all necessary and reasonable expenses for their acquisition being charged to the supplier.

Calculation of the buyer's expenses for the purchase of goods from other persons, in the event of their short delivery by the supplier or failure to comply with the requirements to eliminate defects in goods or to complete the goods, is carried out according to the rules provided for in paragraph 1 of Article 477 of this Code.

2. The buyer (recipient) has the right to refuse to pay for goods of inadequate quality and incomplete goods, and if such goods have been paid for, to demand the return of the amounts paid until the defects are eliminated and the goods are completed or replaced.

Article 474. Penalty for short delivery of goods or delay in delivery of goods

A penalty established by legislative acts or an agreement for short delivery or late delivery of goods may be collected from the day specified by the agreement until the day of actual fulfillment of the obligation, unless a different procedure for collecting the penalty is established by legislative acts or the agreement.

Article 475. Repayment of homogeneous obligations under several supply contracts

1. In cases where the supply of goods of the same name is carried out by the supplier to the buyer simultaneously under several supply contracts and the quantity of goods supplied is not enough to pay off the supplier’s obligations under all contracts, the delivered goods must be counted towards the fulfillment of the contract specified by the supplier when making the delivery or without delay after delivery.

2. If the buyer has paid the supplier for goods of the same name received under several supply contracts, and the payment amount is not enough to pay off the buyer’s obligations under all contracts, the amount paid must be counted towards the fulfillment of the contract specified by the buyer when paying for the goods or without delay after payment.

3. If the supplier or buyer did not take advantage of the rights granted to them, respectively, by paragraphs 1 and 2 of this article, the fulfillment of the obligation shall be counted towards the repayment of obligations under the contract, the performance period of which came earlier. If the deadline for fulfilling obligations under several agreements has come at the same time, the provided fulfillment is counted proportionally towards the repayment of obligations under all agreements.

Article 476. Unilateral refusal to perform a contract

1. A unilateral refusal to fulfill a contract (in whole or in part) or a unilateral change is permitted in the event of a significant violation of the contract by one of the parties (part two of paragraph 2 of Article 401 of this Code).

2. A violation of the contract by the supplier is considered significant in the following cases:

1. delivery of goods of inadequate quality with defects that cannot be eliminated within a time acceptable to the buyer;

2) repeated violation of delivery deadlines.

3. A breach of contract by the buyer is assumed to be significant in the following cases:

1. repeated violation of payment terms for goods;

2) repeated non-selection of goods.

4. The agreement of the parties may provide for other grounds for unilateral refusal to fulfill the contract or unilateral change thereof.

5. The supply contract is considered terminated or changed from the moment a party receives a notification from the other party about a change or unilateral refusal to fulfill the contract, unless a different period for termination or change of the contract is provided for in the notification or is not determined by agreement of the parties.

Article 477. Calculation of losses upon termination of a contract

1. If, within a reasonable period after the termination of the contract, due to a violation of the obligation by the seller, the buyer bought goods instead of those provided for in the contract from another person at a higher but reasonable price, he may present to the seller a claim for compensation for losses in the form of the difference between the price established in the contract and the price for the transaction made in exchange.

2. If, within a reasonable period after termination of the contract, due to a violation of the obligation by the buyer, the seller sold the goods to another person at a price lower than that stipulated by the contract, but reasonable, the seller may present to the buyer a claim for compensation for losses in the form of the difference between the price established in the contract and the price of the transaction made in exchange.

3. If, after termination of the contract on the grounds provided for in paragraphs 1 and 2 of this article, a transaction has not been made to replace the terminated contract and there is a current price for this product, the party may make a claim for compensation for losses in the form of the difference between the price established in the contract and the current price at the time of termination of the contract.

The current price is the price usually charged under comparable circumstances for a similar product in the place where the transfer of the goods is to take place. If a current price does not exist at that location, the current price applicable elsewhere may be used and may serve as a reasonable substitute, taking into account differences in the cost of transporting the item.

4. Satisfaction of the requirements provided for in paragraphs 1-3 of this article does not relieve the party that has not fulfilled the obligation from compensation for other losses caused to the other party on the basis of paragraph 4 of Article 9 of this Code.

Paragraph 4. Contracting

Article 478. Contract agreement

1. Under a contracting agreement, the producer of agricultural products undertakes to transfer the agricultural products grown (produced) by him to the procurer - the person purchasing such products for processing or sale.

2. The rules on the supply contract (Articles 458-477 of this Code) apply to relations under a contractual agreement that are not regulated by the rules of this paragraph.

Article 479. Obligations of the procurer

1. Unless otherwise provided by the contracting agreement, the procurer is obliged to accept agricultural products from the manufacturer at their location and ensure export.

2. In the case when the acceptance of agricultural products is carried out at the location of the procurer or another place indicated by him, the procurer does not have the right to refuse to accept agricultural products that comply with the terms of the contract and transferred to the procurer within the period stipulated by the contract.

The manufacturer is obliged to ensure an accurate determination of product quality in accordance with the standards.

3. A contract may provide for the obligation of the procurer carrying out processing of agricultural products to return waste from the processing of agricultural products to the manufacturer upon his request with payment at the price determined by the contract.

Article 480. Obligations of the producer of agricultural products

The manufacturer of agricultural products is obliged to transfer to the procurer the grown (produced) agricultural products in the quantity, quality and assortment stipulated by the contracting agreement.

Article 481. Responsibility of the producer of agricultural products

A producer of agricultural products who fails to fulfill an obligation or improperly fulfills an obligation bears liability if he is at fault.

Paragraph 5. Energy supply

Article 482. Energy supply contract

1. Under an energy supply agreement, the energy supplying organization undertakes to supply energy to the subscriber (consumer) through the connected network, and the subscriber undertakes to pay for the received energy, as well as comply with the regime of its consumption stipulated by the agreement, ensure the safe operation of the energy networks under its control and the serviceability of the devices and equipment used by it related to energy consumption.

2. The energy supply agreement is public (Article 387 of this Code).

3. The terms of the energy supply contract, binding on the parties, are determined in accordance with this Code and other legislative acts.

Article 483. Conclusion and extension of an energy supply contract

1. An energy supply agreement is concluded by the energy supply organization with the subscriber if he has the necessary equipment connected to the networks of the energy transmission organization in the manner established by the legislation of the Republic of Kazakhstan.

2. The agreement is considered concluded from the moment of the first actual connection of the subscriber in the prescribed manner to the connected network.

Unless otherwise provided by agreement of the parties, such an agreement is considered concluded for an indefinite period and can be amended or terminated on the grounds provided for in Article 490 of this Code.

3. In the absence of an application from one of the parties to terminate or amend the energy supply contract at the end of the term, it is considered extended for the same period and on the same conditions as provided for in the contract. When extending the contract for a new term, its terms may be changed by agreement of the parties.

4. If one of the parties before the expiration of the contract makes a proposal to conclude a new contract, the relations of the parties are regulated by the previously concluded contract until the conclusion of a new contract.

Article 484. Amount of energy

1. The energy supplying organization is obliged to supply the subscriber with energy through the connected network in the quantity stipulated by the contract and in compliance with the supply regime agreed upon by the parties. The amount of energy supplied by the energy supply organization and received by the subscriber is determined in accordance with accounting data on its actual consumption.

2. The contract may provide for the right of the subscriber to change the amount of energy he receives, determined by the contract, subject to reimbursement of expenses incurred by the energy supply organization in connection with ensuring the supply of energy not in the quantity stipulated by the contract.

3. In cases where the subscriber under an energy supply contract is a citizen who uses energy for domestic consumption, he has the right to use energy in the quantity he needs. The amount of energy supplied by the energy supply organization and received by the subscriber is determined by the indicators of the metering devices, and in their absence or temporary violation - by calculation.

Article 485. Consequences of violation of the terms of the contract on the amount of energy

If the energy supplying organization supplies the subscriber through the connected network with a smaller amount of energy than stipulated by the contract, the rules provided for in Article 419 of this Code are applied, unless otherwise provided by legislative acts, the contract or follows from the essence of the obligation.

Article 486. Energy quality

1. The quality of energy supplied by the energy supplying organization must comply with the requirements established by national standards and other regulatory documents on standardization or stipulated by the contract.

2. In the event of a violation by an energy supplying organization of the requirements for energy quality, the rules provided for in Article 491 of this Code are applied, unless otherwise provided by legislative acts, an agreement or follows from the essence of the obligation.

Article 487. Obligations of the subscriber for the maintenance and operation of networks, devices and equipment

1. The subscriber is obliged to ensure the proper technical condition and safety of the operated energy networks, devices and equipment, comply with the established energy consumption regime, and also immediately notify the energy supplying organization about accidents, fires, malfunctions of energy metering devices and other violations that arise during the use of energy.

2. In cases where the subscriber under an energy supply contract is a citizen who uses energy for domestic consumption, the obligation to ensure the proper technical condition and safety of energy networks, as well as energy consumption metering devices, rests with the energy supply organization, unless otherwise established by legislative acts.

3. Requirements for the technical condition and operation of energy networks, devices and equipment are determined by law.

4. The subscriber is obliged to allow employees of energy supply organizations to access devices to monitor the technical condition and safety of operated energy networks, devices and equipment. The procedure for monitoring their compliance is determined by law.

Article 488. Payment for energy

1. Payment for energy is made for the amount of energy actually accepted by the subscriber, determined in accordance with the indicators of metering devices, and in their absence or temporary violation - by calculation, with the exception of cases of using an automated commercial energy metering system.

2. The procedure for payments for energy is determined by law or agreement of the parties.

Article 489. Transfer of energy by a subscriber to another person

1. The subscriber may transfer the energy he received from the energy supplying organization through the connected network to another person (subsubscriber) only with the consent of the energy supplying organization.

2. The rules of this paragraph apply to the contract for the transfer of energy by a subscriber to a sub-subscriber, unless otherwise provided by legislative acts or the contract.

3. When transferring energy to a sub-subscriber, the subscriber remains responsible to the energy supplying organization, unless otherwise established by legislative acts.

Article 490. Amendment and termination of the contract

1. An interruption in the supply, cessation or limitation of the supply of energy is allowed by agreement of the parties, with the exception of cases where the unsatisfactory condition of the subscriber’s power installations, certified by the state energy supervision body, threatens an accident or poses a threat to the life and safety of citizens. The energy supplying organization must notify the subscriber in advance of an interruption in the supply, cessation or limitation of energy supply.

2. An interruption in the supply, cessation or limitation of the supply of energy without the consent of the subscriber and without warning him, but with his immediate notification, is allowed if it is necessary to take urgent measures to prevent or eliminate an accident in the system of the energy supplying organization.

3. Interruption in the supply, cessation or limitation of energy supply for continuous cycle industries is not permitted and is regulated by law.

4. In cases where the subscriber under an energy supply agreement is a citizen who uses energy for domestic consumption, he has the right to unilaterally refuse the agreement, subject to notification of this to the energy supply organization and full payment for the energy used.

5. In cases where the subscriber under an energy supply contract is a citizen who uses energy for domestic consumption, the energy supply organization has the right to unilaterally suspend the execution of the contract due to the subscriber’s failure to pay for the energy used, provided that the subscriber is notified no later than a month before the suspension of the contract.

Article 491. Liability under an energy supply contract

1. In cases of non-fulfillment or improper fulfillment of obligations under an energy supply contract, the energy supplying organization and the subscriber are obliged to compensate for the real damage caused by this (clause 4 of Article 9 of this Code).

2. If, as a result of regulation of energy consumption, carried out on the basis of legislation, there is a break in the supply of energy to the subscriber, the energy supplying organization is responsible for non-fulfillment or improper fulfillment of contractual obligations if it is at fault.

Article 492. Application of the rules of the energy supply agreement to other supply relations through the connected network

1. The rules of this paragraph apply to relations for the supply of thermal energy through the connected network, unless otherwise established by law.

2. The rules of this paragraph apply to relations for the supply of gas, oil and oil products, water and other goods through the connected network, unless otherwise established by law, agreement or follows from the essence of the obligation.

Paragraph 6. Sale of the enterprise

Article 493. Contract for the sale of an enterprise

1. Under an agreement for the sale of an enterprise, the seller undertakes to transfer into ownership of the buyer the enterprise as a whole as a property complex (Article 119 of this Code), with the exception of the rights and obligations that the seller does not have the right to transfer to other persons.

2. Rights and obligations in relation to the employees of the enterprise are transferred from the seller to the buyer of the enterprise in the manner prescribed by the labor legislation of the Republic of Kazakhstan.

3. The rights to use the company name, trademarks, service marks and other means of individualization of the seller and his products, work or services performed by him, as well as the rights to use means of individualization belonging to the seller on the basis of a license are transferred to the buyer, unless otherwise provided by the contract.

4. Rights obtained on the basis of a special permit (license) to engage in the relevant activity are not subject to transfer to the buyer of the enterprise, unless otherwise established by legislative acts. The inclusion of obligations in the enterprise transferred under the contract, the fulfillment of which by the buyer is impossible in the absence of a special permit (license), does not relieve the seller from corresponding obligations to creditors. For failure to fulfill obligations, the seller and buyer are jointly and severally liable to creditors.

5. Features of the sale of a state enterprise, where the enterprise acts as a single property complex, are determined by the legislative act of the Republic of Kazakhstan on state property.

Article 494. Form of an agreement for the sale of an enterprise

Footnote: Footnote. The title of Article 494 is as amended by the Law of the Republic of Kazakhstan dated March 25, 2011 No. 421-IV (shall be brought into force after ten calendar days after its first official publication).

1. An agreement for the sale of an enterprise is concluded in writing by drawing up one document signed by the parties, with the obligatory attachment to it of the documents specified in paragraph 2 of Article 495 of this Code.

Article 495. Establishing the composition and assessing the value of an enterprise to be sold

1. The composition and cost of the enterprise to be sold are determined by agreement of the parties, unless otherwise established by legislative acts.

2. Before signing the agreement, the parties must draw up and review: an inventory report, a balance sheet, an audit report from an audit organization on the composition and value of the enterprise, as well as a list of all debts (liabilities) included in the enterprise, indicating the creditors, the nature, size and timing of their claims.

The property, rights and obligations specified in the named documents are subject to transfer by the seller to the buyer, unless otherwise follows from Article 493 of this Code and is not established by the contract.

Article 496. Rights of creditors upon sale of an enterprise

1. Creditors for obligations included in the enterprise being sold must be notified in writing by the seller of the sale of the enterprise before its transfer to the buyer.

2. A creditor who has not informed the seller in writing of his consent to the transfer of debt has the right, within three months from the date of receipt of the notification of the sale of the enterprise, to demand either termination or early fulfillment of the obligation and compensation by the seller for the losses caused by this, or recognition of the agreement for the sale of the enterprise as invalid in full or in the relevant part.

3. A creditor who was not notified of the sale of an enterprise in the manner provided for in paragraph 1 of this article may bring a claim to satisfy the requirements provided for in paragraph 2 of this article within a year from the day when he learned or should have learned about the transfer of the enterprise from the seller to the buyer.

4. After the transfer of the enterprise to the buyer, the seller and the buyer bear joint liability for the debts included in the transferred enterprise, which were transferred to the buyer without the consent of the creditor.

Article 497. Transfer of an enterprise

1. The transfer of an enterprise by the seller to the buyer is carried out according to a transfer act, which indicates data on the composition of the enterprise and on the notification of creditors about the sale of the enterprise, as well as information on identified shortcomings of the transferred property and a list of property, the obligation to transfer which is impossible due to its loss.

2. Preparing the enterprise for transfer, including drawing up and submitting the transfer act for signing, is the responsibility of the seller and is carried out at his expense, unless otherwise provided by the contract.

3. The enterprise is considered transferred to the buyer from the day the transfer deed is signed by both parties.

From this moment on, the risk of accidental loss or accidental damage to the property transferred as part of the enterprise passes to the buyer.

Article 498. Transfer of rights to an enterprise

Footnote: Footnote. The title of Article 498 is as amended by the Law of the Republic of Kazakhstan dated March 25, 2011 No. 421-IV (shall be brought into force after ten calendar days after its first official publication).

1. The right to property included in the enterprise, subject to state registration, passes to the buyer from the moment of registration. Rights to the remaining property are transferred from the moment the transfer deed is signed by both parties.

3. In cases where the contract provides for the seller to retain ownership of the enterprise transferred to the buyer until payment for the enterprise or until other circumstances occur, the buyer has the right, before the transfer of ownership rights to him, to dispose of the property and rights that are part of the transferred enterprise, to the extent necessary to ensure the activities of the enterprise as a property complex.

Article 499. Consequences of transfer and acceptance of an enterprise with defects

1. The consequences of the transfer by the seller and acceptance by the buyer under the transfer act of an enterprise, the composition of which does not correspond to that provided for in the contract, including with regard to the quality of the transferred property, are determined on the basis of the rules provided for in Articles 413-415, 419, 422, 428, 432 of this Code, unless otherwise follows from the contract and is not provided for in paragraphs 2-4 of this article.

2. In cases where an enterprise is transferred and accepted under a transfer deed, which contains information about the identified shortcomings of the enterprise and lost property (clause 1 of Article 497 of this Code), the buyer has the right to demand a corresponding reduction in the purchase price of the enterprise, unless the right to present other demands in such cases is provided for by the contract.

3. The buyer has the right to demand a reduction in the purchase price if debts (obligations) of the seller are transferred to him as part of an enterprise that were not specified in the agreement or transfer act, unless the seller proves that the buyer knew about the debts (obligations) at the time of concluding the agreement and transferring the enterprise.

4. The seller, in the event of receiving a notification from the buyer about the shortcomings of the property transferred as part of the enterprise, or about the absence of certain types of property to be transferred, must immediately replace the property of inadequate quality or provide the buyer with the missing property.

5. The buyer has the right, in a judicial proceeding, to demand termination or modification of the contract for the sale of an enterprise and the return of what has been fulfilled by the parties under the contract, if it is established that the enterprise, due to shortcomings for which the seller is responsible, is unsuitable for the purposes specified in the sales contract, and these shortcomings are not eliminated by the seller under the conditions, in the manner and within the time limits established in accordance with this Code, legislative acts or the contract, or elimination of the shortcomings is impossible.

Article 500. Application to a contract for the sale of an enterprise of the rules on the consequences of invalidity of transactions and on termination and amendment of the contract

The rules of this Code on the consequences of the invalidity of transactions and on the termination and amendment of a purchase and sale agreement, providing for the return or recovery in kind of what was received under the agreement from one or both parties, apply to the agreement for the sale of an enterprise, if such consequences do not significantly violate the rights and interests of the creditors of the seller and the buyer, other persons, protected by legislative acts, and do not contradict the public interests.

Paragraph 7. Repo operation

Footnote: Footnote Chapter 25 is supplemented by paragraph 7 in accordance with the Law of the Republic of Kazakhstan dated July 12, 2022 No. 138-VII (shall be enforced upon expiration of sixty calendar days after the day of its first official publication).

Article 500-1. The concept of a repo operation

A repo transaction is an agreement consisting of two parts, according to which:

1. one party (repo seller) undertakes, within the period established by the agreement, to transfer ownership of securities and (or) other financial instruments to the other party (repo buyer), and the repo buyer undertakes to accept these securities and (or) financial instruments and pay a certain amount of money for them (opening a repo);

2) the repo buyer undertakes, within the period established by the agreement, to transfer ownership of securities and (or) other financial instruments to the repo seller, and the repo seller undertakes to accept these securities and (or) financial instruments and pay a certain amount of money for them (closing the repo).

Article 500-2. Features of the repo operation

1. Unless otherwise provided by the agreement, securities and (or) other financial instruments that are the subject of opening a repo and closing a repo must be similar (of the same issue).

2. General provisions on purchase and sale apply to repo transactions, unless this contradicts the essence of repo transactions.

3. Features and (or) restrictions on the performance of repo transactions may be established by the Law of the Republic of Kazakhstan “On the Securities Market”.

Chapter 26. Mena

Article 501. Barter agreement

1. Under an exchange agreement, each party undertakes to transfer ownership, economic management, and operational management of the other party one product in exchange for another.

2. The rules on the purchase and sale agreement are applied to the exchange agreement accordingly, since this does not contradict the rules of this chapter and the essence of the exchange. In this case, each of the parties is recognized as the seller of the goods, which it undertakes to transfer, and the buyer of the goods, which it undertakes to accept in exchange.

3. The provisions provided for in this chapter apply to the exchange of rights (works, services), unless otherwise provided by legislative acts and does not follow from the essence of the relevant obligations.

Article 502. Prices and expenses under an exchange agreement

1. Unless otherwise follows from the contract, the goods to be exchanged are assumed to be of equal value, and the costs of their transfer and acceptance are borne in each case by the party that bears the corresponding obligations.

2. In cases where, in accordance with the contract, the goods exchanged are recognized as unequal, the party obligated to transfer the goods, the price of which is lower than the price of the goods provided in exchange, must pay the difference in prices immediately before or after fulfilling its obligation to transfer the goods, unless a different procedure is provided for by the contract.

Article 503. Fulfillment of mutual obligations to transfer goods under an exchange agreement

In cases where, in accordance with the contract, the terms for the transfer of the exchanged goods do not coincide, the rules on the fulfillment of mutual obligations (Article 284 of this Code) are applied to the fulfillment of obligations to transfer the goods by the party that must transfer the goods after the transfer of the goods by the other party.

Article 504. Transfer of ownership of goods exchanged

Unless otherwise provided by legislative acts or agreement, the ownership of the exchanged goods passes to the parties acting as buyers under the exchange agreement, simultaneously after fulfilling the obligations to transfer the corresponding goods to each of the parties.

Article 505. Liability for the seizure of goods acquired under an exchange agreement

The party from whom goods acquired under an exchange agreement are seized by third parties has the right, if there are grounds provided for in Article 414 of this Code, to demand from the other party the return of the goods received by the latter in exchange, and if it is impossible to receive the goods in kind - its value.

Chapter 27. Donation

Article 506. Donation agreement

1. Under a gift agreement, one party (the donor) gratuitously transfers or undertakes to transfer to the other party (the donee) an item of ownership or a property right (claim) to himself or a third party, or releases or undertakes to release it from a property obligation to a third party.

If there is a counter transfer of a thing or right or a counter obligation, the gift agreement is considered void. The rules provided for in paragraph 2 of Article 160 of this Code apply to such an agreement.

2. A promise to transfer a thing or property right to someone free of charge or to release someone from a property obligation (promise of donation) is recognized as a gift agreement and binds the promisee if the promise is made in the proper form (clause 2 of Article 508) and contains a clearly expressed intention to make a gratuitous transfer of a thing or right to a specific person in the future or to release him from a property obligation.

A promise to donate all of one’s property or part of one’s entire property without indicating a specific object of donation in the form of a thing, right or release from an obligation is void.

3. An agreement providing for the transfer of a gift to the donee after the death of the donor is void.

The rules of this Code on inheritance apply to this type of gift.

Article 507. Refusal of the donee to accept the gift

1. The recipient has the right to refuse it at any time before the gift is transferred to him. In this case, the gift agreement is considered terminated.

2. If the gift agreement is concluded in writing, the refusal of the gift must also be made in writing. If the gift agreement is registered, refusal to accept the gift is also subject to state registration.

3. If the gift agreement was concluded in writing, the donor has the right to demand from the donee compensation for real damage caused by refusal to accept the gift.

Article 508. Form of gift agreement

1. A donation accompanied by the transfer of a gift to the donee may be made orally, except for the cases provided for in paragraphs 2 and 3 of this article. The transfer of a gift is carried out through its delivery, symbolic transfer (delivery of keys, etc.) or delivery of title documents.

2. An agreement on donation of movable property must be made in writing in cases where:

1. the donor is a legal entity and the value of the gift exceeds ten monthly calculation indices;

2) the contract contains a promise of donation in the future.

In the cases provided for in this paragraph, a gift agreement made orally is void.

Article 509. Prohibition of donation

1. Donations are not allowed, with the exception of ordinary gifts, the value of which does not exceed ten monthly calculation indices established by legislative acts:

1. on behalf of minors and citizens recognized as incompetent, their legal representatives;

2) employees of medical, educational institutions, social protection institutions and other similar institutions, citizens receiving treatment, maintenance or education there, spouses and relatives of these citizens.

2. Giving gifts to civil servants and other persons who have accepted anti-corruption restrictions in accordance with the Law of the Republic of Kazakhstan “On Combating Corruption”, as well as to members of their families for the actions (inaction) of civil servants and other persons who have accepted anti-corruption restrictions, in favor of the donor, is not allowed, if such actions are within the official powers of these persons or these persons, by virtue of their official position, can contribute to such actions (inaction).

Article 510. Restrictions on donation

1. A legal entity to which a thing belongs under the right of economic management or operational management has the right to donate it with the consent of the owner, unless otherwise provided by legislative acts. This restriction does not apply to ordinary gifts, the value of which does not exceed ten monthly calculation indices established by legislative acts.

2. Donation of property that is in common joint ownership is permitted with the consent of all participants in joint ownership in compliance with the rules provided for in Article 220 of this Code.

3. The donation of the right of claim belonging to the donor to a third party is carried out in compliance with the rules provided for in Articles 339-343, 345, 346 of this Code.

4. Donation through the fulfillment of his obligations to a third party for the donee is carried out in compliance with the rules provided for in paragraph 1 of Article 276 of this Code.

A gift through the transfer by the donor of the donee's debt to a third party is carried out in compliance with the rules provided for in Article 348 of this Code.

5. A power of attorney for making a gift by a representative, in which the donee is not named and the subject of the gift is not indicated, is void.

Article 511. Refusal to execute a gift agreement

1. The donor has the right to refuse to fulfill an agreement containing a promise to transfer an item or right to the donee in the future, or a promise to release the donee from a property obligation, if after the conclusion of the agreement the property or marital status or health status of the donor has changed so much that the execution of the agreement in the new conditions will lead to a significant decrease in his standard of living.

2. The donor has the right to refuse to fulfill an agreement containing a promise to transfer an item or right to the donee in the future, or a promise to release the donee from a property obligation, on grounds that give him the right to cancel the donation (clause 1 of Article 512 of this Code).

3. The donor’s refusal to execute the gift agreement on the grounds provided for in paragraphs 1 and 2 of this article does not give the donee the right to demand compensation for losses.

Article 512. Cancellation of donation

1. The donor has the right to cancel the donation if the donee has made an attempt on his life, the life of one of his family members or close relatives, or has intentionally caused bodily harm to the donor.

In case of intentional deprivation of life of the donor by the donee, the right to demand in court the cancellation of the donation belongs to the heirs of the donor.

2. The donor has the right to demand in court the cancellation of the donation if the recipient’s handling of the donated item, which represents great non-property value for the donor, creates a threat of its irretrievable loss.

3. At the request of an interested person, the court may cancel a donation made by an individual entrepreneur or a legal entity in violation of the provisions of the Law of the Republic of Kazakhstan “On Rehabilitation and Bankruptcy” at the expense of funds associated with his business activities during the year preceding the initiation of bankruptcy and (or) rehabilitation proceedings against him.

4. The gift agreement may stipulate the right of the donor to cancel the gift if he survives the donee.

5. In case of cancellation of the donation, the donee is obliged to return the donated item if it was preserved in kind at the time of receipt of the notice of cancellation of the donation, or to reimburse its value at market prices in the event of its alienation after receipt of the notice of cancellation of the donation.

Article 513. Cases in which refusal to execute a gift agreement and cancellation of a gift are impossible

The rules on refusal to execute a gift agreement (Article 511 of this Code) and on the cancellation of a donation (Article 512 of this Code) do not apply to gifts whose value does not exceed ten monthly calculation indices established by legislative acts (clause 1 of Article 510 of this Code).

Article 514. Consequences of causing harm due to defects in the donated item

Damage caused to the life, health or property of the donee due to defects in the donated item is subject to compensation by the donor in accordance with the rules provided for in Chapter 47 of this Code, if it is proven that these defects arose before the transfer of the item to the donee and are not obvious, and the donor, although he knew about them, did not warn the donee about them.

Article 515. Succession upon promise of donation

1. The rights of the donee, to whom a gift is promised under a gift agreement, do not pass to his heirs (legal successors), unless otherwise provided by the gift agreement.

2. The obligations of the donor who promised the donation pass to his heirs (legal successors), unless otherwise provided by the donation agreement.

Article 516. Donations

1. A donation is the donation of a thing or right for generally beneficial purposes.

Donations can be made to citizens, medical, educational institutions, social protection institutions and other similar institutions, charitable, scientific and educational institutions, foundations, museums and other cultural institutions, public and religious associations, as well as the state and other subjects of civil law specified in Articles 111 and 112 of this Code.

2. Accepting a donation does not require anyone's permission or consent.

3. The donation of property to a citizen must be, and to legal entities may be conditioned by the donor on the use of this property for a specific purpose. In the absence of such a condition, the donation of property to a citizen is considered an ordinary donation, and in other cases the donated property is used by the donee in accordance with the purpose of the property.

A legal entity accepting a donation for which a specific purpose has been established must keep separate records of all transactions involving the use of the donated property.

4. If the use of donated property in accordance with the purpose specified by the donor becomes impossible due to changed circumstances, it can be used for another purpose only with the consent of the donor, and in the event of the death of the citizen-donor or the liquidation of the legal entity-donor - by a court decision.

5. The use of donated property not in accordance with the purpose specified by the donor or a change in this purpose in violation of the rules provided for in paragraph 4 of this article gives the right to the donor, his heirs or another legal successor to demand cancellation of the donation.

6. Articles 512 and 515 of this Code do not apply to donations.

Chapter 28. Rent

Footnote: Footnote. The title of Chapter 28 as amended by the Law of the Republic of Kazakhstan dated 02/27/2017 No. 49-VI (shall be brought into force upon the expiration of ten calendar days after the day of its first official publication).

Paragraph 1. General provisions

Article 517. Rent agreement

1. Under a rent agreement, one party (rent recipient) transfers ownership of property to the other party (rent payer), and the rent payer undertakes, in exchange for the received property, to periodically pay rent to the recipient in the form of a certain amount of money or the provision of funds for its maintenance in another form.

2. Under an annuity agreement, it is possible to establish the obligation to pay annuity indefinitely (permanent annuity) or for the life of the annuity recipient (lifetime annuity). Lifetime annuity can be established on the terms of lifelong maintenance of a citizen with a dependent.

Article 518. Requirements for registration of rent

The rent agreement is subject to notarization.

The encumbrance of rent on real estate is also subject to state registration in accordance with the legislation on state registration of rights to real estate.

Failure to comply with these requirements entails the nullity of the rent agreement.

Article 519. Alienation of property for payment of rent

1. Property that is alienated for the payment of rent may be transferred by the recipient of the rent into the ownership of the rent payer for a fee or free of charge.

2. In cases where the annuity agreement provides for the transfer of property for a fee, the rules on the purchase and sale agreement (Chapter 25 of this Code) are applied to the relations of the parties regarding the transfer and payment, and in cases where such property is transferred free of charge - the rules on the gift agreement (Chapter 27 of this Code), unless otherwise established by the rules of this chapter and does not contradict the essence of the agreement.

Article 520. Encumbrance of rent on real estate

1. Rent encumbers the right to a land plot, as well as an enterprise, building, structure or other real estate transferred for its payment. In the event of alienation of such property by the rent payer, its obligations under the rent agreement are transferred to the acquirer of the property.

2. A person who has transferred the property encumbered with rent, specified in paragraph 1 of this article, into the ownership of another person, bears subsidiary liability (Article 357 of this Code) for the claims of the rent recipient arising in connection with a violation of the rent agreement, unless this Code, another legislative act or agreement provides for joint liability for this obligation.

Article 521. Security for payment of rent

1. When transferring the right to a land plot or other real estate for payment of rent, the recipient of the rent, as security for the obligation of the rent payer, acquires the right of pledge over this property.

2. An essential condition of an agreement providing for the transfer of a sum of money or other movable property against the payment of rent is a condition establishing the obligation of the rent payer to provide security for the fulfillment of his obligations (Article 292 of this Code) or to insure in favor of the annuity recipient the risk of liability for non-fulfillment or improper fulfillment of these obligations.

3. If the annuity payer fails to fulfill the obligations provided for in paragraph 2 of this article, as well as in the event of loss of security or deterioration of the conditions of security due to circumstances for which the annuity recipient is not responsible, the annuity recipient has the right to terminate the annuity contract and demand compensation for losses caused by termination of the contract.

Article 521-1. Termination of the annuity agreement at the request of the annuity recipient

1. In the event of a significant violation of the terms of the contract by the annuity payer, the annuity recipient has the right to demand that the annuity payer repurchase the annuity on the terms provided for in Article 528 of this Code, or terminate the contract.

If the annuity payer has made an attempt on the life of the annuity recipient or intentionally caused him bodily harm, the annuity recipient has the right to demand termination of the contract and compensation for losses. In case of intentional deprivation of life of the annuity recipient by the annuity payer, the right to demand termination of the contract and compensation for losses belongs to the heirs of the annuity recipient.

2. If housing or other property is alienated free of charge for the payment of rent, the rent recipient has the right, in the event of a significant violation of the terms of the contract by the rent payer, to demand the return of this property with its value offset against the redemption price of the rent.

Article 522. Liability for late payment of rent

For late payment of rent, the rent payer shall pay the rent recipient a penalty in the amount provided for in Article 353 of this Code, unless a different amount of the penalty is established by the agreement.

Paragraph 2. Constant annuity

Article 523. Recipient of permanent annuity

1. Recipients of permanent annuity can only be citizens and non-profit organizations if this corresponds to the goals of their activities.

2. The rights of the annuity recipient under a permanent annuity agreement may be transferred to the persons specified in paragraph 1 of this article by assigning a claim and transferred by inheritance or by succession during the reorganization of legal entities, unless otherwise provided by legislative acts or an agreement.

Article 524. Form and amount of permanent annuity

1. Permanent annuity is paid in money in the amount established by the contract.

2. The contract may provide for the payment of rent by providing things, performing work or services corresponding in value to the monetary amount of the rent.

3. Unless otherwise provided by the contract, the amount of rent paid changes in proportion to the change in the monthly calculation indicator established by legislative acts.

Article 525. Terms for payment of permanent annuity

Unless otherwise provided by the contract, permanent annuity is paid at the end of each calendar quarter.

Article 526. The right of the payer to repurchase permanent annuity

1. The payer of a permanent annuity has the right to refuse further payment of annuity by repurchasing it.

2. Such a refusal is valid provided that it is stated in writing by the rent payer no later than three months before the termination of rent payment or for a longer period stipulated by the contract. In this case, the obligation to pay rent does not terminate until the entire redemption amount is received by the annuity recipient, unless a different procedure for redemption is provided for in the contract.

3. The condition of the agreement on the refusal of the payer of the permanent annuity from the right to repurchase it is void.

Article 527. Redemption of permanent annuity at the request of the annuity recipient

The annuity recipient has the right to demand redemption of the annuity by the payer in cases where:

1. the rent payer is overdue for payment by more than one year, unless otherwise established by the agreement;

2) the rent payer violated its obligations to ensure payment of rent (Article 521 of this Code);

3) the rent payer is declared insolvent or other circumstances have arisen that clearly indicate that the rent will not be paid to him in the amount and terms established by the agreement;

4) the real estate transferred for the payment of rent came into common ownership or was divided between several persons;

5) in other cases provided for by the contract.

Article 528. Redemption price of permanent annuity

1. The redemption of permanent annuity in the cases provided for in Articles 526 and 527 of this Code is made at the price established by the agreement.

2. In the absence of a condition on the redemption price in the agreement under which the property is transferred for a fee against the payment of rent, the redemption is carried out at a price corresponding to the annual amount of rent payments.

3. In the absence of a condition on the redemption price in the agreement under which the property was transferred free of charge for the payment of rent, the redemption price, along with the annual amount of rent payments, includes the price of the transferred property.

Article 529. Risk of accidental loss or accidental damage to property transferred for payment of permanent annuity

1. The risk of accidental loss or accidental damage to property transferred free of charge for the payment of permanent rent is borne by the rent payer.

2. In the event of accidental destruction or accidental damage to property transferred for payment for the payment of permanent annuity, the payer has the right to demand, accordingly, termination of the obligation to pay annuity or a change in the terms of its payment.

Paragraph 3. Lifetime annuity

Article 530. Recipients of life annuity

1. Lifetime annuity can be established for the life of the citizen transferring property for payment of annuity, or for the life of another citizen specified by him.

2. It is permissible to establish a life annuity in favor of several citizens, whose shares in the right to receive annuity are assumed to be equal, unless otherwise established by the agreement.

In the event of the death of one of the annuity recipients, his share in the right to receive annuity passes to the surviving annuity recipients, unless otherwise provided by the agreement, and in the event of the death of the last annuity recipient, the obligation to pay the annuity is terminated.

3. An agreement establishing a life annuity in favor of a citizen who has died at the time of conclusion of the agreement is void.

Article 531. Amount of life annuity

1. Lifetime annuity is defined in the contract as a sum of money periodically paid to the annuity recipient during his life. In cases where the parties have entered into an agreement on lifelong maintenance with dependents, the agreement must define the monetary value of such maintenance.

2. Unless otherwise provided by the life annuity agreement, the amount of annuity paid per month must be no less than the minimum wage established by legislative acts.

Article 532. Terms of payment of life annuity

Unless otherwise provided by the contract, the life annuity is paid at the end of each calendar month.

Article 533. Termination of a life annuity contract at the request of the annuity recipient

Footnote: Footnote. Article 533 is excluded by the Law of the Republic of Kazakhstan dated February 27, 2017 No. 49-VI (shall be enforced upon the expiration of ten calendar days after the day of its first official publication).

Article 534. Risk of accidental destruction of property transferred for rent payment

Accidental destruction or accidental damage to property transferred for payment of life annuity does not relieve the annuity payer from the obligation to pay it on the terms stipulated by the contract.

Paragraph 4. Lifetime maintenance with dependents

Article 535. Lifetime maintenance agreement with dependents

1. Under an agreement of lifelong maintenance with a dependent, the annuity recipient - a citizen, transfers the real estate belonging to him into the ownership of the annuity payer, who undertakes to provide lifelong maintenance with the dependent of this citizen and (or) a third party specified by him.

2. The rules on life annuity apply to a lifelong maintenance agreement with a dependent, unless otherwise provided by the rules of this paragraph.

Article 536. Obligation to provide maintenance for dependents

1. The obligation of the rent payer to provide maintenance for dependents may include providing for the needs for housing, food and clothing, care and necessary assistance.

The agreement may also provide for payment by the rent payer for funeral services.

2. The contract must determine the cost of the total amount of maintenance with dependents. In this case, the total amount of maintenance per month cannot be less than two times the minimum wage established by legislative acts.

3. When resolving a dispute between the parties about the scope of content that is provided or should be provided to a citizen, the court must be guided by the principles of good faith and reasonableness.

Article 537. Replacement of lifelong maintenance with periodic payments

The agreement may provide for the possibility of replacing the provision of maintenance in kind with periodic payments in cash.

Article 538. Alienation and use of property transferred to ensure lifelong maintenance

1. The annuity payer has the right to alienate, pledge or otherwise encumber real estate transferred to him to ensure lifelong maintenance, only with the prior consent of the annuity recipient.

2. The annuity payer is obliged to take the necessary measures to ensure that during the period of provision of lifelong maintenance with a dependent, the use of the specified property does not lead to a decrease in the value of this property in excess of the value of its natural wear and tear.

Article 539. Termination of lifelong maintenance with dependents

1. The obligation of lifelong maintenance with a dependent shall terminate with the death of the annuitant.

2. In the event of a significant violation by the annuity payer of its obligations, the annuity recipient has the right to demand the return of real estate transferred to ensure lifelong maintenance, or payment of the redemption price to him under the conditions established by Article 528 of this Code. In this case, the rent payer has no right to demand compensation for expenses incurred in connection with the maintenance of the rent recipient.

Chapter 29. Property lease (rent)

Paragraph 1. General provisions

Article 540. Property lease agreement

1. Under a property lease (lease) agreement, the lessor undertakes to provide the tenant with property for a fee for temporary possession and use.

2. In the cases and procedure established by this Code, the tenant has the right to dispose of the rented property.

3. Property rental agreements also include leasing, rental agreements, as well as other types of agreements related to the transfer of property for a fee for temporary use.

Article 541. Property rental objects

1. Enterprises and other property complexes, land plots, buildings, structures, equipment, vehicles and other things that do not lose their natural properties during their use (non-consumable things) can be transferred to property lease.

2. The object of property lease may also be the right to land use, the right to subsoil use and other property rights, unless otherwise provided by legislative acts.

3. Legislative acts may establish types of property, the rental of which is prohibited or limited.

4. Legislative acts of the Republic of Kazakhstan may establish the specifics of leasing residential premises, land plots, subsoil plots and other isolated natural objects.

5. The specifics of leasing state property are established by the legislative act of the Republic of Kazakhstan on state property.

6. The specifics of leasing state property on the basis of a public-private partnership agreement are established by the legislative act of the Republic of Kazakhstan on public-private partnership.

Article 542. Terms of a property lease agreement

The property lease agreement must contain data allowing the identification of the property to be transferred to the tenant as the object of the property lease.

In the absence of this data in the contract, the condition regarding the object to be transferred for property lease is considered not agreed upon by the parties, and the corresponding contract is considered not concluded.

Article 543. Lessor

The right to lease property belongs to its owner.

Lessors can also be persons authorized by legislative acts or the owner to rent out property.

Article 544. Form of a property lease agreement

1. A property lease agreement for a period of more than one year, and if at least one of the parties to the agreement is a legal entity, regardless of the term, must be concluded in writing.

3. A property lease agreement between citizens for a period of up to one year inclusive can be concluded orally.

4. A property lease agreement, providing for the subsequent transfer of ownership of the property to the tenant, is concluded in the form provided for the purchase and sale agreement of such property.

Article 545. Duration of a property lease agreement

1. A property lease agreement is concluded for the period specified in the agreement.

2. If a property lease agreement is concluded without specifying a period, it is considered concluded for an indefinite period.

Each of the parties has the right to refuse such an agreement at any time, warning the other party three months in advance when renting real estate and one month in advance when renting other property, unless otherwise provided by legislation or the agreement.

3. Legislative acts may establish maximum (limit) contract periods for certain types of property lease, as well as for the lease of certain types of property. In these cases, if the rental period is not specified in the contract and neither party refused the contract before the expiration of the deadline established by legislative acts, the contract is terminated upon expiration of the deadline.

In this case, a property rental agreement that exceeds the deadline established by legislative acts is considered concluded for a period equal to the maximum (limit).

Article 546. Payment under a property lease agreement

1. Payment for the use of rented property is paid by the tenant in the manner, terms and form established by the contract, unless otherwise provided by legislative acts. In cases where they are not specified in the contract, it is considered that the procedure, terms and form usually applied when renting similar property under comparable circumstances have been established.

2. Payment is established for all rented property as a whole or separately for each of its component parts in the form of:

1. payments determined in a fixed amount, made periodically or at a time;

2) the established share received as a result of the use of hired property, products, fruits or income;

3) provision by the employer of certain services;

4) transfer by the tenant to the lessor of the thing stipulated by the contract for ownership or lease;

5) imposing on the tenant the costs stipulated by the contract for improving the leased property.

The parties may provide in the agreement for a combination of these forms of payment for the use of property or other forms of payment.

3. The amount of payment for the use of property may change no more than once a year, unless otherwise provided by agreement of the parties. Legislative acts may provide for other minimum terms for reviewing the amount of payment for certain types of property rental, as well as for the rental of certain types of property.

4. The fees may be revised at the request of one of the parties in cases of changes in centrally established prices and tariffs.

5. The tenant has the right to demand a corresponding reduction in payment if, due to circumstances for which he is not responsible, the conditions of use provided for in the contract or the condition of the property have significantly deteriorated, unless legislative acts provide otherwise.

6. Unless otherwise provided by the contract, in the event of a significant violation by the tenant of the terms of payment for the use of property, the lessor has the right to demand from him early payment of the payment within the period established by the landlord. In this case, the landlord does not have the right to demand early payment of payment for more than two consecutive terms.

Article 547. Provision of property to the tenant

1. The lessor is obliged to provide the tenant with property in a condition consistent with the terms of the contract and the purpose of the property.

2. The property is rented together with all its accessories and related documents (documents certifying the completeness, safety, quality of the property, operating procedures, etc.), unless otherwise provided by the contract.

If such supplies and documents were not transferred, but without them the tenant cannot use the property in accordance with its purpose or is significantly deprived of what he had the right to count on when concluding the contract, he may demand that the lessor provide him with such supplies and documents or terminate the contract.

3. If the landlord does not provide the tenant with the leased property within the period specified in the contract, and if such a period is not specified in the contract, within a reasonable period, the tenant has the right to demand this property from him in accordance with Article 355 of this Code or demand termination of the contract.

Article 548. Responsibility of the lessor for defects in leased property

1. The lessor is responsible for defects in the leased property that completely or partially prevent the use of it, even if at the time of concluding the contract he was not aware of these defects.

If such deficiencies are discovered, the tenant has the right, at his own discretion, to demand from the lessor:

1. eliminate defects in property free of charge;

2) proportionately reduce the rent;

3) withhold the amount of expenses incurred by him to eliminate these shortcomings from the payment for the use of the property, having previously notified the lessor about this;

4) early termination of the contract.

2. The lessor, notified of the tenant’s requirements or of his intention to eliminate the defects of the property at the expense of the lessor, may without delay replace the leased property with the consent of the tenant with other similar property that is in proper condition or eliminate the defects of the property free of charge.

3. If satisfying the tenant’s demands or deducting the costs of eliminating deficiencies from the payment for the use of property does not cover the losses caused to the tenant, he has the right to demand compensation for the uncovered part of the losses.

4. The lessor is not responsible for those shortcomings of the leased property that were agreed upon by him at the conclusion of the contract or were known to the tenant in advance.

Article 549. Rights of third parties to leased property

1. The transfer of property for rent is not a basis for terminating or changing the rights of third parties to this property.

2. When concluding an agreement, the landlord is obliged to warn the tenant about all the rights of third parties to the leased property (easement, right of pledge, etc.).

Failure to comply with this rule gives the tenant the right to demand a reduction in fees for the use of property or termination of the contract.

Article 550. Use of hired property

The tenant is obliged to use the property in accordance with the terms of the contract, and if such conditions are not specified in the contract, in accordance with the purpose of the property.

Article 551. Limits of disposal by the tenant of hired property

1. The tenant has the right, with the consent of the lessor, to sublease the leased property (sublease), transfer his rights and obligations under a property lease agreement to another person (release), provide the leased property for free use, as well as pledge these rights and make them as a contribution to the authorized capital of business partnerships, joint-stock companies or a contribution to a production cooperative, unless otherwise established by legislative acts. In these cases, with the exception of re-hiring, the lessee remains liable under the contract to the lessor.

2. An agreement on the transfer of property to other persons cannot be concluded for a period exceeding the term of the lease agreement.

3. The rules on property lease agreements apply to a sublease agreement, unless otherwise established by legislative acts.

Article 552. Obligations of the lessor for the maintenance of leased property

1. The lessor is obliged to carry out, at his own expense, major repairs of the leased property within the time period agreed upon by the parties, unless otherwise provided by legislative acts or the contract.

2. The lessor is obliged to carry out, at his own expense, repairs caused by an urgent need arising due to circumstances for which the lessee is not responsible, within a reasonable time, unless otherwise established by legislative acts or the contract.

3. Failure of the landlord to fulfill obligations for major repairs gives the tenant the right, at his own discretion, to:

1. make repairs yourself and collect from the lessor

cost of repairs;

2) set off the cost of repairs against the payment under the contract;

3) demand a corresponding reduction in the payment under the contract;

4) refuse the contract.

Article 553. Obligations of the tenant for the maintenance of rented property

The tenant is obliged to maintain the property in good condition, carry out routine repairs at his own expense and bear the costs of maintaining the property, unless otherwise provided by law or the contract.

Article 554. Ownership rights of the employer to products, fruits and other income from leased property

Products, fruits and other income received by the tenant as a result of the use of hired property are his property, unless otherwise provided by legislative acts or contract.

Article 555. Property improvements

1. Separable improvements to the leased property made by the tenant are his property, unless otherwise provided by the contract.

2. In the case where the tenant has made improvements at his own expense and with the consent of the lessor that are inseparable without harm to the rented property, he has the right, after termination of the contract, to reimburse the cost of these improvements, unless otherwise provided by the contract.

3. The cost of inseparable improvements made by the tenant without the consent of the landlord is not subject to compensation, unless otherwise provided by legislative acts or the contract.

Article 556. Change and termination of a property lease agreement at the request of one of the parties

1. At the request of one of the parties, a property lease agreement may be changed or terminated early in court in cases provided for by this Code, other legislative acts or the agreement.

2. At the request of the lessor, the property lease agreement may be terminated and the property returned to the lessor in the following cases:

1. if the tenant uses the property in significant violation of the terms of the contract or the purpose of the property, despite a written warning from the landlord to stop such actions;

2) if the tenant intentionally or through negligence significantly deteriorates the property;

3) if the tenant fails to pay fees for the use of the property more than twice after the expiration of the payment period established by the contract;

4) if the tenant does not carry out major repairs of the property within the time period established by the lease agreement, and in the absence of them in the contract - within a reasonable time in those cases where, in accordance with legislative acts or the contract, the obligation for major repairs lies with the tenant.

The lessor has the right to demand early termination of the contract only after providing the lessee with the opportunity to fulfill his obligation within a reasonable time.

3. The contract may be terminated early at the request of the tenant in the following cases:

1. the lessor does not provide the property for use by the tenant or creates obstacles to the use of the property in accordance with the terms of the contract or the purpose of the property;

2) the lessor does not carry out, within the time limits established by the contract, or, if they are not specified in the contract, within a reasonable time, the obligation assigned to him to overhaul the property;

3) the property transferred to the tenant has shortcomings that prevent its use, which were not specified by the landlord when concluding the contract, were not known to the tenant in advance and could not be discovered by him during an inspection of the property or checking its serviceability when concluding the contract;

4) if the property, due to circumstances for which the tenant is not responsible, turns out to be in a condition unsuitable for use.

Article 557. Preemptive right of the tenant to conclude an agreement for a new term

1. A tenant who has properly fulfilled his duties has, unless otherwise provided by legislative acts or an agreement, upon the expiration of the agreement, other things being equal, a priority right over other persons to conclude a property lease agreement for a new term. The tenant is obliged to notify the lessor in writing of his desire to conclude such an agreement within the period specified in the property lease agreement, and if such a period is not specified in the agreement, then within a reasonable time before the end of the agreement.

2. When concluding a property lease agreement for a new term, the terms of the agreement may be changed by agreement of the parties.

3. If the landlord refuses to conclude a contract for a new term, but within a year from the date of expiration of the contract, he has entered into a property lease agreement with another person, the tenant has the right, at his choice, to demand in court the transfer of rights and obligations under the concluded contract and compensation for losses caused by the refusal to renew the contract with him, or only compensation for losses.

Article 558. Renewal of a property lease agreement

If the tenant continues to use the property after the expiration of the contract in the absence of objections from the lessor, the contract is considered renewed on the same terms for an indefinite period. Moreover, each of the parties has the right to cancel the agreement at any time by warning the other party in writing at least three months in advance when renting real estate and one month in advance when renting other property, unless legislative acts or the agreement provide otherwise.

Article 559. Maintaining a property lease agreement in force when the parties change

1. The transfer of ownership, the right of economic management or the right of operational management of leased property to another person is not a basis for changing or terminating the property lease agreement.

2. In the event of the death of a citizen who is a tenant of real estate, his rights and obligations under the lease agreement for this property pass to the heir, unless otherwise provided by legislative acts or agreement.

The lessor has no right to refuse such an heir to enter into the contract for the remaining term of its validity, except in cases where the conclusion of the contract was conditioned by the personal qualities of the tenant.

Article 560. Dependence of a sublease agreement on the main property lease agreement

1. Unless otherwise provided by the property lease agreement, early termination of the property lease agreement entails the termination of the sublease agreement concluded in accordance with it.

2. If a property lease agreement is invalid on the grounds provided for by this Code, then the sublease agreement concluded in accordance with it is void.

Article 561. Return of property to the lessor upon termination of the contract

1. After termination of a property lease agreement, the tenant is obliged to return the property to the lessor in the condition in which it was received, taking into account normal wear and tear or in the condition stipulated by the contract.

2. If the condition of the returned property at the end of the contract does not meet the conditions provided for in paragraph 1 of this article, the tenant shall compensate the landlord for the damage caused. If the leased property falls out of service before the service life stipulated in the contract, the tenant shall compensate the lessor for the residual value of the property, unless otherwise provided by the contract.

3. If the tenant does not return the rented property or returns it untimely, the lessor has the right to demand payment for the use of the property for the entire period of delay. If the specified fee does not cover the losses caused to the lessor, he may demand compensation for them.

4. In the event that the contract provides for a penalty for untimely return of the rented property, losses may be recovered in full in excess of the penalty, unless otherwise provided by the contract.

Article 562. Transfer of property into the ownership of the tenant

1. A property lease agreement may provide that the leased property becomes the property of the lessee on the terms determined by agreement of the parties.

2. If the condition for the redemption of the leased property is not provided for in the contract, it may be established by an additional agreement of the parties, who in this case have the right to agree on the offset of previously paid fees for the use of the property into the redemption price.

3. Legislative acts may establish cases of prohibition of repurchase of leased property.

Article 563. Protection of the rights of the employer

The tenant is provided with protection of his right to the rented property on an equal basis with the protection of property rights.

The lessor is not liable to the lessee for violations of use that are caused by violent actions of third parties who do not have any rights to the rented property.

The employer has the right to sue and otherwise defend his rights on his own behalf.

Article 564. Features of certain types of property rental and rental of certain types of property

The provisions provided for in this paragraph apply to certain types of property lease agreements and rental agreements for certain types of property (leasing, lease of enterprises, lease of buildings and structures, lease of vehicles, rental), unless otherwise provided by legislative acts and rules of this Code on them.

Paragraph 2. Leasing

Article 565. Leasing agreement

1. Under a leasing agreement, the lessor undertakes to acquire ownership of the property specified by the lessee from the seller and provide the lessee with this property for temporary possession and use for a fee.

2. The leasing agreement may provide that the choice of the seller and the purchased property is carried out by the lessor.

3. Legislative acts of the Republic of Kazakhstan may establish the features of certain types of leasing agreements.

Article 566. Subject of leasing

The subject of leasing can be buildings, structures, machinery, equipment, inventory, vehicles, land plots and any other non-consumable things.

The subject of leasing may be movable property that is the subject of pledge.

The subject of leasing cannot be securities and natural resources.

Article 567. Essential terms of a leasing agreement

In addition to the conditions specified in Article 542 of this Code, the leasing agreement must contain the following conditions:

1. name of the seller of the property;

2) conditions and period of transfer of property to the lessee;

3) size and frequency of payments;

4) term of the contract;

5) the conditions for the transfer of property into the ownership of the lessee, if such a transfer is provided for in the agreement;

6) presence of encumbrances.

The essential terms of a financial leasing agreement are established by the Law of the Republic of Kazakhstan “On Financial Leasing”.

Article 568. Notification of the seller about leasing of property

The lessor, when purchasing property for the lessee, must notify the seller that the property is intended to be leased to a specific person.

Article 569. Risk of accidental loss or damage to property

The risk of accidental loss or damage to the property that is the subject of leasing passes to the lessee at the time of transfer of the property, unless otherwise provided by the contract.

Article 570. Payments under a leasing agreement

Periodic payments payable under a leasing agreement may be calculated taking into account the depreciation of all or a significant part of the value of the property at the price at the time of conclusion of the agreement.

Article 571. Transfer of the subject of the leasing agreement to the lessee

1. The property that is the subject of a leasing agreement is transferred by the seller directly to the lessee at the latter’s location, unless otherwise provided by the agreement or follows from the essence of the obligation.

2. If the property that is the subject of a leasing agreement is not transferred to the lessee within the period specified in this agreement, the lessee has the right, if the delay is due to circumstances for which the lessor is responsible, to demand termination of the agreement and compensation for losses.

3. Movable property that is the subject of a pledge may be transferred under a leasing agreement.

Article 572. Responsibility of the seller

1. The lessee has the right to present directly to the seller of the property that is the subject of the leasing agreement, requirements arising from the purchase and sale agreement concluded between the seller and the lessor, in particular, with regard to the quality and completeness of the property, the timing of its delivery and in other cases of improper performance of the agreement by the seller. In this case, the lessee has the rights and bears the obligations provided for by this Code for the buyer, except for the obligation to pay for the acquired property, as if he were a party to the purchase and sale of the specified property.

In relations with the seller, the lessee and the lessor act as joint and several creditors.

2. Unless otherwise provided by the leasing agreement, the lessor is not responsible to the lessee for the seller’s fulfillment of the requirements arising from the purchase and sale agreement, except in cases where the right to choose the seller lies with the lessor. In the latter case, the lessee has the right, at his own discretion, to present claims arising from the purchase and sale agreement, both directly to the seller of the property and to the lessor, who are jointly and severally liable.

Paragraph 3. Lease of an enterprise

Article 573. Enterprise lease agreement

1. Under an enterprise lease agreement, the lessor undertakes to provide the tenant for a fee for temporary possession and use of the enterprise as a property complex (Article 119 of this Code), including the right to the company name and (or) commercial designation of the copyright holder, to protected commercial information, as well as to other objects of exclusive rights provided for in the agreement - a trademark, service mark, etc. (a set of exclusive rights), with the exception of those rights and obligations that the lessor has no right to transfer to other persons.

2. The rights of the lessor, acquired by him on the basis of a license to engage in the relevant activity, are not subject to transfer to the lessee, unless otherwise established by legislative acts. The inclusion of obligations in the enterprise transferred under the agreement, the fulfillment of which by the lessee is impossible in the absence of such a special permit (license), does not relieve the lessor from corresponding obligations to creditors.

3. Rights and obligations in relation to the employees of the enterprise are transferred from the lessor to the lessee in the manner prescribed by the labor legislation of the Republic of Kazakhstan.

Article 574. Rights of creditors when leasing an enterprise

1. The lessor is obliged to notify his creditors in writing about the transfer of debts to the lessee before concluding the lease agreement, who, in case of disagreement with such transfer, have the right, within three months from the date of receipt of the notification, to demand from the lessor termination or early fulfillment of relevant obligations and compensation for losses. If any of these demands are not presented within the specified period, the creditor is deemed to have given consent to transfer the corresponding debt to the tenant.

2. The enterprise can be transferred to the lessee only after completion of settlements with creditors who have demanded that the lessor terminate or fulfill obligations early.

3. After the transfer of an enterprise as a property complex for lease, the lessor and the lessee shall be jointly and severally liable for the debts included in the transferred enterprise, which were transferred to the lessee without the consent of the creditor.

Article 575. Form of an enterprise lease agreement

Footnote: Footnote. The title of Article 575 as amended by the Law of the Republic of Kazakhstan dated March 25, 2011 No. 421-IV (shall be brought into force after ten calendar days after its first official publication).

1. The lease agreement for an enterprise is concluded in writing by drawing up a single document signed by the parties.

2. Failure to comply with the form of the enterprise lease agreement entails the nullity of the agreement.

Article 576. Transfer of a leased enterprise

The transfer of the enterprise to the lessee is carried out under a transfer deed. Preparing the enterprise for transfer, including drawing up and submitting the transfer act for signing, is the responsibility of the lessor and is carried out at his expense, unless otherwise provided by the contract.

Article 577. Obligations of the tenant for the maintenance of the enterprise and payment of expenses for its operation

1. The lessee of an enterprise is obliged to maintain the enterprise in proper technical condition throughout the entire term of the contract, including its current and major repairs, unless otherwise provided by the contract.

2. The lessee shall bear the costs associated with the operation of the leased enterprise, unless otherwise provided by the contract.

Article 578. Use of the property of a leased enterprise

The lessee has the right, without the consent of the lessor, to sell, exchange, provide for temporary use or loan material assets that are part of the property of the leased enterprise, sublease them and transfer his rights and obligations under the lease agreement in relation to such assets to another person, provided that this does not entail a decrease in the value of the enterprise and does not violate other provisions of the lease agreement, unless otherwise provided by legislative acts or the agreement.

Article 579. Introduction by the lessee of changes and improvements to the leased enterprise

1. The lessee has the right, without the consent of the lessor, to make changes to the composition of the leased property complex, to carry out its reconstruction, expansion, technical re-equipment, which increases its value, unless otherwise provided by the lease agreement of the enterprise.

2. The lessee of an enterprise has the right to compensation for the cost of inseparable improvements to the leased property, regardless of the lessor’s permission for such improvements, unless otherwise provided by the enterprise lease agreement.

3. The lessor may be released by the court from the obligation to compensate the lessee for the cost of inseparable improvements to the leased property if he proves that the lessee’s costs for these improvements increase the cost of the leased property disproportionately to the improvement of its operational properties or the principles of good faith and reasonableness were violated in the implementation of such improvements.

Article 580. Return of a leased enterprise

Upon termination of the lease agreement, the enterprise as a whole, as a property complex, must be returned to the lessor in compliance with the rules provided for in Articles 573, 574 and 576 of this Code. Preparation of the enterprise for transfer to the lessor, including drawing up and submitting the transfer act for signing, is in this case the responsibility of the lessee and is carried out at his expense, unless otherwise provided by the agreement.

Paragraph 4. Lease of buildings and structures

Article 581. Lease agreement for a building or structure

1. Under a lease agreement for a building or structure, the lessor undertakes to transfer the building or structure for temporary possession and use to the tenant.

2. The rules of this paragraph apply to the lease of enterprises, unless otherwise provided by the rules of this Code on the lease of an enterprise.

Article 582. Form of a lease agreement for a building or structure

Footnote: Footnote. The title of Article 582 as amended by the Law of the Republic of Kazakhstan dated March 25, 2011 No. 421-IV (shall be enforced ten calendar days after its first official publication).

1. A lease agreement for a building or structure is concluded in writing by drawing up a single document signed by the parties.

2. Failure to comply with the form of the lease agreement for a building or structure entails its nullity.

Article 583. Amount of rent

1. The lease agreement for a building or structure must stipulate the amount of rent. In the absence of a condition agreed upon in writing by the parties regarding the amount of rent, the lease agreement for a building or structure is considered not concluded. In this case, the rules for determining the price provided for in paragraph 3 of Article 385 of this Code do not apply.

2. In cases where the rent for a building or structure is established in the contract per unit area of ​​the building (structure) or another indicator of its size, the rent is determined based on the actual size of the building or structure transferred to the tenant.

Article 584. Transfer of a building or structure

1. The transfer of a building or structure by the lessor and its acceptance by the tenant is carried out under a transfer deed or other transfer document signed by the parties.

2. Evasion of one of the parties from signing a document on the transfer of a building or structure on the terms stipulated by the agreement is considered as a refusal, respectively, by the lessor to fulfill the obligation to transfer the property, and by the lessee - to accept the property.

3. Upon termination of a lease agreement for a building or structure, the leased building or structure must be returned to the lessor in compliance with the rules provided for in paragraphs 1 and 2 of this article.

Paragraph 5. Rental of vehicles

Article 585. Lease agreement for a vehicle with crew

1. Under a rental agreement (chartering for a time) of a vehicle with the provision of services for management and technical operation (lease agreement for a vehicle with a crew), the lessor is obliged to provide the lessee with a vehicle for a fee for temporary possession and use and to provide on its own services for its management and technical operation.

2. The rules of this chapter on the tenant’s pre-emptive right to conclude a lease agreement for a new term and on the renewal of a lease agreement for an indefinite period (Articles 557 and 558 of this Code) do not apply to the lease agreement for a vehicle with a crew.

Article 586. Form of rental agreement for a vehicle with crew

The rental agreement for a vehicle with a crew must be concluded in writing, regardless of its duration.

Article 587. Obligation of the lessor to maintain the vehicle

During the entire term of the contract, the lessor is obliged to maintain the proper condition of the leased vehicle, including carrying out routine and major repairs and providing the necessary accessories.

Article 588. Responsibilities of the lessor for the management and technical operation of the vehicle

1. The scope of services provided to the tenant by the lessor for the management and technical operation of the vehicle must ensure its normal and safe operation in accordance with the purposes of the lease specified in the agreement. The rental agreement for a vehicle with crew may provide for a wider range of services provided to the lessee.

2. The composition of the crew of the vehicle and its qualifications must comply with the rules and terms of the contract that are binding on the parties, and if such requirements are not established by the rules that are binding on the parties, then the requirements of the usual practice of operating a vehicle of this type and the terms of the contract.

3. Crew members maintain an employment relationship with the lessor. They are subject to the lessor's instructions regarding the management and technical operation, and the lessee's instructions regarding the commercial operation of the vehicle.

4. Unless otherwise provided by the lease agreement, the costs of paying for the services of crew members, as well as the costs of their maintenance, are borne by the lessor.

Article 589. Obligation of the lessee to pay expenses associated with the commercial operation of the vehicle

Unless otherwise provided by the rental agreement for a vehicle with a crew, the lessee bears the costs of paying for fuel and other materials consumed during operation, paying fees and other expenses arising in connection with the commercial operation of the vehicle.

Article 590. Vehicle insurance

Unless otherwise provided by the rental agreement for a vehicle with a crew, the obligation to insure the vehicle and (or) insure liability for damage that may be caused by it or in connection with its operation rests with the lessor in cases where such insurance is mandatory.

Article 591. Agreements with third parties on the use of a vehicle

Unless otherwise provided by the legislative acts of the Republic of Kazakhstan or the agreement, the lessee, as part of the commercial operation of the leased vehicle, has the right, without the consent of the lessor, on its own behalf, to enter into transportation and other agreements with third parties, if they do not contradict the purposes of using the vehicle specified in the lease agreement, and if such purposes are not established, the purpose of the vehicle.

Article 592. Liability for damage caused to a vehicle

In the event of the loss or damage of a rented vehicle, the lessee is obliged to compensate the lessor for the losses incurred if the latter proves that the loss or damage to the vehicle occurred due to circumstances for which the lessee is responsible in accordance with legislation or the contract.

Article 593. Liability for damage caused by a vehicle

Liability for damage caused to third parties by a rented vehicle, its mechanisms, devices, equipment, etc. is borne by the tenant in accordance with the rules of Article 931 of this Code.

Article 594. Peculiarities of renting certain types of vehicles

The specifics of leasing certain types of vehicles with the provision of management and technical operation services, in addition to those provided for in this paragraph, may be established by legislative acts.

Article 594-1. Lease agreement for a vehicle without a crew

1. Under a lease agreement for a vehicle without a crew, the lessor provides the lessee with a vehicle for a fee for temporary possession and use without providing services for its management and technical operation.

2. The rules on the renewal of a lease agreement for an indefinite period and the tenant’s pre-emptive right to conclude a lease agreement for a new term (Articles 557 and 558 of this Code) do not apply to the lease agreement for a vehicle without a crew.

Article 594-2. Form of rental agreement for a vehicle without a crew

The rental agreement for a vehicle without a crew must be concluded in writing, regardless of its term.

Article 594-3. Lessee's obligation to maintain the vehicle

Unless otherwise provided by the lease agreement for a bareboat vehicle, the lessee is obliged to maintain the proper condition of the leased vehicle throughout the entire term of the lease agreement for a bareboat vehicle, including carrying out routine and major repairs.

Article 594-4. Lessee's obligation to pay vehicle maintenance costs

Unless otherwise provided by the rental agreement for a vehicle without a crew, the lessee bears the costs of maintaining the rented vehicle, its insurance, including insurance of its liability, as well as expenses arising in connection with its operation.

Article 594-5. Agreements with third parties on the use of a vehicle

Unless otherwise provided for in the lease agreement for a vehicle without a crew, the lessee has the right, without the consent of the lessor, to sublease the leased vehicle under the terms of the lease agreement for a vehicle with or without a crew.

Article 594-6. Liability for damage caused by a vehicle

Responsibility for damage caused to third parties by a vehicle, its mechanisms, devices, equipment is borne by the lessee in accordance with the rules of Article 931 of this Code.

Article 594-7. Features of renting certain types of vehicles

The specifics of leasing certain types of vehicles without providing services for their management and technical operation may be established by other legislative acts.

Paragraph 6. Rental

Article 595. Rental agreement

1. Under a rental agreement, the lessor, who rents out movable property as a permanent business activity, undertakes to provide the lessee with the property for a fee for temporary possession and use.

Property provided under a rental agreement is used for consumer purposes, unless otherwise provided by the agreement or follows from the essence of the obligation.

2. The rental agreement is concluded in writing.

3. The rental agreement is public (Article 387 of this Code).

Article 596. Duration of the rental agreement

1. The rental agreement is concluded for a period of up to one year.

2. The rules on the pre-emptive right of the tenant to renew a property lease agreement and on the renewal of a property lease agreement for an indefinite period (Articles 557, 558 of this Code) do not apply to the rental agreement.

3. The lessee has the right to cancel the rental agreement at any time, unless otherwise provided by the agreement.

Article 597. Provision of property to the tenant

The lessor who enters into a rental agreement is obliged, in the presence of the lessee, to check the serviceability of the leased property, as well as familiarize the lessee with the rules for operating the property or issue written instructions to him on the use of this property.

Article 598. Elimination of deficiencies in leased property

If the tenant discovers deficiencies in the leased property that completely or partially prevent the use of it, the lessor is obliged, within ten days from the date of the tenant’s statement of the defects, unless a shorter period is established by the contract, to eliminate the defects of the property free of charge on the spot or to replace this property with other similar property that is in proper condition.

If the shortcomings of the leased property were the result of a violation by the tenant of the rules of operation and maintenance of the property, the tenant shall pay the landlord the cost of repairs and transportation of the property.

Article 599. Payment for the use of property

1. Payment for the use of property under a rental agreement is established in the form of fixed payments, made periodically or at a time.

2. In case of early return of property by the tenant, the lessor returns to him the corresponding part of the payment received for the use of the property, calculated from the day following the day of actual return of the property.

Article 600. Use of hired property

1. Major and current repairs of property leased under a rental agreement are the responsibility of the lessor.

2. Subletting of property provided to the tenant under a rental agreement, transfer by the tenant of his rights and obligations under the rental agreement to another person, provision of this property for free use, pledge of the tenant’s rights and making them as a property contribution to business partnerships, joint-stock companies, contributions to production cooperatives are not allowed.

Chapter 30. Renting a home

Article 601. Housing rental agreement

1. Under a housing rental agreement, the owner of the housing or a person authorized by him (the lessor) undertakes to provide the citizen (tenant) and members of his family with housing for use for a fee.

2. The housing rental agreement must be concluded in writing.

Article 602. Rental agreement for housing in state housing stock buildings

1. An agreement for renting housing in houses of the state housing stock is concluded on the basis of a decision of a local executive body, government agency or state enterprise on the provision of housing.

2. The conditions for the provision of housing, the rights and obligations of the parties, the grounds for changing and terminating the tenancy agreement in houses of the state housing stock are established by housing legislation.

Article 603. Rental agreement for housing in private housing stock

The conditions for renting housing in private housing stock are determined by agreement of the parties, unless otherwise provided by housing legislation.

Chapter 31. Free use of property

Article 604. Agreement for free use of property

1. Under an agreement for the gratuitous use of property (loan agreement), one party (the lender) transfers the property for gratuitous temporary use to the other party (the borrower), and the latter undertakes to return the same property in the condition in which it received it, taking into account normal wear and tear, or in the condition stipulated by the agreement.

2. The rules of Article 541, paragraph 1 and part one of paragraph 2 of Article 545, Article 550, Article 555, subparagraphs 1), 2), 4) of paragraph 2 of Article 556, Article 558 of this Code are respectively applied to the agreement for the gratuitous use of property.

3. The provisions of this Code with the features established by the legislative act of the Republic of Kazakhstan on state property and other legislative acts of the Republic of Kazakhstan are applied to the agreement for the gratuitous use of state property.

Article 605. Lender

1. The right to transfer property for free use belongs to its owner and other persons authorized to do so by legislative acts or by the owner.

2. A commercial organization does not have the right to transfer property for free use to a person who is its founder, participant (shareholder), director, member of its management or control bodies.

Article 606. Provision of property for free use

1. The lender is obliged to provide the property in a condition that complies with the terms of the agreement for gratuitous use and the purpose of the property.

2. The property is provided for free use with all its accessories and related documents (documents certifying the completeness, safety, quality of the property, operating procedures, etc.), unless otherwise provided by the contract.

If such accessories and documents were not transferred, but without them the property cannot be used for its intended purpose or its use largely loses value for the borrower, the latter has the right to demand the provision of such accessories and documents or termination of the contract and compensation for actual damage suffered by him.

Article 607. Liability for defects in property transferred for free use

1. The lender, who transferred property for free use, is responsible for the shortcomings of this property, which he intentionally or through gross negligence did not stipulate when transferring the property, if this caused real damage to the borrower.

2. The lender, notified of the requirements of the borrower or of his intention to eliminate defects in the property at the expense of the lender, may without delay replace the faulty item with another similar item in proper condition.

3. The lender is not responsible for defects in the property that were specified by him at the conclusion of the agreement or were known to the borrower in advance or should have been discovered by the borrower during an inspection of the property or checking its serviceability when concluding the agreement or when transferring the thing.

Article 608. Rights of third parties to property transferred for free use

The transfer of property for free use is not a basis for changing or terminating the rights of third parties to this property.

When concluding an agreement for gratuitous use, the lender is obliged to warn the borrower about all the rights of third parties to this property (easement, right of pledge, etc.). Failure to fulfill this obligation gives the borrower the right to demand termination of the contract and compensation for actual damage suffered by him.

Article 609. Obligations of the borrower for the maintenance of property

The borrower is obliged to maintain the property received for gratuitous use in good condition, including carrying out routine and major repairs, and bear all costs of its maintenance, unless otherwise provided by the agreement of gratuitous use.

Article 610. Risk of accidental loss or accidental damage to property

The borrower bears the risk of accidental loss or accidental damage to the property received for gratuitous use if the property is lost or damaged due to the fact that he did not use it in accordance with the agreement for gratuitous use or the purpose of the property or transferred it to a third party without the consent of the lender.

The borrower also bears the risk of accidental death or accidental damage to property if, taking into account the actual circumstances, he could have prevented its death or damage by sacrificing his property, but chose to keep his property.

Article 611. Liability for damage caused to a third party as a result of the use of property

The lender is liable for damage caused to a third party as a result of the use of property, unless he proves that the damage was caused due to intent or gross negligence of the borrower or the person in whom this property ended up with the consent of the lender.

Article 612. Early termination of a contract

1. The lender has the right to demand early termination of the agreement for gratuitous use in cases where the borrower:

1. uses the property not in accordance with the contract or the purpose of the property;

2) fails to fulfill obligations to maintain the property in good condition or maintain it;

3) significantly worsens the condition of the property;

4) transferred the property to a third party without the consent of the lender.

2. The borrower has the right to demand early termination of the agreement for gratuitous use:

1. upon discovery of shortcomings that make the normal use of the property impossible or burdensome, the presence of which he did not know and could not know at the time of concluding the contract;

2) if the property, due to circumstances for which he is not responsible, turns out to be in a condition unsuitable for use;

3) if, when concluding the agreement, the lender did not warn him about the rights of third parties to the transferred property;

4) if the lender fails to fulfill the obligation to transfer the property or its accessories and documents related to it.

Article 613. Cancellation of a contract

1. Each party has the right at any time to cancel a contract for gratuitous use, concluded without specifying a period, by notifying the other party one month in advance, unless the contract provides for a different notice period.

2. Unless otherwise provided by the agreement, the borrower has the right at any time to refuse the agreement concluded with an indication of the term, in the manner provided for in paragraph 1 of this article.

Article 614. Change of parties to an agreement

1. The lender has the right to alienate property or transfer it for compensated use to a third party. In this case, the rights from the previously concluded agreement for gratuitous use are transferred to the new owner or user, and his rights in relation to the property are encumbered by the rights of the borrower.

2. In the event of the death of a citizen-lender or reorganization or liquidation of a legal entity-lender, the rights and obligations of the lender under an agreement for gratuitous use pass to the heir (legal successor) or to another person to whom the ownership of the property or other right on the basis of which the property was transferred for gratuitous use was transferred.

In the event of reorganization of a legal entity-borrower, its rights and obligations under the agreement are transferred to the legal entity that is its legal successor, unless otherwise provided by the agreement.

Article 615. Termination of a contract

The agreement for gratuitous use is terminated in the event of the death of the citizen-borrower or the liquidation of the legal entity-borrower, unless otherwise provided by the agreement.

Chapter 32. In a row

Paragraph 1. General provisions on contracts

Article 616. Contract

1. Under a work contract, one party (contractor) undertakes to perform certain work on the instructions of the other party (customer) and deliver the result to the customer within a specified period, and the customer undertakes to accept the result of the work and pay for it (pay the price of the work). The work is performed at the contractor's risk, unless otherwise provided by law or contract.

2. Unless otherwise provided by the contract, the contractor independently determines the methods of fulfilling the customer’s assignment.

3. For certain types of contract (household contract, construction contract, contract for design or survey work, contract for research, development and technological work), the provisions provided for in this paragraph apply, unless otherwise established by the rules of this Code on contracts of these types.

4. Relations regarding certain types of work contracts may be regulated, along with this Code, also by legislative acts on certain types of work contracts.

Article 617. Performance of work as a dependent contractor

1. Unless otherwise provided by the contract, the work is performed at the expense of the contractor: from his materials, with his forces and means.

2. The Contractor is responsible for the inadequate quality of the materials and equipment provided by him, as well as for the provision of materials and equipment encumbered by the rights of third parties.

Article 618. Risk of accidental loss of materials

Unless otherwise provided by legislation or the contract, the risk of accidental loss or accidental damage to materials before the deadline for the contractor to deliver the work stipulated by the contract is borne by the party that provided the materials.

If there is a delay in the transfer or acceptance of the work result, the risk is borne by the late party, unless otherwise established by legislative acts or the contract.

Article 619. General contractor and subcontractor

1. Unless otherwise follows from legislative acts or the contract, the contractor has the right to involve other persons (subcontractors) in the execution of the contract. In this case, the contractor acts to the customer as a general contractor, and to the subcontractor as a customer.

2. The general contractor is responsible to the subcontractor for non-fulfillment or improper fulfillment of the obligation by the customer, and to the customer - responsibility for non-fulfillment or improper fulfillment of the obligation by the subcontractor.

3. Unless otherwise provided by legislative acts or contract, the customer and the subcontractor do not have the right to present each other with claims related to their violation of contracts with the general contractor.

4. With the consent of the general contractor, the customer has the right to enter into an agreement for the performance of certain works with third parties. In this case, the third party is liable for non-performance or improper performance of the work directly to the customer.

5. If an agreement is concluded simultaneously with two or more contractors and the subject of the obligation is indivisible, then the contractors are recognized as joint and several debtors in relation to the customer and, accordingly, joint and several creditors. If the subject of the obligation is divisible, as well as in other cases provided for by legislative acts or agreement of the parties, each of the contractors acquires rights and bears obligations in relation to the customer within the limits of its share.

Article 620. Time limits for completing work

1. The work contract specifies the start and end dates for the work. By agreement between the parties, the contract may also stipulate deadlines for completing individual stages of work (interim deadlines).

Unless otherwise provided by the contract, the contractor is responsible for violation of both the initial and final, as well as intermediate deadlines for the completion of work.

2. The initial, final and intermediate deadlines for completing the work specified in the contract may be changed in cases and in the manner provided for by the contract.

Article 621. Price of work

1. The work contract specifies the price of the work to be performed or the methods for determining it. If there are no such instructions in the contract and the parties fail to reach agreement, the price is set by the court based on the prices usually applied for similar work, taking into account the necessary expenses incurred by the parties.

2. The price of the work can be determined by drawing up an estimate.

In cases where the work is carried out in accordance with the estimate drawn up by the contractor, the estimate becomes valid and becomes part of the contract from the moment it is confirmed by the customer.

The price of the work (estimate) can be approximate or fixed. In the absence of other instructions in the contract, the price of the work (estimate) is considered fixed.

3. If there is a need to carry out additional work and, for this reason, a significant excess of the approximately determined price of the work (approximate estimate), the contractor is obliged to promptly notify the customer about this and suspend the work. The customer who does not agree to exceed the price of the work (estimate) has the right to withdraw from the contract. In this case, the contractor may require the customer to pay him the price for the completed part of the work.

4. The contractor who did not promptly warn the customer about the need to exceed the price (estimate) specified in the contract is obliged to fulfill the contract, retaining the right to pay for the work at the price specified in the contract.

5. The contractor does not have the right to demand an increase in the fixed price (firm estimate), and the customer does not have the right to demand its reduction, including in the case when at the time of concluding the contract it was impossible to provide for the full scope of the work to be performed or the expenses necessary for this.

If there is a significant increase after the conclusion of the contract in the cost of materials and equipment that must be provided by the contractor, as well as services provided to him by third parties, the contractor has the right to demand an increase in the established price (estimate), and if the customer refuses to fulfill this requirement, termination of the contract.

Article 622. Contractor's savings

1. In cases where the contractor’s actual expenses turned out to be less than those taken into account when determining the price (drawing up the estimate), the contractor retains the right to pay for the work at the price stipulated by the contract (estimate), unless the customer proves that the savings received by the contractor negatively affected the quality of the work performed.

2. The contract may provide for the distribution of savings received by the contractor between the parties.

Article 623. Procedure for payment for work

1. If the contract does not provide for advance payment for the work performed or its individual stages, the customer is obliged to pay the contractor the agreed price after the final delivery of the work result, provided that the work is completed properly and on time or, with the customer’s consent, ahead of schedule.

2. The contractor has the right to demand payment of an advance or deposit only in cases and in the amount specified in legislative acts or the contract.

Article 624. Right to retention

1. If the customer fails to fulfill the obligation to pay the established price or any other amount due to the contractor in connection with the execution of the contract, the contractor has the right to withhold the result of the work, as well as equipment belonging to the customer, items transferred for processing, the balance of unused materials and other property of the customer in his possession until the customer pays the corresponding amounts.

2. The contract may provide for the customer to retain part of the remuneration due to the contractor to cover the costs of eliminating deficiencies discovered within the period provided for in Article 630 of this Code.

Article 625. Performing work using customer materials

1. The contractor is obliged to use the materials provided by the customer economically and prudently, after completion of the work, provide the customer with a report on the consumption of materials, and also return the remainder of them or, with the consent of the customer, reduce the price of the work taking into account the cost of the unused material remaining with the contractor.

2. The contractor is responsible for improper performance of work caused by defects in the materials provided by the customer, unless he proves that the defects could not have been discovered by him when these materials were properly accepted.

Article 626. Contractor’s liability for failure to preserve property provided by the customer

The contractor is responsible for the failure to preserve materials, equipment provided by the customer, items transferred for processing, or other property that came into the contractor’s possession in connection with the execution of the contract.

Article 627. Rights of the customer during the performance of work

1. The customer has the right to check the progress and quality of work at any time, without interfering with the activities of the contractor.

2. If the contractor does not begin to fulfill the contract in a timely manner or performs the work so slowly that completing it on time becomes clearly impossible, the customer has the right to refuse the contract and demand compensation for losses.

3. If during the execution of the work it becomes obvious that it will not be completed properly, the customer has the right to assign a reasonable period to the contractor to eliminate the deficiencies and, if the contractor fails to fulfill this requirement within the appointed time, refuse the contract or entrust the correction of the work to a third party at the expense of the contractor, as well as demand compensation for losses.

4. Unless otherwise provided by the contract, the customer may, at any time before delivery of the work to him, refuse the contract by paying the contractor for the work performed before receiving notification of the customer’s refusal from the contract. The customer is also obliged to compensate the contractor for losses caused by termination of the contract, to the extent of the difference between the part of the price paid for the work performed and the price determined for the entire work.

Article 628. Circumstances about which the contractor is obliged to warn the customer

1. The contractor is obliged to immediately warn the customer and, until receiving instructions from him, to suspend work upon detection of:

1. unsuitability or poor quality of the materials, equipment, technical documentation provided by the customer or the item transferred for processing;

2) possible adverse consequences for the customer of following his instructions on the method of performing the work;

3) other circumstances beyond the control of the contractor that threaten the suitability or durability of the results of the work performed or make it impossible to complete it on time.

2. A contractor who did not warn the customer about the circumstances specified in paragraph 1 of this article, or continued work without waiting for the expiration of a reasonable period to respond to the warning or despite the customer’s timely instructions to suspend work, does not have the right to refer to these circumstances when presenting relevant demands to him or them to the customer.

3. If the customer, despite timely and reasonable warning from the contractor about the circumstances specified in paragraph 1 of this article, does not replace unsuitable or substandard material within a reasonable time, does not change instructions on the method of performing the work, or does not take other necessary measures to eliminate circumstances that threaten the suitability or durability of the work, the contractor has the right to refuse the contract and demand compensation for losses caused by its termination.

Article 629. Assistance of the customer

1. The customer is obliged to provide assistance to the contractor in performing the work to the extent and in the manner prescribed by the contract.

If the customer fails to fulfill this obligation, the contractor has the right to demand compensation for losses caused, including additional costs caused by downtime or rescheduling of the work, or an increase in the price of the work.

2. In cases where the performance of work under a contract has become impossible due to the actions or omissions of the customer, the contractor retains the right to pay him the established price taking into account the completed part of the work.

Article 630. Acceptance of completed work by the customer

1. The customer is obliged, within the time frame and in the manner prescribed by the contract, with the participation of the contractor, to inspect and accept the result of the work performed, and if deviations from the contract are discovered that impair the work, or other shortcomings in the work, immediately notify the contractor about this.

2. A customer who discovers deficiencies in the work during its acceptance has the right to refer to them only if the act or other document certifying acceptance stipulated these deficiencies or the possibility of subsequent submission of a demand for their elimination.

3. A customer who has accepted the results of work without checking is deprived of the right to refer to defects in the work that could have been identified during the usual method of accepting it (obvious defects).

4. The customer, who, after accepting the results of the work, discovers deviations from the contract or other defects in it that could not be identified using the usual method of acceptance (hidden defects), including those that were deliberately hidden by the contractor, is obliged to notify the contractor about this within a reasonable time after their discovery.

5. The deadline for notifying the contractor about hidden defects discovered by the customer is one year, and in relation to work related to buildings and structures, as well as regardless of the type of work - in relation to defects that were deliberately hidden by the contractor - three years from the date of acceptance of the work.

Legislative acts or contracts may establish periods (warranty periods) of greater duration.

If, in accordance with the contract, the work is accepted by the customer in parts, the period established by this paragraph begins from the day the results of the work are accepted as a whole.

6. If a dispute arises between the customer and the contractor regarding deficiencies in the work performed or their causes, an examination must be appointed at the request of either party. The costs of the examination are borne by the contractor, except in cases where the examination establishes the absence of violations of the contract or a causal connection between the actions of the contractor and the detected deficiencies. In these cases, the costs of the examination are borne by the party that requested its appointment, and if the examination is appointed by agreement between the parties, both parties equally.

7. If the customer evades acceptance of the results of the work performed, the contractor has the right, after one month from the day on which, according to the contract, the work was to be transferred to the customer, and subsequent double warning to the customer, sell the result of the work, and deposit the proceeds, minus all payments due to the contractor, into a notary deposit in the name of the customer, unless otherwise provided by the contract.

8. If the customer’s refusal to accept the results of the work performed resulted in a delay in delivery of the work, the ownership of the manufactured (processed) item is recognized as having passed to the customer at the time the transfer took place.

Article 631. Settlements between the parties in the event of the destruction of the subject of the contract or the impossibility of completing the work

If the subject of the contract was accidentally destroyed before delivery or completion of the work became impossible through no fault of the parties, the contractor has no right to demand remuneration for the work.

If the destruction of the subject of the contract or the impossibility of completing the work occurred as a result of deficiencies in the material delivered by the customer or his instructions on the method of performing the work, or occurred after the customer was in delay in accepting the work performed, and the contractor complied with the rules of Article 628 of this Code, the contractor retains the right to receive remuneration for the work.

Article 632. Quality of work

1. The work performed by the contractor must comply with the terms of the contract, and in their absence or incompleteness - with the requirements usually imposed for work of the corresponding type.

2. If legislative acts or the procedure established by them provide for mandatory requirements for work performed under a work contract, the contractor acting as an entrepreneur is obliged to perform the work in compliance with these mandatory requirements.

The contractor may assume a contractual obligation to perform work that meets higher quality requirements than the established mandatory requirements.

Article 633. Guarantee of quality of work

1. In cases where legislative acts or a contract provide for the provision by the contractor to the customer of a guarantee of the quality of work, the contractor is obliged to transfer to the customer the result of the work, which must comply with the requirements of Article 632 of this Code during the entire warranty period.

2. The guarantee of the quality of the work result, unless otherwise provided by the contract, applies to all elements that make up the work result.

Article 634. Procedure for calculating the warranty period

Unless otherwise provided by the contract, the warranty period begins to run from the moment the results of the work performed were accepted or should have been accepted by the customer.

Article 635. Contractor’s liability for poor quality of work

1. If the work is performed by the contractor with deviations from the contract that worsen the work, or with other shortcomings that make it unsuitable for what is provided for in the contract or - in the absence of a corresponding condition in the contract - for normal use, the customer has the right, unless otherwise established by legislative acts or the contract, to, at his choice, demand from the contractor:

1. gratuitous elimination of work defects within a reasonable time;

2) a proportionate reduction in the price established for the work;

3) reimbursement of their expenses for eliminating defects, when the customer’s right to eliminate them is provided for in the contract.

2. The contractor has the right, instead of eliminating the defects of the work for which he is responsible, to perform the work again free of charge with compensation to the customer for losses caused by the delay in performance. In this case, the customer is obliged to return the results of work previously transferred to him to the contractor, if the nature of the work makes such a return possible.

3. If deviations in the work from the terms of the contract or other shortcomings of the work are significant and irreparable, or if the detected shortcomings are not eliminated within a reasonable period established by the customer, the customer has the right to withdraw from the contract and demand compensation for losses caused.

4. The contract may provide for the release of the contractor from liability for certain shortcomings. This condition does not apply if the customer proves that the defects arose as a result of the contractor’s guilty actions or inaction.

5. The contractor who provided the materials to perform the work is responsible for their quality in accordance with the rules on the seller’s liability for goods of inadequate quality (subparagraphs 1)-3) and 5) of paragraph 1 of Article 428 of this Code).

Article 636. Limitation period for claims of inadequate quality of work

The limitation period for claims caused by inadequate quality of work performed under a work contract begins to run from the day the defects were discovered, which the customer declared within the period provided for in Article 630 of this Code.

Article 637. Obligation of the contractor to convey information to the customer

The contractor is obliged to transfer to the customer, along with the result of the work, information relating to the operation or other use of the subject of the contract, if this is provided for by the contract or the nature of the information is such that without it it is impossible to use the results of the work for the purposes specified in the contract.

Article 638. Confidentiality of information received by the parties

If a party, thanks to the fulfillment of its obligations under the contract, has received from the other party information about new solutions and technical knowledge, including those that do not enjoy legal protection, as well as information that may be considered a trade secret, it does not have the right to disclose it to third parties without the consent of the other party.

The procedure and conditions for using such information are determined by agreement of the parties.

Article 639. Return of materials and equipment to the customer

In cases where the customer, on the basis of paragraph 4 of Article 627 or paragraph 3 of Article 635 of this Code, refuses the contract, the contractor is obliged to return the materials, equipment provided by the customer, the item transferred for processing and other property or transfer them to the person specified by the customer, and if this turns out to be impossible, to reimburse the cost of the materials, equipment and other property received from the customer.

Paragraph 2. Features of household contracting

Article 640. Household contract

Under a household contract, a contractor engaged in business activities undertakes to perform, on the instructions of a citizen-customer, certain work designed to satisfy the household or other personal needs of the customer, and the customer undertakes to accept the results of the work and pay for it.

A household contract is a public contract (Article 387 of this Code).

Article 641. Guarantees of customer rights

1. The contractor does not have the right to force the customer to include additional paid work or services in the household contract. If this requirement is violated, the customer has the right to refuse payment for such work or services.

2. The customer has the right at any time before delivery of the results of the work to him to refuse the contract for household work, paying the contractor part of the established price for the work performed before receiving notification of the customer’s refusal from the contract, and the customer is obliged to reimburse the contractor for expenses incurred up to this point. The terms of the contract that deprive the customer of this right are void.

Article 642. Form of agreement

Unless otherwise provided by legislative acts or the contract, including the terms of the forms or other standard forms to which the customer subscribes (Article 389 of this Code), a household contract is considered concluded in the proper form from the moment the contractor issues to the customer a receipt or other document confirming the conclusion of the contract.

The absence of the specified documents from the customer does not deprive him of the right to refer to witness testimony in confirmation of the conclusion of the contract or its terms.

Article 643. Presentation of information to the customer about the results of work

When delivering the result of work to the customer, the contractor is obliged to inform him about the requirements that must be observed for the effective and safe use of the manufactured or converted item or other result of the work performed, as well as about the possible consequences for the customer and other persons of non-compliance with the relevant requirements.

Article 644. Provision of information about the work to the customer

1. The contractor is obliged, before concluding a domestic work contract, to provide the customer with the necessary and reliable information about the proposed work, its types and features, the price and form of payment for the work, as well as inform the customer, at his request, of other information related to the contract and the relevant work. If this is important due to the nature of the work, the contractor must indicate to the customer a specific person who will perform it.

2. The customer has the right to demand termination of the domestic contract and compensation for losses in cases where, due to incompleteness or unreliability of information received from the contractor, an agreement was concluded to perform work that does not have the properties that the customer had in mind.

Article 645. Performing work using contractor’s material

1. If work under a household contract is performed from the contractor’s material, the material is paid by the customer upon conclusion of the contract in full or in part specified in the contract, with final payment upon receipt by the customer of the results of the work performed by the contractor.

In accordance with the contract, the material can be provided by the contractor on credit, including with the condition that the customer pays for the material in installments.

2. A change in the price of the material provided by the contractor after the conclusion of the contract does not entail recalculation.

Article 646. Performing work from the customer’s material

If work under a household contract is performed from the customer’s material, the receipt or other document issued by the contractor to the customer upon conclusion of the contract must indicate the exact name, quantity, description and price of the materials, determined by agreement of the parties. The assessment of material in a receipt or other similar document may subsequently be challenged by the customer in court by submitting written evidence.

Article 647. Price and payment for work

The price of work in a household contract is determined by agreement of the parties and cannot be higher than that indicated in the price list announced by the contractor. The work is paid by the customer after the final delivery of its results by the contractor. By agreement of the parties, the work can be paid for by the customer upon conclusion of the contract in full or by issuing an advance.

Article 648. Consequences of discovering deficiencies in the work performed

1. The customer may exercise one of the rights provided for in Article 635 of this Code in the event that he discovered deficiencies during the acceptance of the results of work or during the use of the subject of the contract - within the general periods provided for in Article 630 of this Code, and if there are warranty periods - during these periods.

2. A demand for the gratuitous elimination of such defects in the work performed under a domestic contract, which may pose a danger to the life or health of the customer himself and other persons, may be made by the customer or his legal successor within three years from the date of acceptance of the work, unless other periods (service periods) are provided for in the manner established by legislative acts. Such a claim may be made regardless of when these defects are discovered, including if they are discovered after the end of the warranty period.

If the contractor fails to comply with this requirement, the customer has the right, within the same period, to demand either the return of part of the price paid for the work, or reimbursement of expenses incurred to eliminate the defects on their own or with the help of third parties.

Article 649. Consequences of the customer’s failure to appear to receive the results of the work performed

1. If the customer fails to appear to receive the results of the work performed or the customer otherwise evades their acceptance, the contractor has the right, having warned the customer in writing, after two months from the date of such warning, sell the subject of the contract for a reasonable price, and deposit the proceeds, minus all payments due to the contractor, into a notary deposit in the name of the customer, in accordance with Article 291 of this Code.

2. In the cases specified in paragraph 1 of this article, the contractor may, instead of selling the subject of the contract, exercise the right to retain it (Article 624 of this Code) or recover damages from the customer.

Article 650. Consequences of the death of one of the parties to the contract

In cases of termination of a domestic work contract due to the death of one of the parties (Article 376 of this Code), the consequences of termination of the contract are determined by agreement between the legal successor of the relevant party and its counterparty, and if they fail to reach an agreement - by the court, taking into account the size of the work performed and its price, the cost of the spent and preserved material, as well as other significant circumstances.

Paragraph 3. Features of a construction contract

Article 651. Construction contract

1. Under a construction contract, the contractor undertakes, within the period established by the contract, to build a certain object on the instructions of the customer or to perform other construction work, and the customer undertakes to create the necessary conditions for the contractor to perform the work, accept its result and pay the agreed price for it.

2. A construction contract is concluded for the construction or reconstruction of an enterprise, building (including a residential building), structure or other object, as well as for the performance of installation, commissioning and other work inextricably linked with the object under construction. The rules of this paragraph also apply during major repairs of buildings and structures, unless otherwise provided by the contract.

If this is provided for in the contract, the contractor assumes the obligation to ensure the operation of the facility after its acceptance by the customer for the period specified in the contract.

3. In a turnkey construction contract, the contractor assumes all responsibilities for construction and its support and must deliver the facility to the customer, ready for operation, in accordance with the contractual terms.

4. The owner of the unfinished construction before its delivery to the customer and payment for the work is the contractor (with the exception of shared housing construction projects).

5. In cases where, under a construction contract, work is performed to satisfy the household or other personal needs of a citizen (customer), the rules on the rights of the customer under a household contract are respectively applied to such an agreement.

6. A transaction providing for the acquisition of ownership or other proprietary rights of an individual, legal entity and (or) person operating in accordance with an agreement on joint activity (simple partnership, consortium) to an apartment and (or) non-residential premises or individual residential building, or their share in the field of shared participation in housing construction in a multi-apartment residential building or a complex of individual residential buildings under construction in the manner established by the Law of the Republic of Kazakhstan does not apply to a construction contract "On equity participation in housing construction."

Article 652. Allocation of risk under a construction contract

1. If a construction project is destroyed or damaged due to force majeure, before the expiration of the work completion period established by the contract, the customer is obliged, unless otherwise provided by the contract, to pay the cost of the work performed and (or) restoration work.

2. Unless otherwise provided by legislative acts or contract, the risk of accidental impossibility of performing the work before its delivery is borne by the customer.

3. The risk of accidental increase in the cost of work is borne by the contractor.

4. The contract may provide for the transfer of all possible construction risks to the contractor (turnkey construction).

5. The contract may provide for insurance of the contractor’s risks. In this case, insurance costs are included in construction costs taken into account when determining remuneration for work performed.

Article 653. Responsibility for the safety of work performed

The contractor is responsible for the safety of the work performed.

Article 654. Design and estimate documentation

1. The contractor is obliged to carry out construction and related work in accordance with the design documentation defining the volume and content of the work and other requirements for the work, and the estimate determining the price of the work.

In the absence of other instructions in the contract, it is assumed that the contractor is obliged to perform all the work specified in the design documentation and in the estimate (design and estimate documentation).

2. Unless otherwise provided by the contract, design estimates and other technical documentation drawn up in a foreign language are transferred to the contractor translated into the state or Russian language. Units of measurement must comply with the metric system established by law.

3. The construction contract must determine the composition and content of the design and estimate documentation, and must also stipulate which party must provide the relevant documentation and within what time frame.

4. A contractor who discovers during construction work that is not taken into account in the design and estimate documentation and, in connection with this, the need for additional work and an increase in the estimated cost of construction, is obliged to inform the customer about this.

If the customer does not receive a response to his message within ten days, unless legislative acts or the contract provide for a different period for this, the contractor may suspend the relevant work, attributing losses caused by downtime to the customer’s account.

5. A contractor who fails to fulfill the obligations established by paragraph 4 of this article is deprived of the right to demand from the customer payment for additional work performed and compensation for the resulting losses, unless he proves the need for immediate action in the interests of the customer, in particular, due to the fact that the suspension of work could lead to the death or damage of the object under construction.

6. If the customer agrees to additional work and payment for it, the contractor has the right to refuse to perform the specified work only in cases where they are not within the scope of the contractor’s professional activities or cannot be performed by the contractor for reasons beyond his control.

Article 655. Amendments to design and estimate documentation

1. The customer has the right to demand changes to the design and estimate documentation that are not associated with additional costs for the contractor and (or) extension of the deadline for completing the work.

2. Changes to design and estimate documentation that require additional costs for the contractor are carried out at the expense of the customer on the basis of an additional estimate agreed upon by the parties.

3. The contractor has the right to demand a revision of the estimate if, for reasons beyond his control, the cost of the work exceeded the estimate by at least ten percent.

4. The contractor has the right to demand compensation for reasonable expenses incurred in connection with the identification and elimination of defects in the design and estimate documentation, except in cases where such documentation was drawn up on his order.

Article 656. Material support for work

1. The contractor is responsible for providing the construction with materials, including parts and structures, as well as equipment, unless the contract stipulates that the customer provides the material support for the construction in whole or in a certain part.

2. The contractor, whose responsibility is to provide material support for construction, bears the risk of finding it impossible to use the materials (parts, structures) or equipment provided by the contractor without deteriorating the quality of the work performed.

3. In cases where it is discovered that it is impossible to use materials (parts, structures) or equipment provided by the customer without deteriorating the quality of the work performed, the contractor is obliged to demand that the customer replace them within a reasonable time, and if this requirement is not met, the contractor has the right to refuse the contract and demand that the customer pay the contract price in proportion to the part of the work performed, as well as compensation for losses not covered by this amount.

Article 657. Payment for work

1. Payment for work performed is made by the customer in the amount provided for in the estimate, within the time frame and in the manner established by legislative acts or the contract. In the absence of appropriate instructions in legislative acts or the contract, payment for work performed by the contractor is made in accordance with Article 623 of this Code.

2. During turnkey construction, the price specified in the contract is paid, unless otherwise provided by agreement of the parties, in full after acceptance of the object by the customer.

Article 658. Provision of land for construction

The customer is obliged to promptly provide for construction a plot of land of such area and in such condition as specified in the contract. In the absence of such instructions in the contract, the area and condition of the land plot must ensure the timely start of work, its normal conduct and completion on time.

Article 659. Additional obligations of the customer in a construction contract

The customer is obliged, in the cases and in the manner provided for in the construction contract, to transfer to the contractor for use the buildings and structures necessary for the implementation of the work, to ensure the transportation of goods to the contractor, temporary installation of power supply networks, water and steam pipelines, and to provide other services. Payment is made on the terms stipulated by the contract.

Article 660. Control and supervision of the customer over the performance of work under the contract

1. In a construction contract, the customer has the right to exercise control and supervision over the progress and quality of the work performed, compliance with the deadlines for their completion (schedule), the quality of the materials provided by the contractor, as well as the correct use of the customer’s materials by the contractor, without interfering with the operational and economic activities of the contractor.

2. A customer who, while monitoring and supervising the performance of work, discovers deviations from the terms of the contract that may worsen the quality of the work, or other shortcomings in it, is obliged to immediately notify the contractor about this. The customer who has not made such a statement loses the right to subsequently refer to the deficiencies discovered by him.

3. The contractor is obliged to comply with the customer’s instructions received during construction, if such instructions do not contradict the terms of the contract and do not constitute interference in the operational and economic activities of the contractor.

4. A contractor who improperly performed the work does not have the right to refer to the fact that the customer did not exercise control and supervision over their implementation, except in cases where the obligation to exercise such control and supervision is assigned to the customer by legislative acts or contract.

Article 661. Obligations of the contractor for environmental protection and safety of construction work

The contractor has no right to use materials (parts, structures) and equipment provided by the customer during the work, or to follow his instructions, if this may lead to a violation of the requirements for environmental protection and safety of construction work that are mandatory for the parties.

Article 662. Obligations of the parties during construction conservation

If, for reasons beyond the control of the parties, work under a construction contract is suspended and the construction project is mothballed, the customer is obliged to pay the contractor in full for the work completed up to the moment of mothballing, as well as to reimburse expenses caused by the need to stop work and mothball construction.

Article 663. Delivery and acceptance of work results

1. The customer, having received the contractor’s message about readiness for delivery of work performed under a construction contract or, if provided for by the contract, a stage of work, is obliged to immediately begin accepting the results.

2. The customer organizes and accepts the results of the work at his own expense, unless otherwise provided by the contract. In cases provided for by legislative acts, representatives of state bodies and local government bodies must participate in the acceptance of work results.

3. The customer, who has previously accepted individual stages of work, bears the risk of their loss or damage through no fault of the contractor, including in cases where the contract provides for the work to be performed at the contractor’s risk.

4. The delivery of the results of work by the contractor and their acceptance by the customer are formalized by an act signed by both parties, and in cases provided for by legislative acts, also by representatives of state bodies and local governments. If one of the parties refuses to sign the act, a note to this effect is made in it and the act is signed by the other party.

A unilateral act of delivery or acceptance of the results of work can be recognized by the court as valid only if the reasons for refusing to sign the act are recognized by the court as unfounded.

5. In cases where this is provided for by legislative acts or contract or follows from the nature of the work performed under a construction contract, acceptance of its results must be preceded by preliminary tests. In these cases, acceptance of the work results can only be carried out if the results of preliminary tests are positive.

6. The customer has the right to refuse to accept the results of the work if deficiencies are discovered that exclude the possibility of using the results of the work for the purpose specified in the contract and cannot be eliminated by the contractor, the customer or a third party.

If other deficiencies are discovered during acceptance, they must be indicated in the report provided for in paragraph 4 of this article.

7. In cases provided for by legislative acts, constructed facilities must be accepted by the customer.

In case of commissioning of poorly constructed facilities, the customer bears responsibility established by the laws of the Republic of Kazakhstan.

Article 664. Contractor’s responsibility for the quality of work

The contractor is responsible to the customer for any deviations from the requirements stipulated by the contract, the project and the building codes and regulations binding on the parties, as well as for failure to achieve the indicators of the construction project specified in the design and estimate documentation, including such as the production capacity of the enterprise.

When reconstructing (updating, rebuilding, restoring, etc.) a building or structure, the contractor is responsible for the reduction or loss of strength, stability, reliability of the building, structure or part thereof.

Article 665. Quality guarantees in a construction contract

1. The contractor, unless otherwise provided by the construction contract, guarantees that the construction project will achieve the indicators specified in the design and estimate documentation and the ability to operate the facility in accordance with the contract during the warranty period. The warranty period is ten years from the date of acceptance of the object by the customer, unless a different warranty period is provided for by legislative acts or contract.

2. The contractor is responsible for defects discovered within the warranty period, unless he proves that they arose as a result of normal wear and tear of the object or its parts, improper operation or incorrect instructions for its operation developed by the customer himself or third parties involved by him, or improper repair of the object carried out by the customer himself or third parties attracted by him.

3. The warranty period is suspended for the entire time during which the facility could not be operated due to deficiencies (defects or defects) for which the contractor is responsible.

4. If defects specified in paragraph 4 of Article 630 of this Code are discovered during the warranty period, the customer must report them to the contractor within a reasonable time after their discovery.

5. A construction contract may provide for the right of the customer to withhold the portion of the price of work specified in the estimate until the end of the warranty period as provided for in the contract.

Article 666. Elimination of defects at the expense of the customer

1. A construction contract may provide for the contractor’s obligation to eliminate, at the customer’s request and at the customer’s expense, defects (defects and shortcomings) for which the contractor is not responsible.

2. The contractor has the right to refuse to perform the work specified in paragraph 1 of this article in cases where they are not directly related to the subject of the contract or cannot be performed by the contractor for reasons beyond his control.

Paragraph 4. Features of the contract for design and survey work

Article 667. Contract for design and survey work

1. Under a contract for design and survey work, the contractor (designer, surveyor) undertakes, on the customer’s instructions, to develop design and estimate documentation and (or) perform survey work, and the customer undertakes to accept and pay for them.

2. Unless otherwise provided by legislative acts or the contract for design and (or) survey work, the risk of accidental impossibility of fulfilling the contract for design and survey work lies with the customer.

Article 668. Initial data for design and survey work

1. Under a contract for design and survey work, the customer is obliged to transfer to the contractor the design task, as well as other initial data necessary for drawing up design and estimate documentation. The design assignment on behalf of the customer can be prepared by the contractor. In this case, the task becomes binding on the parties from the moment it is approved by the customer.

2. The contractor is obliged to comply with the requirements contained in the assignment and other initial data for the design and execution of survey work, and has the right to deviate from them only with the consent of the customer.

Article 669. Obligations of the customer

Under a contract for design and survey work, the customer is obliged, unless otherwise provided by the contract:

1. pay the contractor a set price after completion of all work or pay it in installments after completion of individual stages of work;

2) use the design and estimate documentation received from the contractor only for the purposes specified in the contract, do not transfer the design and estimate documentation to third parties and do not disclose the data contained in it without the consent of the contractor;

3) provide services to the contractor in performing design and survey work to the extent and on the terms provided for in the contract;

4) participate together with the contractor in coordinating the finished design and estimate documentation with the competent state bodies and local governments;

5) reimburse the contractor for additional expenses caused by changes in the initial data for design and survey work due to circumstances beyond the control of the contractor;

6) involve the contractor in the case of a claim brought against the customer by a third party in connection with deficiencies in the drawn up design documentation or completed survey work.

Article 670. Obligations of the contractor

Under a contract for design and survey work, the contractor is obliged to:

1. carry out work in accordance with the initial design data transferred to him at the conclusion of the contract;

2) coordinate the finished design and estimate documentation with the customer, and, if necessary, together with the customer, with the competent state bodies and local government bodies;

3) unless otherwise provided by the contract, transfer the finished design and estimate documentation and the results of survey work to the customer at the same time;

4) do not transfer design and estimate documentation to third parties without the consent of the customer.

Article 671. Contractor guarantees

The contractor, under a contract for design and survey work, guarantees to the customer that third parties will not have the right to hinder or restrict the performance of work on the basis of the design and estimate documentation prepared by the contractor.

Article 672. Contractor’s liability for deficiencies in design estimates and survey work

1. The contractor under a contract for design and survey work is responsible for deficiencies in the design and estimate documentation and survey work, including deficiencies subsequently discovered during construction, as well as during the operation of the facility created on the basis of the completed design and estimate documentation and survey data.

2. If deficiencies are discovered in the design and estimate documentation or in survey work, the contractor, at the request of the customer, is obliged to redo the design and estimate documentation free of charge and, accordingly, carry out the necessary additional survey work, as well as compensate the customer for losses caused, unless otherwise provided by legislative acts or the contract.

3. Requirements arising from deficiencies in the design documentation may be presented by the person using the design documentation, even if he was not the customer for its production.

Paragraph 5. Features of contracting research, development and technological work

Article 673. Contracts for research, development and technological work

1. Under a contract for research work, the contractor (performer) undertakes to carry out scientific research stipulated by the customer’s assignment, and under a contract for development and technological work - to develop a sample of a new product, design documentation for it, new technology, or to produce a sample; The customer undertakes to issue technical specifications to the contractor (performer), accept the results of the work and pay for them.

2. An agreement with a contractor (performer) can cover both the entire cycle of research, development and production of samples, and their individual elements.

Article 674. Performance of work

1. The contractor (performer) is obliged to carry out scientific research personally. Unless otherwise provided by the contract, he has the right to involve third parties in the execution of the contract for research work only with the consent of the customer.

2. When performing experimental design and technological work, the contractor has the right, unless otherwise provided by the contract, to involve third parties in their execution as subcontractors.

Article 675. Delivery, acceptance and payment of work

The contractor (performer) is obliged to deliver, and the customer to accept and pay for, fully completed research, development and technological work. The contract may provide for acceptance and payment for individual stages of work or another method of payment.

Article 676. Confidentiality of information about the contract

Unless otherwise provided by the contract for research work or for experimental design and technological work:

1. both the contractor (performer) and the customer are obliged to ensure the confidentiality of information relating to the subject of the contract, the progress of its execution and the results obtained. The scope of information considered confidential is determined in the contract;

2) the contractor has the right to patent the results of work obtained under these contracts only with the consent of the customer.

Article 677. Rights of the parties to the results of work

1. The customer, under a contract for research work or for experimental design and technological work, has the right to use the results of work transferred to him within the limits and on the conditions stipulated by the contract.

2. Unless otherwise provided by the contract, the contractor (performer) has the right to use the result of the work obtained by him for himself.

3. The contract may provide for the right of the contractor (performer) to sell the results of work to third parties.

Article 678. Obligations of the customer

Under a contract for research work or experimental design and technological work, the customer is obliged to:

1. issue a technical specification to the contractor (performer) and agree with him on the program (technical and economic parameters) or scope of work;

2) transfer to the contractor (performer) the information necessary to perform the work;

3) accept the results of the work performed and pay for them (Article 623 of this Code).

Article 679. Obligations of the contractor (performer)

1. The contractor (executor) under a contract for research work or for experimental design and technological work is obliged to:

1. perform the work in accordance with the program (technical and economic parameters) or subject matter agreed with the customer and transfer the result to the customer within the period stipulated by the contract;

2) comply with the requirements related to the legal protection of intellectual property;

3) on his own and at his own expense, eliminate deficiencies in the technical documentation that were his fault, which may lead to deviations from the technical and economic parameters provided for in the customer’s technical specifications or in the contract;

4) immediately inform the customer about the detected impossibility of obtaining the expected results or the inappropriateness of continuing the work;

5) guarantee to the customer that third parties do not have exclusive rights to the results transferred on the basis of such an agreement.

2. Unless otherwise provided for in contracts for research or development and technological work, the contractor (performer) is obliged to:

1. refrain from publishing scientific and technical results obtained during the performance of work without the consent of the customer;

2) take measures to protect the results obtained during the performance of work that are capable of legal protection and inform the customer about this;

3) provide the customer with an exclusive license to use legally protected scientific and technical results applied in the work performed.

Article 680. Consequences of failure to achieve a result in a research contract

If during research work it is discovered

impossibility of achieving the result due to circumstances beyond the control of the contractor (performer), the customer is obliged to pay the cost of the work carried out before it was discovered that it was impossible to obtain the results provided for in the contract, but not more than the corresponding part of the price of the work specified in the contract.

Article 681. Consequences of failure to achieve a result in a contract for development and technological work

If during the implementation of experimental design and technological work it is discovered that it is not the fault of the contractor that it is impossible or impractical to continue the work, the customer is obliged to pay the costs incurred by the contractor.

Article 682. Liability of the contractor (performer) for violation of the contract

1. The contractor (performer) is liable to the customer for non-fulfillment and improper execution of the contract for research work or for experimental design and technological work, unless he proves that the violation of the contract was not the fault of the contractor (performer).

2. The contractor (performer) who violated the contract is obliged to compensate the customer’s losses in the form of actual damage, unless otherwise provided by the contract.

Chapter 33. Paid provision of services

Article 683. Contract for paid services

1. Under a contract for the provision of services for a fee, the contractor undertakes, on the instructions of the customer, to provide services (perform certain actions or carry out certain activities), and the customer undertakes to pay for these services.

2. The rules of this chapter apply to contracts for the provision of communication services, medical, veterinary, auditing, consulting, information services, training services, tourism services and other services, with the exception of services for the provision of personnel, as well as services provided under contracts provided for in Chapters 32, 34, 35, 39, 41, 43, 44 of this Code.

Article 684. Execution of a contract for paid services

Unless otherwise provided by the contract for the provision of paid services, the contractor is obliged to provide the services personally.

Article 685. Payment for services

1. The customer is obliged to pay for the services provided to him within the time frame and in the manner specified in the contract for the provision of paid services.

2. In the event of impossibility of performance due to the fault of the customer, services are subject to payment in full, unless otherwise provided by legislative acts or the contract for the provision of paid services.

3. In the event that the impossibility of performance arose due to circumstances for which neither party is responsible, the customer shall reimburse the contractor for the expenses actually incurred by him, unless otherwise provided by legislative acts or the contract.

Article 686. Unilateral refusal to execute a contract for paid services

1. The customer has the right to refuse to fulfill a contract for the provision of services for a fee, subject to payment to the contractor for the expenses actually incurred by him.

2. The contractor has the right to refuse to fulfill obligations under a contract for the provision of paid services only if the customer is fully compensated for losses caused by termination of the contract, except in cases where this was due to the fault of the customer.

Article 687. Legal regulation of a contract for paid services

General provisions on contracts (Articles 616-639 of this Code) and provisions on domestic contracts (Articles 640-650 of this Code) apply to an agreement for the provision of services for a fee, unless this contradicts Articles 683-686 of this Code, as well as the specifics of the subject of the agreement for the provision of services for a fee.

Article 687-1. Contract for the provision of personnel services

Under a contract for the provision of personnel services, one party (the sending party) sends its employee to perform work in the interests, under the management and control of the other party (the receiving party).

Chapter 34. Transportation

Article 688. General provisions

1. Transportation of goods, passengers and luggage is carried out on the basis of a contract of carriage.

2. General conditions of transportation are determined by legislative acts on transport, other legislative acts and rules issued in accordance with them.

The conditions for the transportation of goods, passengers and luggage by individual modes of transport are determined by agreement of the parties, unless otherwise established by this Code, legislative acts on transport, other legislative acts and rules issued in accordance with them.

Article 689. Contract for the carriage of goods

1. Under a contract for the carriage of goods, one party (the carrier) undertakes to deliver the cargo entrusted to him by the other party (sender) to the destination and hand it over to the person authorized to receive the goods (recipient), and the sender undertakes to pay a fee for the carriage of goods, in accordance with the agreement or tariff.

2. The contract for the carriage of goods is formalized by drawing up a waybill, bill of lading, waybill or other document for the cargo provided for by legislative acts on transport.

Article 690. Contract for the carriage of passengers

1. Under the contract for the carriage of a passenger, the carrier undertakes to transport the passenger to the destination, and if the passenger checks in luggage, also to deliver the luggage to the destination and hand it over to the person authorized to receive the luggage; the passenger undertakes to pay the fare, and when checking in baggage, also for the carriage of baggage.

2. The contract for the carriage of passengers and baggage is formalized with a travel ticket and a baggage receipt, respectively. The form of the travel ticket and baggage receipt is established in the manner prescribed by legislative acts on transport.

Article 691. Freight (charter) agreement

Under a charter agreement, one party (charterer) undertakes to provide the other party (charterer) for a fee with all or part of the capacity of one or more vehicles for one or more voyages for the transportation of passengers, luggage and cargo.

The procedure for concluding a charter agreement, as well as the form of the agreement and its types are established by legislative acts on transport.

Article 692. Contracts on the organization of transportation

If it is necessary to carry out systematic transportation, the carrier and the shipper may enter into long-term contracts for the organization of transportation.

Under an agreement on the organization of cargo transportation, the carrier undertakes to accept, and the consignor – to present for transportation, cargo in a specified volume.

The contract on the organization of transportation determines the volumes, terms, quality of transportation and other conditions for the provision of vehicles and the presentation of goods for transportation, as well as other conditions for the organization of transportation not provided for by legislative acts.

Article 693. Agreements between transport organizations

Between organizations of various types of transport, agreements can be concluded on the organization of work to ensure the transportation of goods (nodal agreements, contracts for the centralized delivery (export) of goods and others).

The procedure for concluding such agreements is determined by legislative acts on transport.

Article 694. Multimodal transport

Relationships during transportation by two or more modes of transport (mixed transport) under a single consignment note (single bill of lading), as well as the procedure for organizing these transports, are determined by agreements between participants in multimodal transport, concluded in accordance with the legislative acts of the Republic of Kazakhstan on transport.

Article 695. Transportation by public transport

1. Transportation carried out by a commercial organization is recognized as transportation by public transport if it follows from legislative acts, other regulatory legal acts or a license (patent) issued to this organization that this organization is obliged to carry out transportation of passengers, cargo and (or) luggage at the request of any citizen or legal entity.

2. The contract of carriage by public transport is a public contract (Article 387 of this Code).

Article 696. Delivery of vehicles, loading (unloading) of cargo

1. The carrier is obliged to provide the sender of the cargo for loading within the period established by the accepted application (order), the contract of carriage, serviceable vehicles in a condition suitable for transportation of the relevant cargo.

The sender of the cargo has the right to refuse submitted vehicles that are unsuitable for transporting the relevant cargo.

2. Loading (unloading) of cargo is carried out by the transport organization or the sender (recipient) in the manner and within the time limits stipulated by the contract, in compliance with the requirements established by legislative acts on transport and rules issued in accordance with them.

3. Loading (unloading) of cargo, carried out by the forces and means of the sender (recipient) of the cargo, must be carried out within the time limits stipulated by the contract, unless such time limits are established by legislative acts on transport and rules issued in accordance with them.

Article 697. Freight charges

1. For the transportation of goods, passengers and luggage, a fee established by agreement of the parties is charged, unless otherwise provided by legislative acts.

2. Payment for the transportation of goods, passengers and luggage by public transport is determined on the basis of tariffs approved in the manner established by legislative acts on transport.

3. Work and services performed at the request of cargo owners and not provided for by tariffs are paid for by agreement of the parties.

4. The carrier has the right to retain cargo and luggage transferred to him for transportation as security for the carriage charge due to him and other payments for transportation (Article 292 of this Code), unless otherwise established by law, the contract of carriage or does not follow from the essence of the obligation.

Article 698. Delivery time for cargo, passengers and (or) luggage

The carrier is obliged to deliver cargo, passengers and (or) luggage to the destination within the time period determined by legislative acts on transport and the transportation rules established in accordance with them. If the delivery period for cargo, passengers or luggage has not been established and the parties have not provided for this period in the contract, delivery must be made within a reasonable time.

Article 699. Right to dispose of cargo

1. The shipper or the owner of the document of control for the cargo may demand that the carrier terminate transportation or return the cargo or make another order. In this case, the carrier has the right to demand payment for transportation already completed, as well as compensation for expenses incurred in connection with the order made.

2. The shipper loses the rights specified in the previous paragraph at the moment of transfer of the cargo to the consignee after the cargo arrives at its destination.

3. If the consignee evades the obligations to receive cargo that requires special storage conditions (perishable), in the absence of instructions from the shipper on how to dispose of such cargo, when storing it is impossible and can lead to its damage, the carrier has the right to sell the cargo.

The amount received from the sale of cargo is deposited in the name of the notary, minus the amount due to the carrier.

Article 700. Rights of passengers

The passenger has the right, in the manner prescribed by legislative acts on transport:

1. transport children with you free of charge or on other preferential terms;

2) carry with you free hand luggage within the established limits;

3) check in luggage for transportation for a fee according to the tariff.

Article 701. Liability for violation of transportation obligations

1. In case of non-fulfillment or improper fulfillment of transportation obligations, the parties bear responsibility established by this Code, legislative acts on transport, other legislative acts, as well as agreement of the parties.

2. Agreements of transport organizations with passengers and shippers (consignees) on the limitation or elimination of liability established by legislative acts are void, except for cases where the possibility of such agreements during the transportation of goods is provided for by legislative acts on transport.

Article 702. Responsibility of the carrier for failure to deliver vehicles and the sender for failure to use provided vehicles

1. The carrier for failure to provide vehicles for the transportation of cargo in accordance with the accepted application (order) or other agreement, and the sender for failure to present cargo or failure to use the provided vehicles for other reasons, bear responsibility established by legislative acts, as well as by agreement of the parties.

2. The carrier and sender of the cargo are released from liability in the event of failure to deliver or untimely delivery of vehicles or non-use of vehicles, if this occurred due to:

1. force majeure;

2) termination or restriction of the transportation of goods in certain directions established in the manner prescribed by legislative acts on transport;

3) in other cases provided for by legislative acts.

Article 703. Responsibility of the carrier in direct mixed traffic

For loss, damage, damage, or shortage of cargo, carriers in direct mixed traffic are jointly and severally liable to the consignor (consignee).

The last carrier is responsible for the delay unless he proves that the delay was not the fault of the carriers.

Article 704. Carrier’s liability for delay in passenger departure

1. For a delay in the departure of a vehicle carrying a passenger, or the delay of such a vehicle to its destination (except for transportation in urban and suburban communications), the carrier shall pay the passenger a fine in the amount established by legislative acts on transport, unless he proves that the delay or delay was due to force majeure.

2. If a passenger refuses transportation due to a delay in the departure of the vehicle, the carrier is obliged to return the carriage charge to the passenger in full, as well as compensate the passenger for losses incurred in connection with such a delay.

Article 705. Carrier’s liability for loss, shortage and damage (spoilage) of cargo or luggage

1. The carrier ensures the safety of cargo or baggage from the moment it is accepted for transportation and until it is issued to the recipient, the person authorized by him or the person authorized to receive the baggage.

2. The carrier is responsible for the loss of cargo or luggage unless he proves that the loss, shortage or damage (spoilage) of cargo or luggage was not his fault.

3. Damage caused during the transportation of cargo or luggage is compensated by the carrier:

1. in case of loss or shortage of cargo or luggage - in the amount of the cost of the lost or missing cargo or luggage;

2) in case of damage (damage) to cargo or luggage - in the amount by which its value has decreased, and if it is impossible to restore the damaged cargo or luggage - in the amount of its value;

3) in case of loss of cargo or luggage handed over for transportation with a declaration of its value - in the amount of the declared value of the cargo or luggage.

The cost of cargo or luggage is determined based on its price indicated in the seller's invoice or provided for in the contract, and in the absence of an invoice or price indicated in the contract, based on the price that, under comparable circumstances, is usually charged for similar goods.

4. The carrier, along with compensation for established damage caused by loss, shortage or damage (spoilage) of cargo or luggage, returns to the sender (recipient) the carriage charge collected for the transportation of lost, missing, spoiled or damaged cargo or luggage, if this fee is not included in the cost of the cargo.

5. Documents on the reasons for the failure of cargo or luggage (commercial act, general act, etc.), drawn up by the carrier unilaterally, are subject in the event of a dispute to be assessed by the court along with other documents certifying the circumstances that may serve as the basis for liability of the carrier, sender or recipient of the cargo or luggage.

Article 706. Claims and suits for the transportation of goods

1. Before filing a claim against the carrier arising from the transportation of goods, it is mandatory to present a claim to him in the manner prescribed by legislative acts.

2. The limitation period for claims arising from the carriage of goods is set at one year.

3. The rules of this article do not apply to requirements arising from the carriage of passengers and baggage.

Article 707. Carrier’s liability for causing harm to the life or health of a passenger

The carrier's liability for obligations arising from causing harm to the life or health of a passenger is determined according to the rules of Chapter 47 of this Code, unless legislative acts or the contract of carriage provide for increased liability of the carrier.

Chapter 35. Transport expedition

Article 708. Transport expedition agreement

1. Under a transport expedition agreement, one party (the forwarder) undertakes, for a fee and at the expense of the other party (the client - the sender of the cargo, the recipient of the cargo or another person interested in the services of the forwarder), to perform or organize the performance of services related to the carriage of goods specified in the forwarding agreement, including concluding on behalf of the client or on its own behalf an agreement (agreements) for the carriage of goods.

As additional services, the transport expedition contract may provide for the implementation of operations necessary for the delivery of cargo, such as obtaining the documents required for export or import, performing customs and other formalities, checking the quantity and condition of the cargo, loading and unloading it, paying duties, fees and other expenses imposed on the client, storing the cargo, receiving it at the destination, as well as performing other operations and services.

With the client’s consent, the forwarder can determine what type of transport to transport the client’s goods, taking into account the client’s interests, the level of tariffs and delivery times.

2. To the extent not regulated by this chapter, the provisions of Chapter 41 of this Code, if the forwarder, under the terms of the agreement, acts on behalf of the client, and the provisions of Chapter 43 of this Code, if he acts on his own behalf, apply to relations under the forwarding agreement.

Article 709. Form of agreement

1. The transport expedition agreement is concluded in writing.

2. The client must issue a power of attorney to the forwarder if it is necessary for the performance of his duties.

Article 710. Documents and other information provided to the freight forwarder

1. The client is obliged to provide the forwarder with documents and other information about the properties of the cargo, the conditions of its transportation, as well as other information necessary for the forwarder to fulfill the obligations stipulated by the contract.

2. The forwarder is obliged to inform the client about any deficiencies found in the information received, and in case of incomplete information, request the necessary additional data from the client.

3. If the client fails to provide the necessary information, the forwarder has the right not to begin performing the relevant duties until such information is provided.

4. The client is responsible for losses caused to the forwarder in connection with violation of the obligations to provide information specified in paragraph 1 of this article.

Article 711. Performance of duties of a freight forwarder by a third party

1. If the forwarding agent’s obligation to fulfill his duties personally does not follow from the transport expedition agreement, the forwarding agent has the right to involve other persons in the performance of his duties.

2. Assigning the fulfillment of an obligation to a third party does not relieve the forwarder from responsibility to the client for the fulfillment of the contract.

Article 712. Right of retention

The forwarder has the right to retain the cargo only in connection with non-payment of the remuneration that he should receive for forwarding services.

Article 713. Responsibility of the forwarder under a transport expedition agreement

1. For failure to fulfill or improper fulfillment of obligations under a transport expedition contract, the forwarder shall be liable on the grounds and in the amount determined in accordance with the rules of Chapter 20 of this Code.

2. If the forwarder proves that the violation of the obligation is caused by improper execution of transportation contracts, the freight forwarder’s liability to the client is determined by the same rules according to which the corresponding carrier is responsible to the freight forwarder.

Article 714. Unilateral refusal to execute a transport expedition agreement

1. The client or forwarder has the right to refuse to fulfill the transport expedition agreement by notifying the other party about this within a reasonable time.

2. In case of unilateral refusal to fulfill the contract, the party that declared the refusal shall compensate the other party for losses caused by termination of the contract.

Chapter 36. Loan

Article 715. Loan agreement

1. Under a loan agreement, one party (the lender) transfers, and in cases provided for by this Code or the agreement, undertakes to transfer into ownership (economic management, operational management) to the other party (borrower) money or things defined by generic characteristics, and the borrower undertakes to promptly return to the lender the same amount of money or an equal number of things of the same kind and quality.

2. Agreements, the execution of which is associated with the transfer of money or things defined by generic characteristics, may provide for the provision of a loan, including in the form of an advance, prepayment, deferment and installment payment for goods (works and services), unless otherwise established by legislative acts and does not contradict the essence of the relevant obligations.

2-1. Individual entrepreneurs and legal entities are prohibited from providing money in the form of loans to citizens and such agreements are void.

This prohibition does not apply to the cases provided for in paragraph 2 of this article, as well as to cases of provision of money in the form of bank loans and microcredits in accordance with the laws of the Republic of Kazakhstan, a loan by an employer to its employee, a pensioner who previously had an employment relationship with this employer, as well as a loan by a legal entity to its founder (shareholder, participant).

3. Citizens and legal entities are prohibited from raising money in the form of a loan from citizens as a business activity and such agreements are void.

This prohibition does not apply to cases where the borrowers are banks licensed by an authorized state body to accept deposits, as well as to cases of accepting money in exchange for securities, the issue of which is registered in the manner prescribed by law.

Article 716. Form of loan agreement

1. The loan agreement must be concluded in a form that complies with the rules of Articles 151-152 of this Code.

2. A loan agreement is recognized as concluded in proper written form also if there is a bond, a receipt from the borrower or another document certifying the transfer by the lender of a certain amount or a certain number of things.

Article 717. Conclusion of a loan agreement

The loan agreement is considered concluded from the moment of transfer of money or things, unless otherwise provided by this Code or agreement of the parties.

In cases where an agreement provides for the transfer of money or things in installments (in installments), it is considered concluded from the moment of transfer of their first part, unless otherwise provided by the agreement.

Article 718. Remuneration under a loan agreement

1. Unless otherwise provided by the legislative acts of the Republic of Kazakhstan or the agreement, for the use of the subject of the loan, the borrower pays remuneration to the lender in the amounts determined by the agreement.

The remuneration under a loan agreement concluded with a borrower - an individual, is determined taking into account the requirements of Article 725-1 of this Code.

2. Protection of the rights of borrowers of banks, organizations carrying out certain types of banking operations, organizations carrying out microfinance activities is ensured by establishing maximum annual effective interest rates, calculated in the manner determined by the legislation of the Republic of Kazakhstan.

The maximum annual effective interest rate on bank loans and microcredits is determined by a joint regulatory legal act of the authorized body for regulation, control and supervision of the financial market and financial organizations and the National Bank of the Republic of Kazakhstan.

3. If, under a loan agreement, things are transferred to the borrower, payment of remuneration is made in the case when its size and form (monetary or in kind) are provided for by the agreement.

4. The procedure and terms for payment of remuneration are established by the loan agreement.

If the procedure and terms for payment of remuneration are not established by the contract, then it is paid monthly.

5. If the borrower does not return the loan subject on time, the remuneration is paid for the entire period of use of the loan subject, unless otherwise provided by the laws of the Republic of Kazakhstan “On Banks and Banking Activities in the Republic of Kazakhstan” and “On Microfinance Activities”.

Article 719. Provision of the subject of the loan

1. The subject of the loan is provided within the terms, in the amount and on the conditions stipulated by the agreement.

Unless otherwise provided by the agreement, the subject of the loan is considered provided at the moment it is transferred to the borrower or the corresponding money is credited to his bank account.

2. The borrower has the right to refuse to receive the loan subject in whole or in part by notifying the lender about this before the deadline established by the agreement for its provision, unless otherwise established by legislative acts or the agreement.

3. When lending things defined by generic characteristics, the fulfillment of the conditions regarding their quantity, assortment, completeness, quality, container and (or) packaging must be carried out in accordance with the rules on contracts for the sale of goods (Articles 406-492 of this Code), unless otherwise provided by the contract.

Article 720. Targeted loan

1. Unless otherwise provided by the agreement, the loan is assumed to have no purpose, and the borrower uses the received loan subject at his own discretion.

2. In cases where an agreement is concluded on the terms of the borrower using the subject of the loan for certain purposes (targeted loan), the lender has the right to exercise control over the intended use of the loan, and the borrower is obliged to ensure that the lender can exercise such control.

3. If the borrower fails to fulfill the obligations for the intended use of the loan subject, as well as the obligations provided for in paragraph 2 of this article, the lender has the right to refuse to fulfill the contract in accordance with the unprovided part of the loan subject and demand from the borrower the early return of the loan subject and remuneration on it.

Article 721. Ensuring the fulfillment of the borrower’s obligations

1. Fulfillment of obligations to return the loan subject and pay remuneration may be ensured by the methods provided for by this Code. In this case, the borrower is obliged to provide the lender with the opportunity to control the security of the loan, unless otherwise established by legislative acts or agreement.

2. If the borrower fails to fulfill his obligations to ensure the return of the loan subject and payment of interest, as well as in the event of loss of the security or deterioration of its conditions due to circumstances for which the lender is not responsible, the lender has the right to refuse to fulfill the contract in accordance with the unprovided part of the loan subject and demand from the borrower the early return of the loan subject and interest on it.

Article 722. Return of the subject of the loan

1. The borrower is obliged to return the subject of the loan in the manner and within the time frame stipulated by the agreement.

Unless otherwise provided by the agreement, the loan item is considered returned at the moment it is transferred to the lender or the corresponding money is credited to his bank account.

If the deadline for returning the loan item is not established by the agreement, it must be returned by the borrower within thirty days from the date the lender submits a request for this.

The subject of a loan provided without a condition on the payment of interest may be returned ahead of schedule. The loan subject to the condition of payment of interest may be returned ahead of schedule with the consent of the lender or if this is provided for in the agreement.

The loan interest may be paid ahead of schedule at any time, unless otherwise provided by the agreement.

2. With the consent of the lender, the borrower’s obligations can be fulfilled: under a money loan agreement - by accepting in payment of the debt things determined by generic characteristics; under a loan agreement for things - by accepting money in payment of the debt. The cost of these items is determined by agreement of the parties.

3. If the agreement provides for the return of the loan subject in parts (in installments), then if the borrower violates the deadline established for the return of the next part of the loan subject, the lender has the right to demand early return of the entire remaining part of the loan subject together with the due remuneration, as well as satisfy his demands by foreclosure on the pledged property (subparagraph 4) of paragraph 2 of Article 321 of this Code).

4. If the agreement provides for the payment of interest on the loan within a timeframe that is ahead of the deadline for returning the loan item itself, then if the deadline established for the payment of interest is violated, the lender has the right to demand from the borrower the early return of the loan item along with the due remuneration, and also to satisfy its demands by foreclosure on the pledged property (subparagraph 4) of paragraph 2 of Article 321 of this Code).

Article 723. Time limit for satisfying the requirement for early return of the loan subject

When the lender presents a demand for early return of the loan subject on the grounds provided for in paragraph 3 of Article 720, paragraph 2 of Article 721, paragraphs 3 and 4 of Article 722, the new term for the return of the loan subject and payment of interest on it is calculated according to the rule established by paragraph 1 of Article 722 of this Code.

Article 724. Challenging a loan agreement

1. The borrower has the right to challenge the loan agreement by proving that the subject of the loan (money or things) was not actually received by him from the lender or was received in a smaller amount or quantity than specified in the agreement.

2. In cases where a loan agreement must be concluded in writing (Article 716 of this Code), challenging it through testimony is not allowed, except in cases where the agreement was concluded under the influence of deception, violence, threat, malicious agreement of representatives of the parties or a combination of difficult circumstances (clauses 9 and 10 of Article 159 of this Code).

Article 725. Novation of an obligation into a loan agreement

1. By agreement of the parties, any obligation arising from purchase and sale transactions, lease of property or any other basis may be formalized by a loan agreement.

2. The registration of an obligation in a loan agreement is carried out in compliance with the requirements for innovation (Article 372 of this Code) and is concluded in the form provided for the loan agreement (Article 716 of this Code).

Article 725-1. Features of a loan agreement concluded with a borrower - an individual

1. A loan agreement concluded with an individual borrower has the following features:

1. the subject of the loan agreement is money or things defined by generic characteristics, including those provided with deferred and installment payment;

2) under the loan agreement, the borrower is an individual who is not an individual entrepreneur;

3) the loan is issued in the national currency of the Republic of Kazakhstan;

4) the loan agreement must necessarily contain the annual effective interest rate, calculated in accordance with the rules provided for in paragraph 3 of this article;

5) the annual effective interest rate under the loan agreement cannot exceed one hundred percent, including in the event of a change in the loan repayment period;

6) the amount of a penalty (fine, penalty) for violation of the obligation to repay the loan amount and (or) pay interest under the loan agreement cannot exceed 0.5 percent of the amount of the unfulfilled obligation for each day of delay, but not more than ten percent of the amount of the loan issued per year;

7) all payments by the borrower under the loan agreement, including the amount of remuneration, penalties (fines, penalties), commissions and other payments provided for by the loan agreement, with the exception of the subject of the loan, in the aggregate cannot exceed the amount of the loan issued for the entire period of validity of the loan agreement;

8) indexation of obligations and payments under a loan agreement linked to any currency equivalent is not allowed;

9) the terms of the loan agreement on the amount of remuneration, penalties (fines, penalties), commissions and other payments cannot be changed in the direction of increasing them.

The requirements of subparagraphs 4), 5), 6), 7), 8) and 9) of part one of this paragraph apply to a loan agreement, the subject of which are things defined by generic characteristics, if under such an agreement the fulfillment of the borrower’s obligation is carried out by transferring money on account of the debt, and the payment and amount of remuneration, penalties (fine, penalty), commissions and other payments provided for by the loan agreement are made in cash.

2. A loan agreement concluded with a borrower - an individual that does not comply with the requirements of paragraph 1 of this article is void.

3. The rules for calculating the annual effective interest rate under a loan agreement are determined by the regulatory legal act of the authorized body for regulation, control and supervision of the financial market and financial organizations.

4. The rules relating to the loan agreement, with the features provided for in this article, apply to a loan agreement concluded with a borrower - an individual.

5. The requirements of this article do not apply to loan agreements, the lenders of which are the persons specified in paragraph 2 of Article 718 of this Code.

Article 726. State loan agreement

1. Under a government loan agreement, the borrower is the state, and the lender is a citizen or legal entity.

2. Government loans are voluntary.

3. A government loan agreement is concluded through the acquisition by the lender of issued government bonds, as well as other government securities (certificate or uncertificated), certifying the lender’s right to receive from the borrower the money lent to him or, depending on the terms of the loan, other property equivalent, established remuneration or other property rights within the terms provided for by the terms of issuance of this loan.

4. For its obligations arising from the state loan agreement, the borrower is liable with the property of the state treasury.

5. Features of the participation of the Republic of Kazakhstan in state loan relations may be established by legislative acts.

Article 727. Bank loan agreement

1. Under a bank loan agreement, the lender undertakes to loan money to the borrower on the terms of payment, urgency, and repayment.

1-1. Under a bank loan agreement concluded during an Islamic banking operation, money is borrowed on the terms of urgency and repayment and without charging a fee for the use of money.

2. The rules relating to the loan agreement are applied to the bank loan agreement, with the features provided for in Article 728 of this Code.

Article 728. Features of a bank loan agreement, a microcredit agreement and a syndicated loan agreement

Footnote: Footnote. The title of Article 728 is as amended by the Law of the Republic of Kazakhstan dated 01/02/2021 No. 399-VI (shall be enforced upon the expiration of ten calendar days after the day of its first official publication).

A bank loan agreement and a microcredit agreement have the following features:

1. under a bank loan agreement, the lender is a bank or other legal entity that has a license from an authorized state body for bank loan operations;

2) under an agreement on the provision of a microcredit, an organization engaged in microfinance activities acts as a lender;

3) the subject of a bank loan agreement, a microcredit agreement is money that can be provided in the future. In the latter case, a bank loan agreement, an agreement on the provision of a microcredit are considered to have entered into force from the moment of their conclusion (clause 1 of Article 393 of this Code), unless otherwise provided by these agreements;

4) a bank loan agreement, an agreement on the provision of a microcredit must be concluded in writing. Failure to comply with the written form entails the nullity of a bank loan agreement or a microcredit agreement;

5) a bank loan agreement, an agreement on the provision of a microcredit cannot contain a condition providing for the right of a bank or other legal entity licensed by an authorized state body for bank borrowing operations, an organization engaged in microfinance activities, to unilaterally change the terms of the agreement, unless otherwise provided by the legislative acts of the Republic of Kazakhstan;

6) the provisions of paragraph 2 of Article 722 of this Code do not apply to a bank loan agreement, an agreement on the provision of a microcredit, except for cases provided for by the banking legislation of the Republic of Kazakhstan or the legislation of the Republic of Kazakhstan on microfinance activities;

7) the provisions of paragraphs 3 and 4 of Article 722 of this Code apply to a bank loan agreement, an agreement to provide a microcredit if the borrower violates the deadline established for returning the next part of the loan, microloan and (or) payment of remuneration by more than forty calendar days;

8) the issuance of a pawn ticket by a pawnshop is equivalent to the conclusion of an agreement on the provision of a microcredit.

Banks are prohibited from issuing loans secured by shares issued by the bank, or loans for the purchase of these shares.

Features of a mortgage loan provided to individuals are determined by the Law of the Republic of Kazakhstan “On Banks and Banking Activities in the Republic of Kazakhstan”.

Features of a consumer bank loan and consumer microcredit are determined by the banking legislation of the Republic of Kazakhstan and the legislation of the Republic of Kazakhstan on microfinance activities.

The specifics of the syndicated loan agreement are determined by the legislation of the Republic of Kazakhstan on project financing and securitization.

Banks and organizations engaged in microfinance activities are prohibited from issuing a loan to a citizen for five years from the date of posting an announcement about the completion of an extrajudicial bankruptcy procedure or a judicial bankruptcy procedure in the manner prescribed by the Law of the Republic of Kazakhstan “On restoration of solvency and bankruptcy of citizens of the Republic of Kazakhstan,” with the exception of loans issued by pawnshops secured by movable property that is not subject to state registration.

Chapter 37. Financing against the assignment of a monetary claim (factoring)

Article 729. Financing agreement for the assignment of a monetary claim (factoring)

1. Under a financing agreement for the assignment of a monetary claim, one party (financial agent) transfers or undertakes to transfer money to the disposal of the other party (client), and the client assigns or undertakes to assign to the financial agent his monetary claim against a third party arising from the relationship of the client (creditor) with this third party (debtor).

A monetary claim against a debtor may be assigned by a client to a financial agent also in order to ensure the fulfillment of the client’s obligation to the financial agent.

2. The obligations of a financial agent under a financing agreement for the assignment of a monetary claim may include maintaining accounting records for the client and presenting documents in relation to monetary claims (invoicing for monetary claims) that are the subject of the assignment, as well as providing the client with other financial services related to these claims.

3. The general rules on the assignment of claims established by this Code (Articles 339-347 of this Code) apply to financing against the assignment of a monetary claim, unless otherwise provided by this chapter.

Article 730. Form of an agreement on financing for the assignment of a monetary claim

A financing agreement for the assignment of a monetary claim must be concluded in writing in compliance with the requirements established by Article 346 of this Code.

Article 731. Monetary claim assigned in order to obtain financing

1. The subject of the assignment for which financing is provided can be either a monetary claim, the payment period for which has already arrived (existing claim), or the right to receive money that will arise in the future (future claim).

The monetary claim that is the subject of the assignment must be defined in the client’s agreement with the financial agent in such a way that allows the existing monetary claim to be identified at the time the contract is concluded, and the future claim - no later than at the time of its occurrence.

2. An existing monetary claim is considered transferred to the financial agent from the moment the agreement is concluded, unless otherwise provided by this agreement.

When assigning a future monetary claim, it is considered transferred to the financial agent after the very right to receive from the debtor the money that is the subject of the assignment of the claim provided for by the contract has arisen.

If the assignment of a monetary claim is conditioned by a certain event, it comes into force after the occurrence of this event. In these cases, no additional formalization of the assignment of a monetary claim is required.

Article 732. Responsibility of the client to the financial agent

1. Unless otherwise provided by the agreement, the client shall be liable to the financial agent for the invalidity of the monetary claim that is the subject of the assignment.

2. A monetary claim that is the subject of an assignment is recognized as valid if the client has the right to transfer the monetary claim and at the time of assignment of this claim he is unaware of the circumstances due to which the debtor has the right not to fulfill it.

3. The client is not responsible for non-fulfillment or improper fulfillment by the debtor of the claim that is the subject of the assignment if it is presented for execution by the financial agent, unless otherwise provided by the agreement between the client and the financial agent.

Article 733. Invalidity of the prohibition on assignment of a claim

1. The assignment of a monetary claim to a financial agent is valid even if there is an agreement between the client and his debtor to prohibit or restrict it.

2. The provision established by paragraph 1 of this article does not relieve the client from obligations or liability to the debtor in connection with the assignment of a claim in violation of the agreement existing between them on its prohibition or limitation.

Article 734. Subsequent assignment of a monetary claim

Unless otherwise provided for in the financing agreement for the assignment of a monetary claim, subsequent assignment of a monetary claim by the financial agent is not permitted.

In cases where a subsequent assignment of a monetary claim is permitted by agreement, the provisions of this chapter are applied to it accordingly.

Article 735. Fulfillment of a monetary claim by a debtor to a financial agent

1. The debtor is obliged to make a payment to the financial agent, provided that he has received written notification from the client or from the financial agent about the assignment of the monetary claim to this financial agent.

The notice must specifically identify the monetary claim to be enforced and identify the financial agent to whom payment is to be made.

2. At the request of the debtor, the financial agent is obliged to provide the debtor with evidence within a reasonable time that the assignment of the monetary claim to the financial agent actually took place. If the financial agent has not fulfilled this obligation, the debtor has the right to make a payment to the client in accordance with this requirement in fulfillment of his obligation to the latter.

3. Fulfillment of a monetary claim by a debtor to a financial agent in accordance with the rules of this article releases the debtor from the corresponding obligation to the client.

Article 736. Rights of the financial agent to amounts received from the debtor

1. If, under the terms of a financing agreement for the assignment of a monetary claim, the client is financed by purchasing this claim from him by a financial agent, the latter acquires the right to all amounts that he receives from the debtor in fulfillment of the claim, and the client is not responsible to the financial agent for the fact that the amounts received by him were less than the amount that the financial agent paid to the client.

2. If the assignment of a monetary claim to a financial agent is carried out as a way to ensure that the client fulfills his obligation to the financial agent and the financing agreement for the assignment of the claim does not provide otherwise, the financial agent is obliged to provide a report to the client and transfer to him an amount exceeding the amount of the client’s obligation secured by the assignment of the claim. If the money received by the financial agent from the debtor turns out to be less than the amount of the client’s obligation to the financial agent, secured by the assignment of the claim, the client is liable for the remaining part of the obligation.

3. The rules of this article apply unless otherwise provided for in the financing agreement for the assignment of a monetary claim.

Article 737. Counterclaims of the debtor

If a financial agent approaches the debtor with a demand to make payment, the debtor has the right, in accordance with Article 370 of this Code, to present for offset his monetary claims based on an agreement with the client, which the debtor already had by the time he received notification of the assignment of the claim to the financial agent.

The financial agent has the right to refuse offset if the client has not notified him of the existence of obligations to the debtor.

Article 738. Return to the debtor of amounts received by the financial agent

1. If the client violates his obligations under an agreement concluded with the debtor, the latter has no right to demand from the financial agent the return of amounts already paid by him on a claim transferred to the agent, if the debtor has the right to receive such amounts directly from the client.

2. The debtor who has the right to receive directly from the client the amounts paid to the financial agent as a result of the assignment

claims, nevertheless has the right to demand the return of these amounts by the financial agent if it is proven that the latter did not fulfill its obligation to the client to provide financing for the assignment of the claim or provided such financing, knowing that the client violated the obligation to the debtor to whom the financing associated with the assignment of the claim relates.

Article 738-1. Assignment of monetary claims in project financing and securitization

Features of financing against the assignment of a monetary claim in project financing and securitization are established by the legislative act of the Republic of Kazakhstan on project financing and securitization. The provisions of this chapter apply to project financing and securitization transactions, unless otherwise established by the legislative act of the Republic of Kazakhstan on project financing and securitization.

Article 738-2. Assignment of monetary claims when financing public-private partnership projects

Features of financing public-private partnership projects under the assignment of a monetary claim are established by the legislation of the Republic of Kazakhstan in the field of public-private partnership.

The provisions of this chapter apply to transactions for financing public-private partnership projects, unless otherwise established by the legislation of the Republic of Kazakhstan in the field of public-private partnership.

Chapter 38. Banking services

Paragraph 1. General provisions

Article 739. Banking service agreement

1. Under a banking service agreement, one party (the bank) undertakes, on behalf of the other party (the client), to provide banking services, and the client undertakes to pay for these services, unless otherwise provided by the agreement.

2. The banking service agreement is divided into:

1. bank account agreement;

2) money transfer agreement;

3) bank deposit agreement;

4) other types of contracts provided for by law or agreement of the parties.

2-1. When concluding a bank account agreement and (or) a bank deposit agreement with a bank, bank accounts are opened.

3. The bank can use the money available in the bank account, guaranteeing the client’s right to freely manage his money.

Article 740. Restrictions on the disposal of money in the bank

1. The money of citizens and legal entities located in bank accounts may be seized only by the courts on the basis of judicial acts and by bailiffs on the basis of decisions of bailiffs authorized by the prosecutor, or decisions of territorial bodies of justice formed in the state automated information system of enforcement proceedings, in the manner and on the grounds that are established by the criminal procedural and civil procedural legislation of the Republic of Kazakhstan and the legislation of the Republic of Kazakhstan on enforcement proceedings and the status of judicial performers.

For the money located in the client’s bank accounts, the person conducting the pre-trial investigation may establish a temporary restriction on the disposal of property or a restriction on transactions and other operations with property on the grounds and in the manner provided for by the criminal procedural legislation of the Republic of Kazakhstan.

It is not allowed to establish temporary restrictions on the disposal of property, restrictions on transactions and other operations with property, or seizure of:

1. for money located in bank accounts and (or) electronic money located in electronic electronic money wallets intended for crediting benefits and social payments paid from the state budget and (or) the State Social Insurance Fund;

1-1) for money located in bank accounts intended for crediting compensation for material damage and providing the necessary assistance from the state budget and (or) from charitable organizations to individuals affected by a natural or man-made emergency;

2) for money located in bank accounts intended for crediting housing payments, one-time pension payments from the unified accumulative pension fund in order to improve housing conditions and (or) pay for treatment, target assets, payments of target savings from the unified accumulative pension fund in order to improve housing conditions and (or) pay for education, payments of savings from an educational accumulative deposit or insurance payments under an educational accumulative insurance agreement for the improvement of housing conditions;

2-1) for money held in bank accounts in housing construction savings banks in the form of housing construction savings, accumulated through the use of housing payments, one-time pension payments from the unified accumulative pension fund in order to improve living conditions and (or) pay for treatment, in the form of payments of targeted savings from the unified accumulative pension fund in order to improve housing conditions and (or) pay for education, in the form of payments of savings from an educational accumulative deposit or insurance payments under an educational savings insurance agreement for the improvement of living conditions;

2-2) for money held in bank accounts in second-tier banks in the form of savings for major repairs of the common property of the condominium object, with the exception of penalties based on court decisions in cases of failure to fulfill obligations under contracts concluded for the purpose of carrying out major repairs of the common property of the condominium object;

2-3) for money held in a bank account in a housing construction savings bank, which has the status of a national development institution, intended for crediting payments and subsidies to pay for rented housing in a private housing stock;

2-4) for money held in bank accounts in housing construction savings banks in the form of housing construction savings, which are the subject of collateral for issued bank loans;

3) for money deposited under the terms of a notary deposit;

4) for money held in bank accounts under an agreement on educational savings deposit, concluded in accordance with the Law of the Republic of Kazakhstan “On the State Educational Savings System”;

5) on the assets of the social health insurance fund and transfers allocated for the guaranteed volume of free medical care located in bank accounts;

5-1) for money located in bank accounts intended for accounting for the money of clients of the investment portfolio manager, for unfulfilled obligations of this investment portfolio manager;

5-2) for money located in bank accounts intended for accounting for the money of clients of a person performing the functions of a nominal holder, for unfulfilled obligations of this person performing the functions of a nominal holder;

5-3) for money held in bank accounts to carry out clearing activities for transactions with financial instruments;

6) with the money of banks, insurance (reinsurance) organizations, voluntary savings pension funds, branches of non-resident banks of the Republic of Kazakhstan, branches of non-resident insurance (reinsurance) organizations of the Republic of Kazakhstan, deprived of a license by the authorized state body and (or) in the process of forced liquidation (forced termination of activities);

7. for money located in bank accounts intended for crediting compensation for investment costs, in accordance with the legislation of the Republic of Kazakhstan in the field of public-private partnership;

8) with money located in the current account of a private bailiff, intended for storing collected amounts in favor of collectors.

8-1) for money located in the current account of the financial manager for crediting money in the judicial bankruptcy procedure in accordance with the Law of the Republic of Kazakhstan “On restoration of solvency and bankruptcy of citizens of the Republic of Kazakhstan”;

8-2) for money located in the bank accounts of a citizen against whom a case has been initiated to apply a procedure or a procedure has been applied in accordance with the Law of the Republic of Kazakhstan “On restoration of solvency and bankruptcy of citizens of the Republic of Kazakhstan”;

9) for money held in the bank account of a single operator in the field of public procurement, intended for potential suppliers or suppliers of money to be deposited as security measures within the framework of participation in public procurement in accordance with the Law of the Republic of Kazakhstan “On Public Procurement”.

10) for money located in bank accounts intended for crediting material assistance provided in accordance with subparagraph 1) of paragraph 4 of Article 112 of the Social Code of the Republic of Kazakhstan;

11) for money and (or) securities of banks in the central depository and (or) clearing organization, intended to ensure the completion of settlements for interbank payments and (or) money transfers made in the territory of the Republic of Kazakhstan using payment cards.

The provisions of subparagraph 7) of part three of this paragraph do not apply to restrictions imposed by state revenue authorities, as well as by courts on the basis of judicial acts and bailiffs on the basis of decisions of bailiffs authorized by the prosecutor, for which there are requirements relating to the first, second and third priority in accordance with the priority provided for in paragraph 2 of Article 742 of this Code.

The provision of subparagraph 8) of part three of this paragraph does not apply to the restrictions imposed by the authorized body in the field of ensuring the execution of executive documents, its territorial bodies, on the suspension of expenditure transactions on the current account intended for storing collected amounts in favor of collectors, a private bailiff whose license is suspended or terminated or whose license was deprived.

2. The period of arrest of money of legal entities and citizens located in banks cannot exceed the time limits established for the conduct of relevant cases by the criminal procedural and civil procedural legislation of the Republic of Kazakhstan.

3. Acts on the seizure of client money located in bank accounts may be appealed to the court in the manner established by the laws of the Republic of Kazakhstan.

4. Suspension of debit transactions on client bank accounts is carried out in the manner and in cases established by the legislative acts of the Republic of Kazakhstan.

6. Acts of seizure, decisions and (or) orders of authorized state bodies or officials on the suspension of debit transactions on the client’s bank accounts, presented to the client’s bank account, are executed taking into account the date and time of receipt.

Withdrawal of money in the client’s bank account in the event of insufficient money and (or) in the presence of restrictions on the disposal of money in the bank account is carried out taking into account paragraph 8 of this article and in accordance with the sequence provided for in paragraph 2 of Article 742 of this Code.

8. Restrictions on the disposal of money in the bank do not apply to the withdrawal of money on claims related to one priority and (or) higher in accordance with the priority provided for in paragraph 2 of Article 742 of this Code.

Article 741. Withdrawal of money without the client’s consent

Withdrawal of money from citizens and legal entities in banks and other organizations carrying out certain types of banking operations without their consent can be carried out only on the basis of a judicial act that has entered into legal force, as well as in cases provided for by the Code of the Republic of Kazakhstan “On taxes and other obligatory payments to the budget” (Tax Code), the customs legislation of the Eurasian Economic Union and (or) the Republic of Kazakhstan, the Social Code of the Republic of Kazakhstan, the laws of the Republic of Kazakhstan, “On payments and payment systems", "On compulsory social health insurance".

Foreclosure is not allowed:

1. for money located in bank accounts and (or) electronic money located in electronic electronic money wallets intended for crediting benefits and social payments paid from the state budget and (or) the State Social Insurance Fund;

1-1) for money located in bank accounts intended for crediting compensation for material damage and providing the necessary assistance from the state budget and (or) from charitable organizations to individuals affected by a natural or man-made emergency;

2) for money located in bank accounts intended for crediting housing payments, one-time pension payments from the unified accumulative pension fund in order to improve housing conditions and (or) pay for treatment, target assets, payments of target savings from the unified accumulative pension fund in order to improve housing conditions and (or) pay for education, payments of savings from an educational accumulative deposit or insurance payments under an educational accumulative insurance agreement for the improvement of housing conditions;

2-1) for money held in bank accounts in housing construction savings banks in the form of housing construction savings, accumulated through the use of housing payments, one-time pension payments from the unified accumulative pension fund in order to improve living conditions and (or) pay for treatment, in the form of payments of targeted savings from the unified accumulative pension fund in order to improve housing conditions and (or) pay for education, in the form of payments of savings from an educational accumulative deposit or insurance payments under an educational savings insurance agreement for the improvement of living conditions;

2-2) for money held in bank accounts in second-tier banks in the form of savings for major repairs of the common property of the condominium object, with the exception of penalties based on court decisions in cases of failure to fulfill obligations under contracts concluded for the purpose of carrying out major repairs of the common property of the condominium object;

2-3) for money held in a bank account in a housing construction savings bank, which has the status of a national development institution, intended for crediting payments and subsidies to pay for rented housing in a private housing stock;

2-4) for money held in bank accounts in housing construction savings banks in the form of housing construction savings, which are the subject of collateral for issued bank loans;

3) for money deposited under the terms of a notary deposit;

4) for money held in bank accounts under an agreement on educational savings deposit, concluded in accordance with the Law of the Republic of Kazakhstan “On the State Educational Savings System”;

5. on the assets of the social health insurance fund and transfers allocated for the guaranteed volume of free medical care located in bank accounts;

5-1) for money located in bank accounts intended for accounting for the money of clients of the investment portfolio manager, for unfulfilled obligations of this investment portfolio manager;

5-2) for money located in bank accounts intended for accounting for the money of clients of a person performing the functions of a nominal holder, for unfulfilled obligations of this person performing the functions of a nominal holder;

5-3) for money held in bank accounts to carry out clearing activities for transactions with financial instruments;

5-4) for money and (or) securities of banks in the central depository and (or) clearing organization, intended to ensure the completion of settlements for interbank payments and (or) money transfers made on the territory of the Republic of Kazakhstan using payment cards;

6. for money located in bank accounts intended for crediting compensation for investment costs, in accordance with the legislation of the Republic of Kazakhstan in the field of public-private partnership;

7) with money located in the current account of a private bailiff, intended for storing collected amounts in favor of collectors.

7-1) for money located in the current account of the financial manager for crediting money in the judicial bankruptcy procedure in accordance with the Law of the Republic of Kazakhstan “On restoration of solvency and bankruptcy of citizens of the Republic of Kazakhstan”;

7-2) for money located in the bank accounts of a citizen against whom a case has been initiated to apply a procedure or a procedure has been applied in accordance with the Law of the Republic of Kazakhstan “On restoration of solvency and bankruptcy of citizens of the Republic of Kazakhstan

8) for money held in the bank account of a single operator in the field of public procurement, intended for potential suppliers or suppliers of money to be deposited as security measures within the framework of participation in public procurement in accordance with the Law of the Republic of Kazakhstan “On Public Procurement”.

9) for money located in bank accounts intended for crediting material assistance provided in accordance with subparagraph 1) of paragraph 4 of Article 112 of the Social Code of the Republic of Kazakhstan.

The provision of subparagraph 6) of part two of this article does not apply to the withdrawal of money on claims related to the first, second and third priority in accordance with the priority provided for in paragraph 2 of Article 742 of this Code.

Article 742. Sequence of withdrawal of client’s money

1. If the client’s money in the bank is sufficient to satisfy all the requirements presented to the client, the withdrawal of money is carried out in the order of receipt of orders from the client or other persons (calendar priority), unless otherwise provided by legislative acts.

2. If the client’s money in the bank is insufficient to satisfy the next requirement presented to the client, the bank accumulates money received in favor of the client, the amount of which is sufficient to satisfy the specified requirement, except for cases provided for by the legislative acts of the Republic of Kazakhstan. If several demands are presented to the client, the bank withdraws the client’s money in the following order:

1. first of all, money is withdrawn according to executive documents providing for the satisfaction of claims for compensation for harm caused to life and health, as well as claims for the collection of alimony;

2) secondly, money is withdrawn according to executive documents providing for the withdrawal of money for settlements for the payment of severance pay and wages with persons working under an employment contract, payment of remuneration under an author's agreement, the client's obligations to transfer mandatory pension contributions, mandatory professional pension contributions to the unified accumulative pension fund and social contributions to the State Social Insurance Fund, deductions and (or) contributions to compulsory social health insurance to the social health insurance fund;

3) in the third place, money is withdrawn for the client’s obligations to the budget, as well as for the requirement to recover assets in accordance with the Law of the Republic of Kazakhstan “On the return of illegally acquired assets to the state”;

4) fourthly, money is withdrawn according to executive documents providing for the satisfaction of other monetary claims;

5) fifthly, money is withdrawn to satisfy other requirements presented to the client in order of calendar priority.

Withdrawal of money from the bank according to requirements relating to one queue is carried out in the time-based order of receipt of the relevant documents.

3. When liquidating a legal entity that is a client, satisfaction of creditors’ claims is carried out in the order of priority provided for in Article 51 of this Code.

Article 743. Provision of banking services by organizations carrying out certain types of banking operations

Organizations carrying out certain types of banking operations have the right to provide certain types of banking services.

The provision of certain types of banking services by such organizations is carried out in the manner established by this Code and the legislative acts of the Republic of Kazakhstan.

Article 744. Payment for bank services

The client pays for the bank services provided by him under the banking service agreement, on the terms and in the manner prescribed by the agreement.

Article 745. Bank secrecy

The Bank guarantees non-disclosure of banking secrecy.

The list of information constituting bank secrecy and the grounds for issuing it are determined by legislative acts regulating banking activities.

Article 746. Liability for violation of the terms of banking services to clients

For violations related to banking services to clients, banks and organizations carrying out certain types of banking operations are liable within the limits established by the legislative acts of the Republic of Kazakhstan regulating banking activities and banking service agreements.

Paragraph 2. Bank account

Article 747. Bank account agreement

1. Under a bank account agreement, one party (bank, organization carrying out certain types of banking operations) undertakes to accept money received in favor of the other party (client), carry out the client’s orders to transfer (issue) the corresponding amounts of money to the client or third parties and provide other services provided for by the bank account agreement.

It is permissible to open a current or savings account under a bank account agreement in the name of a third party with the condition of depositing (blocking) the money located in this current or savings account, without the right of the owner of the current or savings account to carry out expenditure transactions before the occurrence or fulfillment of the conditions determined by the bank account agreement.

When opening a bank account, the client or the person indicated by him for the purpose of accounting for the client’s money in the bank (an organization carrying out certain types of banking operations) is assigned an individual client identification code on the terms agreed upon by the parties. The procedure for assigning, canceling a client’s individual identification code, and keeping records of client money by a bank (an organization carrying out certain types of banking operations) is determined by the banking legislation of the Republic of Kazakhstan.

2. Legal entities and citizens independently choose banks for service and have the right to enter into bank account agreements with one or several banks.

3. A bank account agreement is of unlimited duration, unless otherwise established by legislative acts or agreement of the parties.

Article 748. Form of bank account agreement

1. A bank account agreement must be concluded in writing.

2. Failure to comply with the written form of a bank account agreement entails the nullity of this agreement.

Article 749. Disposal of client money

1. The bank (an organization that carries out certain types of banking operations) withdraws the client’s money located in the bank (an organization that carries out certain types of banking operations) based on the client’s order, unless otherwise provided by legislative acts or a bank account agreement.

The bank does not have the right to determine and control the direction of use of money by the client and establish other restrictions not provided for by law on his right to dispose of money at his own discretion, unless otherwise provided by law or the bank account agreement.

2. If the money was deposited by a citizen, then the right to dispose of money located in a bank (an organization that carries out certain types of banking operations) is exercised either by the citizen himself or by the person to whom he entrusted this right.

If the money was deposited by a legal entity, then the right to dispose of the money located in the bank (an organization carrying out certain types of banking operations) is exercised by the head of this legal entity and (or) other persons authorized by him.

3. The rights of persons who, on behalf of the client, manage money located in the bank (an organization that carries out certain types of banking operations) are confirmed by the client by submitting to the bank (an organization that carries out certain types of banking operations) documents provided for by law and the agreement.

4. The bank account agreement must establish the procedure for disposing of money located in the bank (an organization carrying out certain types of banking operations). Requirements for this procedure are established by legislative acts regulating banking activities.

Article 750. Operations performed by a bank (an organization carrying out certain types of banking operations) under a bank account agreement

Footnote: Footnote. The title of Article 750 as amended by the Law of the Republic of Kazakhstan dated 07/02/2018 No. 166-VI (shall be enforced upon the expiration of ten calendar days after the day of its first official publication).

1. In accordance with the bank account agreement, the bank (an organization carrying out certain types of banking operations) is obliged (obliged):

1. ensure the availability of money upon presentation of the client’s demands;

2) accept money received in favor of the client;

3) carry out client orders to transfer money in favor of third parties;

4) execute orders of third parties to withdraw the client’s money, if this is provided for by the legislative acts of the Republic of Kazakhstan and (or) the bank account agreement;

5) accept cash from the client and issue cash to him in the manner established by the bank account agreement;

6) provide, at the client’s request, information about the amount of the client’s money in the bank (an organization carrying out certain types of banking operations) and the transactions performed in the manner prescribed by the agreement;

7) provide other banking services to the client provided for by the contract, legislation and business customs applied in banking practice.

2. A bank (an organization carrying out certain types of banking operations) is obliged (obliged) to accept money received in favor of a client, as well as to withdraw or issue the client’s money, reflecting such operations using his individual identification code no later than the day following the day the bank (an organization carrying out certain types of banking operations) receives a corresponding instruction, unless other deadlines are provided for by legislative acts and regulations of the National Bank of the Republic issued in accordance with them Kazakhstan.

Article 751. Remuneration for the use of money

For the use of money in the bank, the bank pays remuneration in the amount and manner determined by the agreement, taking into account the provisions of this article.

The amount of remuneration for the use of money placed in a current bank account cannot exceed one percent per annum.

For making non-cash payments and money transfers, the bank may pay income determined by the bank account agreement from the amount of non-cash payments and money transfers.

Article 752. Termination of a bank account agreement

1. The bank account agreement is terminated at the request of the client at any time, unless otherwise provided by law or the agreement.

2. Termination of the bank account agreement is the basis for the cancellation of the client’s individual identification code.

3. Money remaining in the bank (an organization carrying out certain types of banking operations) is issued to the client or, at his direction, is transferred (withdrawn) in favor of third parties.

Article 753. Bank accounts of banks

The rules of this chapter apply to bank accounts of banks, unless otherwise provided by legislative acts or regulatory legal acts of the National Bank of the Republic of Kazakhstan adopted in accordance with them.

Paragraph 3. Transfer of money

Article 754. Money transfer agreement

1. Under a money transfer agreement, one party (the bank) undertakes, at the direction of the other party (the client), to transfer money to a third party without assigning an individual identification code to the client.

2. The procedure for transferring money by a bank without assigning an individual identification code to the client is established by legislative acts regulating banking activities.

Article 755. Conclusion of agreements on the transfer of money

An agreement on the transfer of money without opening a bank account is considered concluded if the bank accepts for execution the client’s instructions at the time the client applies with an offer to provide him with such a banking service, unless otherwise provided by legislative acts regulating banking activities.

Paragraph 4. Bank deposit

Article 756. Bank deposit agreement

Under a bank deposit agreement, one party (the bank) undertakes to accept money (deposit) from the other party (depositor), pay remuneration for it in the amount and manner stipulated by the bank deposit agreement, and return the deposit on the terms and in the manner provided for a deposit of this type by legislative acts and the agreement.

For each type of deposit, banks for the purpose of accounting for client money

assign it an individual identification code. The procedure for assigning, canceling an individual identification code, and keeping records of the client’s money by the bank is determined by the banking legislation of the Republic of Kazakhstan.

Features of bank deposits may be established by legislative acts of the Republic of Kazakhstan regulating banking activities.

Article 757. Types of bank deposits

1. Depending on the conditions for the return of deposits, they are divided into the following types:

1. demand deposit;

2) time deposit;

2-1) savings deposit;

3) conditional contribution.

2. A demand deposit is subject to return in whole or in part upon the first request of the depositor.

3. A fixed-term deposit is made for a certain period.

In cases where a time deposit is requested by the depositor before the expiration of the established period, remuneration on the deposit is paid in the amount established for a demand deposit, unless otherwise provided by the bank deposit agreement.

4. The savings deposit is made for a certain period.

In cases where a savings deposit is requested by the depositor before the expiration of the established period, remuneration on the deposit is paid in the amount established for a demand deposit.

5. The conditional deposit is made before the occurrence of the circumstances specified in the bank deposit agreement.

In cases where a conditional deposit is requested by the depositor before the occurrence of circumstances specified in the bank deposit agreement, remuneration on the deposit is paid in the amount established for a demand deposit, unless otherwise provided by the bank deposit agreement.

Article 758. Form of bank deposit agreement

1. A bank deposit agreement must be concluded in writing that meets the requirements established by legislative acts, regulatory legal acts of the National Bank of the Republic of Kazakhstan and business customs applied in banking practice.

2. At the request of the depositor, a document certifying the deposit made can be issued either in his name or in the name of a certain third party.

3. Failure to comply with the written form of a bank deposit agreement entails the nullity of this agreement.

Article 759. Validity period of the bank deposit agreement

1. The bank deposit agreement is considered concluded from the day the deposit amount is received by the bank.

2. The bank demand deposit agreement is unlimited.

2-1. The deposit period stipulated by the bank deposit agreement may be changed when measures are applied to the bank to resolve the bank classified as an insolvent bank, in accordance with the Law of the Republic of Kazakhstan “On Banks and Banking Activities in the Republic of Kazakhstan”.

3. In the event that the depositor does not claim the amount of time deposits and (or) savings deposits after the expiration of their term, as well as the amount of the conditional deposit after the occurrence of those circumstances with which the bank deposit agreement binds the return of the deposit, the bank deposit agreement is considered extended on the terms of a demand deposit, unless otherwise provided by the agreement.

Article 760. Remuneration under a bank deposit agreement

1. The bank pays the depositor remuneration for the amount of the deposit in the amount determined by the bank deposit agreement, taking into account the provisions of this article.

1-1. The amount of interest on a demand deposit is established by the bank deposit agreement, but cannot exceed 0.1 percent per annum.

1-2. The interest rate on time and savings deposits can be fixed or floating.

The fixed interest rate is the interest rate, the amount of which cannot be reduced during the deposit period stipulated by the bank deposit agreement.

A floating interest rate is an interest rate, the amount of which changes in accordance with the conditions stipulated by the bank deposit agreement.

The calculation procedure and conditions for the floating interest rate under a bank deposit agreement are determined by the regulatory legal act of the authorized body for regulation, control and supervision of the financial market and financial organizations.

2. The bank does not have the right to change the amount of remuneration on deposits unilaterally, except in cases of increasing the amount of remuneration or extending the term of the deposit provided for in the bank deposit agreement, taking into account the specifics established by paragraph 3 of this article.

3. The amount of remuneration under a bank deposit agreement may be changed when measures are applied to the bank to resolve a bank classified as an insolvent bank, in accordance with the Law of the Republic of Kazakhstan “On Banks and Banking Activities in the Republic of Kazakhstan”.

Article 761. Procedure for payment of remuneration under a bank deposit agreement

1. Remuneration under a bank deposit agreement is paid by the bank in the manner and amount established by the bank deposit agreement.

2. Unless otherwise provided by the bank deposit agreement, remuneration on bank deposits specified in paragraph 3 of this article is paid to the depositor at his request at the end of each quarter separately from the deposit amount, and the amount of remuneration unclaimed during this period increases the amount of the deposit for which remuneration is paid.

When the deposit is returned, the depositor is paid all the remuneration due to him at that time.

3. For demand deposits, the depositor has the right to receive the remuneration due to him on the deposit separately from the deposit amount.

For time deposits, the depositor has the right to receive the remuneration due to him on the deposit separately from the amount of the deposit before the expiration of its term. Unless otherwise provided by the bank deposit agreement, the amount of interest on time deposits is recalculated in relation to the amount used by the bank for demand deposits. Upon expiration of the deposit term, the depositor has the right to receive the remuneration due to him in full, regardless of whether he requests the deposit or not (clause 3 of Article 759 of this Code).

For conditional deposits, the depositor receives the remuneration due to him separately from the deposit amount in the manner established by the bank deposit agreement.

4. Remuneration is paid within the terms and in the form provided for the return of the deposit (Article 765 of this Code).

5. Upon full return of the deposit, the depositor is paid all the remuneration due to him at that time.

Article 762. Making deposits

1. Unless otherwise provided by the bank deposit agreement, depositors make deposits both in cash and by wire transfers.

2. When depositing on demand, money can be contributed by the depositor in separate installments in any amounts and at any frequency. In this case, the calculation of remuneration for newly received amounts is carried out in relation to the amount of remuneration that was applied by the bank on the day the money was received.

For time deposits, savings deposits, as well as conditional deposits, money is contributed by the depositor in the form of a one-time contribution, unless otherwise provided by the bank deposit agreement.

Article 763. Contribution of money by third parties to the deposit

The deposit includes money received by the bank in the name of the depositor from third parties, indicating the necessary information about his individual identification code.

Article 764. Deposits in favor of third parties

1. The deposit may be made to the bank in the name of a certain third party.

Indication of the name of the citizen (Article 15 of this Code) or the name of the legal entity (Article 38 of this Code) in whose favor the deposit is made is an essential condition of the relevant bank deposit agreement.

A bank deposit agreement in favor of a citizen who has died at the time of conclusion of the agreement, or a legal entity that does not exist at that time, is void.

2. In the event of a written refusal by a third party of the rights of a depositor, the person who entered into a bank deposit agreement may exercise the rights of the depositor in relation to the money contributed by him to the deposit.

3. When making a conditional deposit in favor of a third party, he has the right to dispose of it only if the conditions stipulated by the bank deposit agreement are met. Until these conditions occur, a third party may dispose of the deposit only with the written permission of the person who made the deposit.

The terms of the deposit must be recorded in writing in the bank deposit agreement, not contradict legislative acts and have no ambiguities that make it difficult to issue the deposit.

To receive a conditional deposit, a third party provides the bank with documents confirming the fulfillment of the established conditions.

A person who has made a conditional contribution in favor of a third party has the right to: change the condition established by him in the event that the third party does not submit a document confirming the fulfillment of this condition; dispose of the deposit in the event that a third party fails to fulfill the condition specified when making the deposit, or if he dies before the condition stipulated in the bank deposit agreement is fulfilled.

4. The rules on an agreement in favor of a third party (Article 391 of this Code) apply to a bank deposit agreement in favor of a third party, unless this contradicts the rules of this article.

Article 765. Return of bank deposits

1. The bank is obliged to issue the deposit or part thereof upon the first request of the depositor:

1. for demand deposits - upon receipt of the depositor’s demands;

2) for time and savings deposits - upon the maturity date stipulated by the bank deposit agreement;

3) for conditional deposits - in the presence of circumstances with the occurrence of which the bank deposit agreement binds the return of the deposit.

2. The depositor has the right to an early partial and (or) full return of the time deposit.

The depositor has the right to an early full return of the savings deposit.

2-1. The bank is obliged to issue a fixed-term or conditional deposit or part thereof no later than seven calendar days from the date of receipt of the depositor’s request.

The bank is obliged to issue a savings deposit no earlier than thirty calendar days from the date of receipt of the depositor’s request.

3. For conditional deposits, the depositor has the right to return the deposit before the occurrence of circumstances with which the bank deposit agreement binds the return of the deposit. In this case, the bank is obliged to issue the deposit or part of it within the time limits provided for in part one of paragraph 2-1 of this article.

4. The provision of the bank deposit agreement on the depositor’s waiver of the right to early receipt of a time deposit, as well as a conditional deposit before the stipulated conditions occur, is void.

5. A deposit made in foreign currency must be returned in the same currency, unless otherwise provided by legislative acts, a bank deposit agreement or an additional agreement of the parties.

6. If the bank fails to comply with the depositor’s request to return the deposit or part thereof within the time limits provided for in paragraph 2-1 of this article, the payment of remuneration continues on the terms provided for in the bank deposit agreement.

6-1. The rules of this article do not apply to deposits that are the subject of a pledge, deposits, the return of which is limited by the requirements of the Law of the Republic of Kazakhstan "On Housing Relations", as well as to deposits accumulated through the use of payments of targeted savings from the unified accumulative pension fund in order to improve housing conditions and (or) pay for education, with the exception of their return in cases provided for by the legislation of the Republic of Kazakhstan.

7. The issuance of a bank deposit may be suspended on the grounds and in the following order:

1. provided for by the Law of the Republic of Kazakhstan “On combating the legalization (laundering) of proceeds from crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction”;

2. provided for by the Law of the Republic of Kazakhstan “On Banks and Banking Activities in the Republic of Kazakhstan”, when applying measures to resolve a bank classified as an insolvent bank, or depriving a bank of a license.

Article 766. Ensuring the return of a bank deposit

The means and methods that the bank is obliged to use to ensure the return of deposits received by it are determined by the laws of the Republic of Kazakhstan and the bank deposit agreement.

Article 767. Payment for bank services for performing transactions on a bank deposit

The depositor pays for the bank’s services for performing transactions on a bank deposit in the manner prescribed by the agreement.

Chapter 39. Storage

Paragraph 1. General provisions on storage

Article 768. Storage agreement

1. Under a storage agreement, one party (custodian) undertakes to store the thing transferred to it by the other party (bailor) and return this thing safely.

2. A storage agreement is recognized as concluded from the moment the item is transferred for storage.

3. This chapter does not apply to the protection of real estate.

Article 769. Agreement on accepting a thing for storage

1. A custodian who carries out storage as a business activity may undertake a contractual obligation to accept for storage the things of the bailor and to store the things transferred by the bailor in accordance with the provisions of this chapter.

2. A custodian who has undertaken an obligation under a contract to accept a thing for storage does not have the right to demand that this thing be transferred to him for storage. However, a bailor who fails to transfer a thing for storage within the period stipulated by the contract is liable to the custodian for losses caused in connection with the failed storage, unless otherwise provided by legislative acts or the contract.

3. The bailor is released from liability for failure to transfer the thing for storage if he declares his refusal to serve the custodian within a reasonable time.

4. Unless otherwise provided by the contract, the custodian is released from the obligation to accept the thing for storage in cases where the thing is not transferred for storage within the period stipulated by the contract, and when this period is not determined - after thirty days from the date of conclusion of the contract.

Article 770. Obligation to accept a thing for storage

A custodian who carries out storage due to his business activities does not have the right to refuse to accept a thing for storage if technical capabilities are available, unless otherwise established by legislative acts. In such cases, storage agreements are recognized as public (Article 387 of this Code).

Article 771. Storage of things with depersonalization

1. When storing things with depersonalization, things accepted for storage may be mixed with things of the same kind and quality of other bailors. The bailor is returned an equal or stipulated quantity of things of the same kind and quality.

2. When storing things with depersonalization, things must be separated from things of the same kind and quality, if this is established by legislative acts or by agreement of the parties.

Article 772. Form of storage agreement

1. A storage agreement must be concluded in writing, with the exception of handing over items for short-term storage to storage rooms and cloakrooms at stations, airports, institutions, enterprises, theaters, museums, stadiums, canteens, etc. with the issuance by the custodian of numbers, tokens and other legitimation signs.

2. The written form of the agreement is considered to be complied with if the acceptance of things for storage is certified by the custodian by issuing to the depositor a safekeeping receipt, receipt, certificate, or other document signed by the custodian.

3. A storage agreement in the form of a household service may be concluded orally.

4. In case of a dispute about the identity of the thing accepted for storage and the thing returned by the custodian, witness testimony is allowed.

5. Depositing an item for storage in emergency circumstances (fire, flood, etc.) in the absence of a written form of agreement can be proven by testimony, regardless of the value of the item deposited for storage.

Article 773. Storage period

1. If a thing is deposited on demand or without specifying a period, the depositary has the right, after the expiration of the usual storage period for the thing under the given circumstances, to demand that the bailor accept the thing back, but is obliged to provide the bailor with a reasonable period of time sufficient to accept the thing.

2. The bailor has the right to demand the thing from the custodian at any time, even if the agreement provided for a different storage period. However, in this case, the bailor is obliged to compensate the custodian for losses caused by the early termination of the obligation, unless otherwise provided by the agreement.

Article 774. Remuneration and reimbursement of expenses to the custodian

1. The amount of remuneration to the custodian under a storage agreement is determined by agreement of the parties. In cases established by legislative acts, the amount of remuneration may be determined by taxes, rates, and tariffs.

2. Free storage may be stipulated by agreement of the parties or legislative acts. In case of gratuitous storage, the bailor is obliged to reimburse the custodian for the necessary expenses actually incurred to preserve the thing.

3. Unless otherwise provided by legislative acts or agreement of the parties, remuneration for storage must be paid to the custodian upon completion of storage, and if payment is provided for periods, at the end of each period. If storage is terminated before the expiration of the storage period specified in the contract, then the custodian must be paid a proportionate part of the remuneration.

4. If, after the expiration of the period stipulated by the contract, the thing in storage is not taken back by the bailor, then he is obliged to pay the custodian a fee for further storage of the thing in the same amount.

5. Unless otherwise provided by the contract, storage costs are included in the remuneration amount. It is assumed that extraordinary expenses are not included in the amount of remuneration or in the expenses stipulated by the contract.

Article 775. Obligations of the custodian to ensure the safety of things

1. The custodian is obliged to take all measures provided for in the contract, as well as other necessary measures to ensure the safety of the thing transferred to him.

2. If storage is carried out free of charge, the custodian is obliged to take care of the thing accepted for storage as if it were his own thing.

3. The item must be returned in the condition in which it was accepted for storage, taking into account its natural deterioration or natural loss.

4. The custodian does not have the right to use the thing, except in cases where this is provided for by the contract, and also if the use of the thing is necessary to ensure its safety.

5. Simultaneously with the return of the thing, the custodian is obliged to transfer the fruits and income received during its storage, unless otherwise provided by the contract.

Article 776. Change of storage conditions

1. If it is necessary to change the conditions of storage of a thing provided for in the storage agreement, the custodian is obliged to immediately notify the bailor about this and wait for his response.

2. In the event that there is a danger of loss or damage to the thing, the custodian is obliged to change the method and place of storage provided for in the contract, without waiting for the bailor’s response (clause 1 of this article).

3. If a thing has been damaged during storage or other circumstances have arisen that do not allow its safety to be ensured, and the bailor cannot be expected to take action, the bailee has the right to sell the thing or part of it with reimbursement of his expenses for storage and sale.

Article 777. Transfer of a thing for storage to a third party

1. Unless otherwise provided by legislative acts or an agreement, the custodian does not have the right to transfer the thing for storage to a third party without the consent of the bailor, unless this becomes necessary in the interests of the bailor and the custodian is deprived of the opportunity to obtain his consent. The custodian is obliged to immediately notify the bailor of the transfer of the thing to a third party.

2. The custodian is responsible for the actions of the third party to whom he transferred the thing for storage.

Article 778. Responsibility of the custodian for failure to preserve a thing

The custodian is responsible for the loss, shortage or damage of the item accepted for storage. He is released from liability if he proves that the loss, shortage or damage of the item was not due to his fault.

Article 779. Responsibility of the custodian-entrepreneur

1. A person who carries out storage due to his entrepreneurial activity is released from liability for failure to preserve a thing only in cases where the loss, shortage or damage of the thing is caused by force majeure or the properties of the thing itself, or by the intent or gross negligence of the bailor.

2. If, after the expiration of the storage period provided for in the contract, or the period specified by the custodian in the manner established in Article 773 of this Code, the thing is not taken back by the bailor, the custodian is liable for the loss, shortage or damage of this thing only if there is intent or gross negligence on his part.

Article 780. Amount of liability of the custodian

1. Losses caused to the bailor by the loss, shortage or damage of the thing shall be compensated by the bailee in accordance with Article 350 of this Code, unless otherwise provided by legislative acts or agreement.

2. If, upon depositing, an assessment was made of the thing specified in the contract or other written document issued by the custodian, the liability of the custodian is determined based on the amount of the assessment.

3. In case of gratuitous storage, losses caused to the bailor by loss, shortage or damage to the thing are compensated:

1. for loss or shortage of an item - in the amount of the cost of the lost or missing item;

2) for damage to a thing - in the amount by which its value has decreased.

4. If, as a result of damage for which the custodian is responsible, the quality of the thing has changed so much that it cannot be used for its original purpose, the bailor has the right to refuse it and demand that the custodian reimburse the cost of this thing, as well as compensation for other losses, unless otherwise provided by legislative acts or the contract.

Article 781. Consequences of violating the deadlines for receiving a thing

1. The depositor is obliged, after the expiration of the period specified in Article 773 of this Code, to take back the thing deposited.

2. If the bailor evades receiving his thing, the custodian has the right to demand, after warning at least a month in advance, the sale of the thing in the manner prescribed by the Civil Procedure Code of the Republic of Kazakhstan, unless otherwise provided by legislative acts or agreement.

3. The proceeds from the sale of the thing are transferred to the bailor minus the amounts due to the custodian.

Article 782. Compensation for losses caused to the custodian

The bailor is obliged to compensate the custodian for losses caused by the properties of the thing if the custodian, when accepting the thing for storage, did not know and should not have known about these properties.

Article 783. Application of general provisions on storage to its individual types

General provisions on storage apply to its individual types, unless otherwise established by the rules on individual types of storage provided for in Articles 784-802 of this Code and (or) other legislative acts.

Paragraph 2. Certain types of storage

Article 784. Storage in a pawnshop

1. An agreement to store an item in a pawnshop is formalized by the pawnshop issuing a personal safe receipt.

2. An item deposited in a pawnshop is subject to valuation by agreement of the parties in accordance with the prices for an item of this kind and quality, usually established in trade at the time and place of its acceptance for storage.

3. The pawnshop is obliged to insure in favor of the bailor the item accepted for storage in the full amount of its valuation, made in accordance with paragraph 2 of this article.

Article 785. Item unclaimed from a pawnshop

1. If the bailor evades the return of the item, the pawnshop is obliged to store it for three months. After this period, the unclaimed item may be sold by a pawnshop in the manner established by paragraph 2 of Article 781 of this Code.

2. The amount received from the sale of the item covers the storage fee and other payments due to the pawnshop. The remainder of the amount is returned by the pawnshop to the owner of the safe receipt upon presentation.

Article 786. Storing valuables in a bank

1. The bank may accept securities, precious metals, stones and other valuables, as well as documents, for storage.

2. An agreement for storing valuables in a bank is formalized by the bank issuing to the depositor a personal security document, the presentation of which is the basis for the bank to issue the stored valuables to the depositor or his representative.

3. An agreement for storing valuables using an individual bank safe (safe deposit box, separate storage room) can be concluded by the bank taking actions to accept valuables for storage and issuing to the depositor a key to the safe, a card identifying the depositor, another sign or document that certifies the bearer’s right to access the safe and receive valuables from it.

4. Unless otherwise provided by the contract, the depositor has the right at any time to remove valuables from the safe, return them, and work with stored documents. The bank has the right to record the receipt and return of valuables by the depositor.

5. When a depositor, including a temporary one, receives part of the valuables from the safe, the bank is responsible for the safety of the remaining part of the valuables.

6. The rules established by this article for storing valuables in a bank safe do not apply to cases when the bank provides its safe (safe deposit box, separate storage room) to another person for use on the terms of a property lease.

Article 787. Storage in storage rooms of transport organizations

1. Luggage storage facilities operated by transport organizations are required to accept for storage the belongings of passengers and other citizens, regardless of whether they have travel documents. A contract for storage in storage rooms of transport organizations is recognized as public (Article 387 of this Code).

2. To confirm the acceptance of the item for storage in storage rooms (except for automatic ones), the depositor is given a receipt or a numbered token. In case of loss of a receipt or token, the items deposited in the storage room are returned to the depositor upon presentation of evidence of ownership of these items.

3. The amount of losses incurred by the bailor as a result of the loss, shortage or damage of an item deposited in a storage room shall be paid to the depositor within 24 hours if, when the item was deposited, it was assessed or if the parties agreed on the amount of damages to be compensated.

4. Things can be placed in storage rooms for a period within the limits established by special rules or agreement of the parties. Items not claimed within the specified time frame must be stored in the storage room for another three months. After this period, unclaimed items may be sold, and the proceeds from the sale distributed in accordance with Article 781 of this Code.

Article 788. Storage in wardrobes of organizations

1. Storage in the wardrobes of organizations is assumed to be free of charge, if remuneration for storage is not agreed upon when depositing the item for storage.

2. In confirmation of acceptance of the item for storage in the wardrobe, the custodian issues the depositor with a numbered token or other sign confirming acceptance of the item for storage.

3. The item handed over to the cloakroom is given to the bearer of the token. In this case, the custodian is not obliged to check the authority of the bearer of the token to receive the thing. However, the custodian has the right to delay the return of the item to the bearer of the token if he has doubts about the ownership of the token to its bearer.

4. The depositary has the right to hand over an item from the wardrobe even when the depositor has lost the token, but the fact that he handed over the item to the wardrobe or belonging to the depositor is not in doubt by the depositor or is proven by the depositor.

Article 789. Storage in a hotel

1. The hotel is liable as a custodian and without special agreement for the loss or damage of things, with the exception of money, other currency valuables and securities brought into the hotel by a person residing there, except in cases where the loss or damage occurred due to force majeure, the properties of the thing itself or through the fault of the resident himself, persons accompanying him or his visitors.

2. The hotel is responsible for the loss of money, other currency values ​​and securities only if they were accepted for storage.

3. A person residing in a hotel who discovers the loss or damage of his belongings is obliged to immediately report this to the hotel administration. Otherwise, the hotel is released from liability for failure to preserve items.

4. The hotel is not exempt from liability for the failure to preserve the belongings of its residents, even if it makes an announcement that it does not accept this responsibility.

5. The rules of this article also apply to storage in motels, rest homes, sanatoriums, hostels and similar organizations, as well as in organizations that have specially designated places for storing outerwear, hats and other similar things of citizens visiting the organization.

Article 790. Storage of controversial items (sequestration)

1. Under a sequestration agreement, two or more persons between whom a dispute has arisen about the right to a thing transfer the disputed thing to a third party, who undertakes, upon resolution of the dispute, to return the thing to the person to whom it will be awarded by a court decision or by agreement of all the disputing persons (contractual sequestration).

2. A disputed item may be transferred for storage through sequestration by a court decision (judicial sequestration).

The custodian for judicial sequestration can be either a person appointed by the court or a person determined by mutual agreement of the disputing parties. In both cases, the custodian's consent is required, unless otherwise provided by law.

3. Both movable and immovable things can be transferred for storage under the procedure of sequestration.

Paragraph 3. Storage in a warehouse

Article 791. Warehouse

A commodity warehouse is a commercial organization that stores goods and provides storage-related services as a business activity.

Article 792. Public warehouse

1. A commodity warehouse is recognized as a public warehouse if, in accordance with legislative acts, it is not classified as a warehouse that can accept goods for storage from a limited number of persons.

2. A warehousing agreement concluded by a public goods warehouse is recognized as a public contract (Article 387 of this Code).

Article 793. Obligations of a warehouse

1. A commodity warehouse is obliged to comply with the storage conditions (regime) established in standards, technical specifications, technological instructions, storage instructions, storage rules for certain types of goods, and other special regulatory documents mandatory for the warehouse.

2. The warehouse is obliged to inspect the goods at its own expense upon acceptance for storage.

3. The warehouse is obliged to provide the goods owner with the opportunity to inspect the goods or their samples, if storage is carried out with de-identification, take samples and take measures necessary to ensure the safety of the goods.

4. In the event that, to ensure the safety of goods, it is necessary to urgently change storage conditions, the warehouse has the right to take the required urgent measures independently. He is obliged to notify the goods owner of the measures taken.

5. If damage to the goods is detected, the warehouse is obliged to immediately draw up a report and notify the goods owner at the address he declared to the warehouse.

Article 794. Requirements of the goods owner for the warehouse

Unless otherwise provided by the contract, the goods owner is obliged to report to the warehouse about the loss, shortage or damage to the goods resulting from improper storage upon receipt of the goods from the warehouse, and about hidden damage - within the usual period necessary for their discovery. If damage and shortage of goods is not reported to the warehouse within the appropriate time frame, the warehouse is not liable for losses, except in cases where the losses were caused due to its intent or gross negligence.

Article 795. Reimbursement of warehouse storage expenses

The warehouse has the right to reimbursement of the rates of expenses provided for in the contract or established by legislative acts for additional operations carried out in the interests of the depositor (insurance of goods, loading and unloading operations, payment of customs duties, etc.). This right is ensured by the warehouse's right to retain the stored goods.

Article 796. Refusal of a storage agreement by a warehouse

The warehouse has the right to refuse to fulfill the storage agreement in cases where the bailor concealed the dangerous nature of the goods, which threatens to cause significant damage.

Article 797. Warehouse documents

1. Commodity warehouses may issue the following warehouse documents to confirm the acceptance of goods for storage:

1. simple warehouse receipt;

2) double warehouse certificate.

1-1. In cases provided for by the legislative acts of the Republic of Kazakhstan, commodity warehouses are required to issue double or simple warehouse certificates to confirm the acceptance of de-identified goods for storage.

2. A double warehouse receipt, each part thereof and a simple warehouse receipt are securities.

3. Double and simple warehouse receipts can be pledged.

Article 798. Simple warehouse receipt

1. A simple warehouse receipt is issued to bearer.

2. A simple warehouse receipt must contain the information provided for in subparagraphs 2), 3), 5)-10) of paragraph 2 of Article 799 of this Code, as well as an indication that it is issued to bearer.

Article 799. Double warehouse certificate

1. A double warehouse receipt consists of a warehouse receipt and a pledge certificate (warrant), which

identical in content and, if necessary, separable from one another.

2. Each part of the double warehouse receipt must indicate:

1. name of the relevant part of the double warehouse receipt;

2) name and address of the warehouse that accepted the goods for storage;

3) the current number of the warehouse certificate according to the warehouse register;

4) the name of the organization or the name of the citizen from whom the goods were accepted for storage, as well as the location (place of residence) of the goods owner;

5) name and quantity of goods, number of packages;

6) the amount of goods accepted, unless otherwise established by the legislative acts of the Republic of Kazakhstan;

7) the period for which the goods are accepted for storage, if one is established;

8) tariffs and payment procedures for storage;

9) date of issue of the warehouse certificate;

10) signature of an authorized person and seal of the warehouse (if available).

Legislative acts of the Republic of Kazakhstan may establish additional requirements for the form and content of a double warehouse receipt.

Article 800. Rights of the holder of a double warehouse receipt for goods

1. The holder of a double warehouse certificate has the right to dispose of the goods stored in the warehouse in full.

2. The holder of a warehouse certificate, separated from the pledge certificate, has the right to dispose of the goods, but cannot take it from the warehouse until the loan issued under the pledge certificate is repaid. The holder of a warehouse certificate can transfer ownership of the stored goods by issuing an endorsement (endorsement) and delivering the document itself, but without moving the goods.

3. The buyer who has received, by endorsement, a warehouse certificate with a pledge certificate not separated from it, becomes the owner of the warehouse goods, free of pledge. When purchasing a warehouse receipt without a pledge certificate, it is assumed that the ownership of the goods is encumbered by a pledge right. Information about the terms of the pledge (the amount and period for establishing the pledge right to the goods) can be obtained in the warehouse register, open for viewing by interested parties.

4. The holder of a pledge certificate has a pledge right to the goods in the amount of the loan issued under this certificate and the remuneration thereon. When establishing liens on goods, a note is made about this on the warehouse receipt.

5. The buyer or seller may release the goods from the pledge by paying the appropriate amount secured by the pledge to the pledgee (creditor) or warehouse, which is obliged to transfer it to the legal holder of the pledge certificate.

6. The holder of the pledge certificate, in the event of failure to satisfy his claim secured by the pledge in time, has the right to sell the goods pledged to him under the pledge certificate in accordance with the procedure established by legislative acts and cover his claim primarily before other creditors of the pledgor. If the proceeds are insufficient, the holder of the pledge certificate may recover the shortfall from all endorsers who are jointly and severally liable for payment of the claim secured by the pledge certificate.

Article 801. Transfer of warehouse and pledge certificates

The warehouse receipt and the pledge certificate can be transferred together or separately using endorsements (endorsements).

Article 802. Issue of goods under a double warehouse certificate

1. The warehouse releases the goods to the holder of the warehouse and pledge certificate (double warehouse certificate) in exchange for both of these certificates together.

To the holder of a warehouse certificate, who does not have a certificate of pledge, but has paid the amount of debt under it, the goods are issued by the warehouse only in exchange for a warehouse certificate and subject to payment of the entire amount of debt under the certificate of pledge.

2. The holder of warehouse and pledge certificates has the right to demand the delivery of goods in parts. At the same time, in exchange for the initial certificates, he is issued new certificates for the goods remaining in the warehouse.

3. A warehouse that, contrary to the requirements of this article, has released goods to the holder of a warehouse certificate who does not have a certificate of pledge and has not paid the amount of debt under it, shall be liable to the holder of the certificate of pledge for payment of the entire amount due under it.

Chapter 40. Insurance

Article 803. Insurance contract

1. Under an insurance contract, one party (the policyholder) undertakes to pay an insurance premium, and the other party (the insurer) undertakes, upon the occurrence of an insured event, to make an insurance payment to the insured or another person in whose favor the contract was concluded (the beneficiary), within the limits of the amount specified in the contract (insurance amount).

Legislative acts of the Republic of Kazakhstan may provide for cases of making other payments in the manner and under the conditions provided for by the insurance contract.

2. Insurance is carried out on the basis of an insurance contract.

Article 804. Insurance relations regulated by this Code

This Code regulates the relations between the insurer and the policyholder, as well as their relations with the insured and beneficiaries that arise in the process of concluding and executing an insurance contract.

Article 805. Forms of insurance

1. The forms of insurance are:

1. according to the degree of obligation - voluntary and mandatory;

2) for the object of insurance - personal and property;

3) on the basis of the insurance payment - cumulative and non-cumulative.

2. For the purpose of licensing insurance activities, legislative acts may provide for a different classification.

Article 806. Compulsory and voluntary insurance

1. Compulsory insurance:

1. insurance carried out in accordance with the requirements of legislative acts, the types, conditions and procedure of which are established by separate legislative acts of the Republic of Kazakhstan regulating compulsory types of insurance, with the exception of public relations in the field of compulsory social insurance.

2) insurance, in which the requirement for compulsory insurance, types and minimum conditions of insurance (including the object of insurance, insurance risks and minimum amounts of insurance) are established by the legislative acts of the Republic of Kazakhstan, and other conditions and procedure for insurance are determined by agreement of the parties (imputed insurance).

2. The obligation to insure one’s life or health cannot be imposed on a citizen either by legislative acts of the Republic of Kazakhstan or by agreement.

Compulsory insurance is carried out at the expense of the policyholder.

Compulsory insurance, the types, conditions and procedure of which are established by a separate legislative act of the Republic of Kazakhstan regulating the compulsory type of insurance, can be introduced subject to economic feasibility, mass scale and social and public significance.

3. In cases where the obligation to insurance does not arise from a legislative act of the Republic of Kazakhstan, but is based on an agreement, such insurance is not mandatory and does not entail the consequences provided for in Article 808 of this Code.

4. When concluding a compulsory insurance agreement, the types, conditions and procedure of which are established by a separate legislative act of the Republic of Kazakhstan regulating the compulsory type of insurance, the policyholder is obliged to enter into an agreement with the insurer on the terms prescribed by this legislative act of the Republic of Kazakhstan.

In case of imputed insurance, the contract with the insurer is concluded on the terms determined by agreement of the parties, in compliance with the minimum conditions established by the legislative acts of the Republic of Kazakhstan.

5. A compulsory insurance contract, the types, conditions and procedure of which are established by a separate legislative act of the Republic of Kazakhstan regulating the compulsory type of insurance, can only be concluded with an insurer licensed to provide this type of insurance. The conclusion of a compulsory insurance contract, the types, conditions and procedure of which are established by a separate legislative act of the Republic of Kazakhstan regulating the compulsory type of insurance, is mandatory for an insurer licensed to carry out this type of insurance, except for cases provided for by the laws of the Republic of Kazakhstan.

6. Voluntary insurance – insurance carried out by virtue of the will of the parties.

The types, conditions and procedure for voluntary insurance are determined by agreement of the parties.

Article 807. Object of insurance

1. The objects of property and personal insurance can be any property interests of citizens and legal entities, including those related to:

1. the survival of citizens to a certain age or period established by the insurance contract, death, the occurrence of certain events in the life of citizens;

2) causing harm to the life and health of citizens as a result of accidents and other events, diseases;

3) possession, use and disposal of property;

4) the obligation to compensate for damage caused to other persons, including as a result of violation of the contract (obligations).

The insurance object for compulsory insurance is determined by the legislative acts of the Republic of Kazakhstan.

2. Illegal property interests of the insured are not subject to insurance.

3. Insurance contracts, the object of which is the property interests provided for in paragraph 2 of this article, or in which there is no object of insurance, are void.

Article 808. Consequences of violating the rules on compulsory insurance

1. A person in whose favor compulsory insurance must be carried out in accordance with legislative acts has the right, if he becomes aware that he is not insured, to demand insurance in court from the person charged with this obligation.

2. If the person entrusted with the obligation of insurance has not carried it out or has entered into an insurance contract on conditions that worsen the position of the insured in comparison with that provided for by legislative acts, this person, upon the occurrence of an insured event, shall be liable to the insured under the same conditions on which the insurance payment should have been made with proper insurance.

3. A person who is entrusted by legislative acts with the obligation to act as an insured has the right to demand in court to compel the insurer, who is obliged in accordance with paragraph 5 of Article 806 of this Code to carry out insurance, but is evading it, to conclude an insurance contract on the terms provided for by legislative acts.

4. Evasion of insurance by a person obligated to carry it out as an insured, as well as by an insurance organization obligated to act as an insurer, entails liability provided for by legislative acts.

Article 809. Personal and property insurance

1. Personal insurance includes insurance of life, health, disability and other property interests related to the personality of a citizen.

Under a personal insurance contract, both the policyholder himself and another person named in the contract (the insured) can be insured.

2. Property insurance includes insurance of property and related property interests.

3. When insuring property, the risk of loss (destruction), shortage or damage to property and other property benefits and rights provided for in Article 115 of this Code is insured.

4. A property insurance contract concluded when the policyholder or beneficiary has no interest in preserving the insured property may be declared invalid by the court.

5. Civil liability insurance insures the risk of liability for obligations arising from causing harm to the life, health or property of third parties, as well as liability for obligations arising from contracts.

Article 809-1. Endowment insurance

1. Cumulative insurance is insurance that provides for the payment of an insurance payment upon the occurrence of an insured event, including after the expiration of the period established by the insurance contract or another event provided for by the insurance contract, depending on which one occurs first.

2. Non-cumulative insurance is insurance that provides for the implementation of insurance payment only upon the occurrence of an insured event that has the characteristics provided for in paragraph 3 of Article 817 of this Code.

3. An annuity insurance contract is an insurance contract, according to which the insurer is obliged to make insurance payments in the form of periodic payments in favor of the beneficiary within the period established by the contract.

4. Endowment insurance contracts can be concluded exclusively for personal insurance.

5. An annuity insurance contract refers to accumulative insurance contracts.

Article 810. Business risk insurance

Footnote: Footnote. The article was excluded by the Law of the Republic of Kazakhstan dated February 20, 2006 No. 128 (the order of enforcement see Art. 2).

Article 811. Insurance of civil liability for causing harm

Footnote: Footnote. The article was excluded by the Law of the Republic of Kazakhstan dated February 20, 2006 No. 128 (the order of enforcement see Art. 2).

Article 812. Insurance of civil liability under the contract

Footnote: Footnote. The article was excluded by the Law of the Republic of Kazakhstan dated February 20, 2006 No. 128 (the order of enforcement see Art. 2).

Article 813. Policyholder

1. Policyholder - a person who has entered into an insurance agreement with the insurer.

2. Policyholders can be legal entities and citizens.

3. The policyholder is free to choose an insurer for both voluntary and compulsory forms of insurance, unless otherwise established by separate legislative acts of the Republic of Kazakhstan regulating compulsory types of insurance.

Article 814. Insurer

Insurer is a person who carries out insurance, that is, is obliged, upon the occurrence of an insured event, to make an insurance payment to the policyholder or another person in whose favor the contract is concluded (the beneficiary), within the limits of the amount specified in the contract (the insured amount).

An insurer can only be a legal entity registered as an insurance organization and licensed to carry out insurance activities, or a mutual insurance company in accordance with the Law of the Republic of Kazakhstan “On Mutual Insurance” or the Export Credit Agency of Kazakhstan in accordance with the Law of the Republic of Kazakhstan “On Regulation of Trade Activities.”

Article 815. Insured

1. Insured - the person in respect of whom insurance is carried out.

Unless otherwise provided by the contract, the policyholder is at the same time the insured.

2. Legislative acts may impose on the policyholder the obligation to provide insurance to a third party. In case of voluntary insurance, the policyholder may designate a third party as the insured in the insurance contract. In these cases, the object of insurance is either the person of the insured and his related interests (personal insurance of the insured), or the property of the insured and property interests (property insurance of the insured).

When insuring property, the insured, who is not the policyholder, must have an interest in the preservation of this property.

3. If, under the terms of the contract, certain responsibilities are assigned to the insured who is not the policyholder, the policyholder must obtain the consent of the insured to enter into this contract.

With compulsory insurance, as well as with group impersonal insurance, the consent of a third party to conclude an agreement in which he will be identified as the insured is not required.

In case of voluntary insurance, a person’s objection regarding his personal or property insurance entails the impossibility of concluding a contract, and if it has already been concluded, termination of the contract.

4. If the insured is obligated to insure a third party, this person has the right to demand from the insured a report on the fulfillment of this obligation, and in cases provided for by legislative acts, to receive a document indicating that he is the insured.

If the policyholder fails to fulfill or improperly fulfills his obligation to insure a third party, the latter has the right to apply the measures provided for in paragraphs 1 and 2 of Article 808 of this Code.

5. If the insured person is a minor, his rights are exercised in the manner prescribed by Articles 22-24 of this Code.

6. The conclusion of an agreement in favor of the insured does not relieve the insured from fulfilling obligations under this agreement.

Third party insurance is carried out at the expense of the policyholder.

7. If the insured refuses to receive the insurance payment due to him in accordance with the contract, the right to receive the insurance payment passes to the policyholder.

8. In the event of the death of an insured who is not the policyholder, in respect of whom a personal insurance contract has been concluded that does not provide for such a case, this contract is subject to termination, unless legislative acts or the contract provide for the replacement of the insured.

If the death of the insured was an insured event that is provided for in the insurance contract, this contract is executed on the terms stipulated by it.

In the event of the death of an insured who is not the policyholder, in respect of whom a property insurance contract has been concluded, the rights and obligations of the insured, with the consent of the policyholder, pass to the heirs of the property and those property rights of the insured that were the object of insurance, unless otherwise provided by legislative acts or the contract.

If the policyholder does not agree to replace the deceased insured or the heirs of the insured do not agree to accept his rights and obligations arising from the insurance contract, this contract is subject to termination.

9. An insurance contract in favor of a third party (the insured) is subject to the provisions of Article 391 of this Code to the extent that they do not contradict the provisions of this article.

Article 816. Beneficiary

1. Beneficiary - a person who, in accordance with the insurance contract or legislative acts of the Republic of Kazakhstan, is the recipient of the insurance payment.

The beneficiary can be both a legal entity and a citizen.

A beneficiary can be appointed for both personal and property insurance.

In case of compulsory insurance, the types, conditions and procedure of which are established by a separate legislative act of the Republic of Kazakhstan regulating the compulsory type of insurance, the beneficiary is determined by this legislative act of the Republic of Kazakhstan, in case of imputed insurance - by the legislative acts of the Republic of Kazakhstan or by agreement of the parties. For voluntary types of insurance, the beneficiary is appointed by the policyholder.

2. Unless otherwise provided by the legislative acts of the Republic of Kazakhstan or the insurance contract, the beneficiary is the policyholder.

If the policyholder is not the insured, then the beneficiary must be the insured, or he is appointed with the written consent of the insured.

If the beneficiary is not specified in the insurance contract, the insured is assumed to be the beneficiary.

5. In the case where the insured is also a beneficiary, the latter is subject to the provisions provided for in Article 815 of this Code.

6. In the event of the death of a beneficiary who is not the insured, or his refusal of the rights of the beneficiary, the rights of the latter pass to the insured.

In the event of the death of a beneficiary who is an insured person, the consequences provided for in paragraph 8 of Article 815 of this Code occur.

7. If the death of the insured was the case provided for by the insurance contract, then in the case where such an insured is not the policyholder or is one, but the contract does not indicate a beneficiary, the heirs of the insured are recognized as beneficiaries.

8. Upon the occurrence of an insured event, the beneficiary has the right to present directly to the insurer a demand for payment of the insurance payment provided for in the insurance contract.

9. The conclusion of an agreement in favor of the beneficiary does not relieve the insured from fulfilling obligations under this agreement.

Article 817. Insurable interest and insured event

Footnote: Footnote. The title of Article 817 as amended by the Law of the Republic of Kazakhstan dated 07/02/2018 No. 166-VI (shall be enforced upon the expiration of ten calendar days after the day of its first official publication).

1. The insurance contract must provide for the existence of insurable interest.

1-1. Insurable interest is the property interest of the policyholder (insured, beneficiary) in preventing risks and preventing the occurrence of an insured event, with the exception of events that may be provided for under the accumulative insurance agreement.

1-2. An insured event is an event upon the occurrence of which the insurance contract provides for the payment of an insurance payment.

2. Types of insured events for compulsory insurance are determined by the legislative acts of the Republic of Kazakhstan, and for voluntary insurance - by agreement of the parties.

3. An event considered as an insured event must have all of the following characteristics (with the exception of events that may be provided for under an accumulative insurance agreement):

probability and randomness of the occurrence of an event;

unpredictability regarding the specific time or place of the occurrence of the event, as well as the amount of losses as a result of the occurrence of the event;

there is no danger that an event is inevitable and objectively bound to occur within the scope of the contract, which the parties or at least the policyholder knew or were aware of in advance;

the occurrence of an event has negative, unfavorable economic consequences for the property interest of the insured (insured, beneficiary);

the occurrence of an event is not associated with the will and (or) intention of the policyholder (insured, beneficiary) and does not provide for the goal of extracting benefits and (or) obtaining winnings (speculative risk).

4. Proving the occurrence of an insured event, as well as the losses caused by it, lies with the policyholder (beneficiary, insured).

Article 818. Insurance premiums

1. Insurance premium is the amount of money that the policyholder is obliged to pay to the insurer for the latter’s acceptance of the obligation to make an insurance payment to the policyholder (beneficiary) in the amount determined by the insurance contract.

The insurance premiums received by the insurer from the policyholder belong to him by right of ownership, with the exception of part of the insurance premiums received from policyholders for investment purposes, and income (expenses) received (incurred) from their investment, under insurance contracts that provide for the condition of the policyholder's participation in investments, as well as the case provided for in paragraph 3 of Article 845-1 of this Code.

2. The amount of insurance premiums is established by the contract. In case of compulsory insurance, the amounts of insurance premiums are established by a separate legislative act of the Republic of Kazakhstan regulating the compulsory type of insurance.

The procedure and terms for payment of insurance premiums are determined by the contract. In case of compulsory insurance, they can be determined by the legislative acts of the Republic of Kazakhstan.

3. When determining the amount of insurance premiums payable under an insurance contract, the parties may apply insurance tariffs developed by the insurer, which determine the rate of the insurance premium charged per unit of insurance amount, taking into account the object of insurance and the nature of the insurance risk.

4. The contract may provide for payment of the insurance premium in installments in the form of periodic insurance premiums.

5. If the insurance contract provides for payment of the insurance premium in installments, the contract may determine the consequences of failure to pay regular insurance premiums on time, including early termination of the contract.

6. If the insured event occurred before the payment of a certain insurance premium, the payment of which is overdue, the insurer has the right to set off the amount of the overdue insurance premium when determining the amount of the insurance payment.

Article 819. Sum insured

1. Sum insured - the amount of money for which the insurance object is insured and which represents the maximum amount of liability of the insurer in the event of an insured event.

2. The amounts of insurance amounts (with the exception of annuity insurance contracts and insurance contracts that provide for the condition of the policyholder’s participation in investments) are established by the contract. With compulsory insurance, they cannot be less than the amounts established by the legislative acts of the Republic of Kazakhstan.

3. When insuring property, the insured amount cannot exceed its actual value at the time of concluding the contract (insurance value).

4. The parties cannot dispute the value of the property determined in the insurance contract, except in cases where the insurer proves that it was deliberately misled by the policyholder. If the insured amount determined by the insurance contract exceeds the insured value, it is invalid to the extent of the insured amount that exceeds the insured value at the time of concluding the contract.

Article 820. Insurance payment

1. Insurance payment - an amount of money paid by the insurer to the policyholder (beneficiary) within the limits of the insured amount upon the occurrence of an insured event or upon the occurrence of the period specified in the accumulative insurance agreement.

Insurance payment is made in a lump sum, with the exception of insurance payments under annuity insurance contracts and life insurance contracts, under which the insurance contract or the requirements of the laws of the Republic of Kazakhstan provide for payments in the form of periodic payments.

2. The procedure for determining the amount of insurance payment is established by the contract. For compulsory insurance, the procedure for determining the amount of insurance payment is established by a separate legislative act of the Republic of Kazakhstan regulating the compulsory type of insurance.

3. The procedure and timing of insurance payments are determined by the contract.

For compulsory insurance, they can be determined by the legislative acts of the Republic of Kazakhstan.

4. Insurance payment for property and civil liability insurance cannot exceed the amount of actual damage incurred by the policyholder (insured) as a result of the occurrence of an insured event.

5. Insurance payment under personal insurance is made to the policyholder (insured), regardless of the amounts due to him for social security, under other insurance contracts and in the order of compensation for harm.

6. The terms of the property insurance contract may provide for the replacement of the insurance payment with compensation for damage in kind within the limits of the amount of the insurance payment.

7. When making an insurance payment, the insurer has the right to offset the insurance premiums or insurance contributions due to it from the policyholder.

8. For untimely payment of insurance payment, the insurer is liable in accordance with Article 353 of this Code, unless a higher amount of liability is provided for by the contract or legislative acts of the Republic of Kazakhstan.

Article 821. Double insurance

1. Double (multiple) insurance - insurance of the same object with several insurers under independent contracts with each.

2. In case of double insurance of property, each insurer is liable to the policyholder within the limits of the contract concluded with him, however, the total amount of insurance payments received by the policyholder from all insurers cannot exceed the actual damage.

In this case, the policyholder has the right to receive an insurance payment from any insurer in the amount of the insured amount stipulated by the contract concluded with him. If the received insurance payment does not cover the actual damage, the policyholder has the right to receive the missing amount from another insurer.

The insurer, wholly or partially exempted from insurance payment due to the fact that the damage caused was compensated by other insurers, is obliged to return to the insured the corresponding part of the insurance premiums, minus the expenses incurred.

3. With double (multiple) personal insurance, each insurer fulfills its insurance obligations to the policyholder independently, regardless of their fulfillment by other insurers.

Article 822. Group insurance

1. In case of group insurance, one insurance contract covers several insured persons who are simultaneously beneficiaries.

2. Group insurance can be both personal and property, both personalized and impersonal, covering a certain category of persons.

With impersonal insurance, the circle of insured persons must be specified in the insurance contract to the extent necessary to individualize the insured event, its consequences in relation to each insured person and the amount of the insurance payment due to him.

3. Collective insurance by an employer of its employees can only be personal insurance.

Article 823. Co-insurance and joint reinsurance

1. The insurance object may be insured under one co-insurance agreement jointly by several insurers by creating a simple partnership (insurance pool) on the basis of a joint activity agreement (co-insurance).

The reinsurance object can be insured under one joint reinsurance agreement by several reinsurers jointly by creating a simple partnership (reinsurance pool) on the basis of a joint activity agreement (joint reinsurance).

At the same time, the co-insurance (joint reinsurance) agreement must contain conditions defining the rights and obligations of each insurer (reinsurer) in the agreed shares.

Participants in the insurance (reinsurance) pool are jointly and severally liable to the policyholder (beneficiary) or reinsurer for the obligations of the insurance (reinsurance) pool, including for making insurance payments, unless otherwise specified in the co-insurance (joint reinsurance) agreement.

2. If there is an appropriate agreement between insurers (reinsurers), one of them can represent all insurers (reinsurers) in relations with the policyholder (reinsurer).

3. The management and conduct of general affairs of the participants of the insurance (reinsurance) pool can be carried out by an insurance broker if there is an appropriate agreement with the participants of the insurance (reinsurance) pool.

Article 824. Reinsurance

1. The insurer has the right, through reinsurance, to cover the risk of fulfillment of all or part of its obligations to the insured by another insurer (reinsurer).

The objects of reinsurance may be the property interests of the reinsurer associated with the risk of making an insurance payment under an insurance (reinsurance) agreement concluded by him as an insurer (reinsurer).

Illegal property interests of the reinsurer are not subject to reinsurance.

Reinsurance contracts, the object of which are the unlawful property interests of the reinsurer or in which there is no reinsurance object, are void.

2. The insurer who has entered into a reinsurance agreement with the reinsurer (the reinsurer) remains liable to the insured in full in accordance with the insurance agreement concluded with him.

3. The conditions of reinsurance are determined by the legislative acts of the Republic of Kazakhstan and the reinsurance agreement between the reinsurer and the reinsurer.

The reinsurance contract must meet the requirements of this Code for the insurance contract. An Islamic reinsurance contract must meet the requirements of this Code for an Islamic insurance contract. In this case, the insurer under the main insurance contract (Islamic insurance contract) in the reinsurance contract (Islamic reinsurance contract) is considered the policyholder.

5. Consecutive conclusion of two or more reinsurance contracts is allowed.

Article 825. Form of insurance contract

1. The insurance contract is concluded in writing by:

1. drawing up an insurance contract by the parties;

2) the insured joins the standard insurance conditions provided for by the legislative acts of the Republic of Kazakhstan, or the insurance rules developed by the insurer unilaterally (adhesion agreement), and the insurer issues an insurance policy to the policyholder.

2. The form of the contract for compulsory insurance is established by separate legislative acts of the Republic of Kazakhstan regulating compulsory types of insurance, for imputed insurance - by agreement of the parties in compliance with the minimum conditions provided for by the legislative acts of the Republic of Kazakhstan, and for voluntary insurance - by the insurer or by agreement of the parties.

When concluding an insurance contract, the insurer has the right to apply contracts developed by type of insurance in accordance with standard conditions or insurance rules.

3. Failure to comply with the written form of the insurance contract entails its nullity.

Article 825-1. Insurance rules

1. Insurance rules are developed by the insurer for each type of insurance and must comply with the requirements of this article.

2. Insurance rules must contain:

1. list of insurance objects;

2) the procedure for determining insurance amounts;

3) list of insured events;

4) exclusion from insured events and limitation of insurance;

5) the term and place of validity of the insurance contract;

6) the procedure for concluding an insurance contract;

7) rights and obligations of the parties;

8) actions of the policyholder upon the occurrence of an insured event;

9) a list of documents confirming the occurrence of an insured event and the amount of losses;

10) the procedure and conditions for making insurance payments;

10-1) the period for notifying the policyholder or the insured about the missing documents necessary for making the insurance payment;

11) the deadline for making a decision on insurance payment or refusal of insurance payment;

12) conditions for termination of the insurance contract;

13) the procedure for resolving disputes, including the specifics of resolving disputes regarding compulsory insurance;

15) additional conditions.

4. By agreement between the policyholder and the insurer, on the basis of the insurance rules, insurance contracts may be concluded that provide for changes, exclusions of certain provisions of the insurance rules, as well as additional conditions determined when concluding the insurance contract.

4-1. Conditions contained in the insurance rules and not included in the text of the insurance contract are binding on the parties if the contract directly states the application of such rules and the rules themselves are set out in the contract or attached to it. In the latter case, the provision of insurance rules to the policyholder upon conclusion of the contract must be certified by the parties to the contract.

Article 826. Contents of the insurance contract

1. The insurance contract must contain:

1. name, location and bank details of the insurer;

2) last name, first name, patronymic (if it is indicated in the identity document) and place of residence of the policyholder (if he is an individual) or his

name, location and bank details (if it is a legal entity);

2-1) last name, first name, patronymic (if indicated in the identification document), contact telephone number and individual identification number of the insurance agent (if he is an individual resident of the Republic of Kazakhstan) or name, location, contact telephone number and business identification number of the insurance agent (if he is a legal entity resident of the Republic of Kazakhstan);

3) indication of the insurance object;

4) indication of the insured event;

5) the amount of the insured amount (with the exception of annuity insurance contracts and insurance contracts that provide for the participation of the policyholder in investments), the procedure and timing of the insurance payment;

6) the amount of the insurance premium, the procedure and terms for their payment;

6-1) the amount of the insurer’s remuneration for managing the Islamic insurance fund, the conditions and procedure for its payment (when concluding an Islamic insurance agreement);

6-2) an indication of the presence or absence of commission payable to the insurance agent;

7) date of conclusion and validity period of the contract;

8) instructions about the insured and the beneficiary, if they are participants in the insurance relationship;

9) number, series of the contract (insurance policy);

10) cases and procedure for making changes to the terms of the contract;

10-1) the obligation of the insured to immediately inform the insurer about significant changes that have become known to him in the circumstances reported to the insurer at the conclusion of the contract, if these changes can significantly affect the increase in insurance risk during the validity period of the property insurance contract (clause 1 of Article 834 of this Code);

11) terms of payment and the amount of the redemption amount (for endowment insurance, with the exception of insurance contracts that provide for the condition of the policyholder’s participation in investments);

11-1) deadlines for notifying the policyholder or the insured about missing documents necessary for making an insurance payment;

14) type of currency of the insured amount, insurance payment and insurance premium;

15) indication of the identification number, indication of residence and economic sector of the policyholder;

16) indication of the identification number, sign of residence and economic sector of the insured (beneficiary), if he is not the policyholder under the insurance contract, if the insured (beneficiary) is indicated in the insurance contract.

2. By agreement of the parties, other conditions may be included in the contract.

2-1. Franchise is an exemption provided for by the terms of insurance of the insurer from compensation for damage not exceeding a certain amount.

The deductible can be conditional (non-deductible) or unconditional (deductible).

With a conditional deductible, the insurer is exempt from compensation for damage that does not exceed the established deductible amount, but must compensate for the damage in full if its amount is greater than this amount.

With an unconditional deductible, damage in all cases is compensated minus a specified amount.

The deductible is set either as a percentage of the insured amount or in an absolute amount.

3. If the insurance contract contains conditions that worsen the position of the policyholder in comparison with those provided for by legislative acts, the rules established by these legislative acts apply.

4. The period of liability of the reinsurer under the reinsurance agreement must correspond to the period of liability of the insurer under the insurance agreement, the obligations under which are transferred to reinsurance, unless otherwise provided by the reinsurance agreement.

5. The insurer bears responsibility for the incompleteness of the conditions to be specified in the insurance contract.

Article 826-1. Deferment of payment of insurance premium under an accumulative insurance agreement

1. An insurer that has not received an insurance premium (except for the first one) within the period established by the accumulative insurance agreement is obliged to notify the policyholder of the need to pay the insurance premium.

2. The notification must contain:

1. the period during which the insurance premium must be paid (insurance premium deferment period);

2) the amount of penalties for late payment of the insurance premium;

3) the right of the insurer to unilaterally terminate the contract in case of non-payment of the insurance premium during the period of deferment of the insurance premium.

3. The period of deferment of the insurance premium cannot be less than 30 calendar days.

4. If an insured event occurs during the period of deferment of the insurance premium under the accumulative insurance agreement, the insurer is obliged to make an insurance payment, while retaining the amount of debt.

5. Notification of the need to pay the insurance premium is sent to the policyholder in a manner that allows confirmation of the sending of the notification.

Article 826-2. Reinstatement of the accumulative insurance agreement

1. If the validity of the accumulative insurance contract was suspended or terminated on the basis of non-payment of the insurance premium by the policyholder, the insurer is obliged to restore the validity of the contract upon payment by the policyholder:

2) overdue insurance premiums;

3) penalties for late payment of insurance premiums in the amount provided for in Article 353 of this Code.

2. The policyholder has the right to reinstate the accumulative insurance agreement within one year from the date of termination of the agreement or suspension of the parties to the agreement fulfilling their obligations.

3. When reinstating the accumulative insurance contract, the insurer has the right to conduct a medical examination of the health status of the insured person.

In the event of a deterioration in the health of the insured person, the insurer has the right to recalculate the amount of the insurance payment and (or) the insurance premium. If the policyholder refuses to reinstate the contract on new terms, the contract cannot be restored.

4. The insurer has the right to refuse to reinstate the accumulative insurance agreement if such an agreement was terminated early and the insurer paid the redemption amount.

Article 826-3. Insurance under a contract by issuing a general policy

1. By agreement between the policyholder and the insurer, systematic insurance of different batches of similar property (goods, cargo, etc.) on similar conditions for a certain period can be carried out on the basis of one insurance contract by issuing a general policy to the policyholder.

2. The insured is obliged, in relation to each batch of property falling under the agreement specified in paragraph 1 of this article, to report to the insurer the information stipulated by such agreement within the period stipulated by it, and if it is not provided for, immediately upon receipt. The insured is not relieved of this obligation, even if by the time such information is received the possibility of losses subject to compensation by the insurer has already passed.

3. At the request of the insured, the insurer is obliged to issue insurance policies for individual lots of property falling under the agreement specified in paragraph 1 of this article.

In case of discrepancy between the contents of the insurance policy and the general policy, preference is given to the insurance policy.

Article 827. Validity of the insurance contract

1. The insurance contract comes into force and becomes binding for the parties from the moment the policyholder pays the insurance premium, and if it is paid in installments, the first insurance premium, unless otherwise provided by the contract or legislative acts of the Republic of Kazakhstan.

2. The insurance contract shall terminate from the moment the insurance payment is made for the first insured event, unless otherwise provided by the contract or legislative acts of the Republic of Kazakhstan.

3. The period of validity of insurance protection coincides with the validity period of the contract, unless otherwise provided by the contract or legislative acts of the Republic of Kazakhstan.

Article 828. Obligations of the insurer

1. The insurer is obliged:

1. upon the occurrence of an insured event, make an insurance payment in the amount, procedure and terms established in the insurance contract or legislative acts;

1-1) familiarize the policyholder with the insurance rules and, upon his request, provide (send) a copy of the rules;

2) reimburse the policyholder (insured) for expenses incurred by him to reduce losses in the event of an insured event;

3) ensure the secrecy of insurance;

4) in cases of failure by the policyholder (insured) or the victim (beneficiary) or their representative to provide all the documents necessary for making the insurance payment, notify them of the missing documents within the period established by the insurance contract.

2. Legislative acts on insurance and insurance activities, as well as the insurance contract may provide for other obligations of the insurer.

Article 829. Reimbursement of expenses aimed at reducing losses from an insured event

1. Upon the occurrence of an insured event provided for in a property insurance contract, the policyholder (insured) is obliged to take reasonable and accessible measures under the current circumstances to prevent or reduce possible losses, including measures to save and preserve the insured property.

When taking such measures, the policyholder (insured) must follow the instructions of the insurer if they are communicated to the policyholder (insured).

2. Expenses incurred by the policyholder (insured) in order to prevent or reduce losses are subject to reimbursement by the insurer if such expenses were necessary or were incurred to carry out the instructions of the insurer, even if the relevant measures were unsuccessful.

Such expenses are reimbursed in actual amounts, however, so that the total amount of insurance payment and compensation for expenses does not exceed the insured amount provided for in the insurance contract, if expenses arose as a result of the execution by the policyholder (insured) of the insurer’s instructions, they are reimbursed in full, regardless of the insured amount.

3. The insurer is exempt from making insurance payments in respect of those losses that arose due to the fact that the policyholder (insured) deliberately did not take reasonable and accessible measures to reduce possible losses.

Article 830. Secrecy of insurance

1. The secrecy of insurance includes information about the amount of the insured amount, the redemption amount and paid insurance premiums, other terms of the insurance (reinsurance) contract related to the identity of the policyholder, the insured or the beneficiary. Information about concluded insurance (reinsurance) contracts by an insurance (reinsurance) organization that is in the process of liquidation does not apply to the secrecy of insurance.

1-1. Legislative acts on insurance and insurance activities may provide for other conditions and procedures for the disclosure of information constituting an insurance secret.

2. Professional participants in the insurance market, an insurance agent, the Export Credit Agency of Kazakhstan do not have the right to disclose information received by them as a result of their professional activities that constitutes an insurance secret, with the exception of cases of providing information to another professional participant in the insurance market or an insurance agent related to the conclusion of reinsurance agreements or co-insurance relations, as well as provided for in paragraphs 4, 4-1, 5 and 6 of this article.

3. Officials, employees of an insurance (reinsurance) organization, resident insurance holding companies of the Republic of Kazakhstan, insurance brokers, insurance agents, insurance agents and other persons who, due to the performance of their official duties, have gained access to information constituting an insurance secret, bear responsibility for their disclosure as provided for by the laws of the Republic of Kazakhstan.

The exchange of information, including information constituting an insurance secret, between the National Bank of the Republic of Kazakhstan and the authorized body for regulation, control and supervision of the financial market and financial organizations is not a disclosure of insurance secrets.

It is not a disclosure of insurance secrets if an official of a state body or a person performing managerial functions in an organization presents documents and information containing insurance secrets as supporting documents and materials when sending a report of a criminal offense to the criminal prosecution body.

4. The secret of insurance may be disclosed to a third party on the basis of the written consent of the policyholder (insured, beneficiary).

4-1. The secret of insurance can be disclosed to the insurance ombudsman based on requests from individuals and legal entities under consideration to resolve disagreements arising from insurance contracts.

5. Information containing insurance secrets is provided:

1. to the representative of the policyholder (beneficiary) - on the basis of a notarized power of attorney;

2) to the body of inquiry and preliminary investigation - on criminal cases in its proceedings;

3) to the court - on cases in its proceedings on the basis of a ruling or court order;

3-1) to the authorized body for the return of assets - upon a written request signed by the first manager or the person performing his duties, accompanied by an extract from the register approved in accordance with the Law of the Republic of Kazakhstan “On the return of illegally acquired assets to the state”;

4) to the prosecutor - on the basis of a resolution to conduct an inspection within the limits of his competence on the materials under consideration;

4-1) to the authorized body for financial monitoring - for the purposes and in the manner provided for by the Law of the Republic of Kazakhstan “On combating the legalization (laundering) of proceeds from crime, the financing of terrorism and the financing of the proliferation of weapons of mass destruction”;

4-3) the authorized state body exercising management in the field of ensuring the receipt of taxes and other obligatory payments to the budget in accordance with the tax legislation of the Republic of Kazakhstan in relation to:

insurance contracts concluded by inspected individuals;

accumulative insurance contracts, the beneficiaries of which are non-resident individuals;

accumulative insurance contracts, the beneficiaries of which are individuals specified in the request of an authorized body of a foreign state sent in accordance with an international treaty of the Republic of Kazakhstan;

4-4) to the national security bodies of the Republic of Kazakhstan in relation to compulsory insurance contracts for civil liability of vehicle owners - for the purposes and in the manner provided for by the Law of the Republic of Kazakhstan "On National Security Bodies of the Republic of Kazakhstan", and in relation to other insurance contracts - with the sanction of the prosecutor;

4-5) State Security Service of the Republic of Kazakhstan with the sanction of the prosecutor in order to prevent, uncover and suppress intelligence and (or) subversive actions;

4-6) State Corporation "Government for Citizens" for the purposes provided for in Article 23-2 of the Law of the Republic of Kazakhstan "On compulsory insurance of employees against accidents during the performance of their labor (official) duties";

5) the authorized body for regulation, control and supervision of the financial market and financial organizations and the National Bank of the Republic of Kazakhstan - on issues related to the supervision of insurance activities;

5-1) a resident insurance holding company of the Republic of Kazakhstan - for the purposes of calculating the prudential standards of the insurance group, as well as forming a risk management system and internal control of the insurance group;

5-2) an organization that guarantees the implementation of insurance payments to policyholders (insured, beneficiaries) in the event of liquidation of an insurance organization, for the purposes determined by the Law of the Republic of Kazakhstan “On the Insurance Payment Guarantee Fund”;

6) other persons in accordance with the legislative acts of the Republic of Kazakhstan on insurance and insurance activities.

Information constituting an insurance secret may be provided by the authorized body for regulation, control and supervision of the financial market and financial organizations to the audit organization in accordance with part five of paragraph 13 of Article 20 of the Law of the Republic of Kazakhstan “On Insurance Activities”.

6. Information containing the secret of insurance in the event of the death of the policyholder, insured, or beneficiary is issued:

1. heirs;

2) courts and notaries on inheritance cases in their proceedings on the basis of a ruling, court order or request of a notary;

3) foreign consular offices - on inheritance cases pending in their proceedings.

7. The general conditions for carrying out insurance activities, the list of offered insurance services, insurance rates, insurance periods, as well as other basic conditions of the insurance (reinsurance) contract are open information and cannot be the subject of insurance secrets and trade secrets.

8. If the insurer discloses information that constitutes an insurance secret, the policyholder (the insured, the beneficiary) has the right to demand compensation for losses caused, and in appropriate cases, compensation for moral damage.

Article 831. Obligations of the policyholder

1. The policyholder is obliged:

1. pay insurance premiums in the amount, manner and terms,

established by the insurance contract;

2) inform the insurer about the state of the insurance risk;

3) notify the insurer of the occurrence of an insured event;

4) take measures to reduce losses from an insured event (clause 1 of Article 829 of this Code);

5) ensure the transfer to the insurer of the right of claim against the person responsible for the occurrence of the insured event (Article 840 of this Code).

2. The insurance contract may also provide for other obligations of the policyholder.

Article 832. Information provided by the insured when concluding a contract

1. When concluding a contract, the policyholder is obliged to inform the insurer of the circumstances known to the policyholder that are essential for determining the likelihood of the occurrence of an insured event and the amount of possible losses from its occurrence (insurance risk), if these circumstances are not known and should not be known to the insurer.

Circumstances specifically specified in the insurance rules developed by the insurer or in a written request from the insurer sent to the policyholder during the period of concluding the contract are considered significant.

When concluding a compulsory insurance contract, the circumstances established by individual legislative acts of the Republic of Kazakhstan regulating compulsory types of insurance are considered significant.

2. An insurance contract cannot be concluded in the absence of answers from the policyholder to the questions specified in the written request of the insurer regarding significant circumstances.

If an insurance contract is concluded in the absence of answers from the policyholder to any questions from the insurer, the latter cannot subsequently demand termination of the contract or recognition of it as invalid on the grounds that the relevant circumstances were not communicated by the policyholder.

3. If, after concluding the contract, it is established that the policyholder has provided the insurer with knowingly false information about the circumstances specified in paragraph 1 of this article, the insurer has the right to demand that the contract be declared invalid and the consequences provided for in parts two and three of paragraph 1 of Article 844 of this Code be applied.

The insurer cannot demand that the contract be invalidated if the circumstances that the policyholder has kept silent about have already disappeared.

Article 833. Assessment of insurance risk and damage caused

1. When concluding a property insurance contract, the insurer has the right to inspect and evaluate the insured property, and, if necessary, order an examination in order to determine its actual value.

The assessment of the insured property and damage caused by the insurer is an integral part of the insurance and does not require additional licensing.

2. When concluding a personal insurance contract, the insurer has the right to conduct an examination of the insured person to assess the actual state of his health.

3. An assessment of the insurance risk by the insurer on the basis of this article is optional for the policyholder, who has the right to prove otherwise.

4. The amount of damage caused as a result of the occurrence of an insured event at the request of the policyholder or his representative is determined by the insurer. If necessary, an assessment of the amount of damage caused is carried out by an appraiser (independent expert). If you disagree with the results of the assessment of damage caused, the parties have the right to prove otherwise.

5. In case of compulsory insurance, the procedure and conditions for assessing the amount of damage caused as a result of the occurrence of an insured event may be established by the legislative acts of the Republic of Kazakhstan.

Article 834. Consequences of an increase in insurance risk during the validity period of the contract

1. During the period of validity of the property insurance contract, the policyholder (the insured) is obliged to immediately notify the insurer of significant changes that become known to him in the circumstances reported to the insurer at the conclusion of the contract, if these changes may significantly affect the increase in the insurance risk.

In any case, changes specified in the insurance contract are considered significant.

2. The insurer, notified of circumstances entailing an increase in insurance risk, has the right to demand changes in the terms of the contract or payment of an additional insurance premium in proportion to the increase in risk.

If the policyholder or the insured objects to changing the terms of the insurance contract or additional payment of the insurance premium, the insurer has the right to demand termination of the contract in accordance with the rules provided for in Chapter 24 of this Code.

3. If the policyholder or the insured fails to fulfill the obligation provided for in paragraph 1 of this article, the insurer has the right to demand termination of the contract and compensation for losses caused by termination of the contract.

4. The insurer has no right to demand termination of the contract if the circumstances leading to an increase in the insurance risk have already ceased.

5. In case of personal insurance, the consequences of changes in the insurance risk during the validity period of the contract, specified in paragraphs 2 and 3 of this article, may occur if they are expressly provided for in the contract.

Article 835. Notification of the insurer about the occurrence of an insured event

1. The policyholder, after becoming aware of the occurrence of an insured event, is obliged to immediately notify the insurer or his representative of its occurrence. If an agreement or legislative act of the Republic of Kazakhstan provides for a period and (or) method of notification, it must be done within the stipulated period and in the manner specified in the agreement or legislative act of the Republic of Kazakhstan.

If the policyholder is not the insured, such responsibility lies with the insured.

If, in the case of personal insurance, the insured event is the death of the insured, then the obligation to notify the insurer about the insured event lies with the policyholder, and if he was also the insured, then with the beneficiary. In this case, the period for notifying the insurer established by the contract cannot be less than thirty days.

2. The beneficiary has the right to notify the insurer of the occurrence of an insured event under all circumstances, regardless of whether the policyholder or the insured did so or not.

3. Failure to notify the insurer of the occurrence of an insured event gives him the right to refuse insurance payment, unless it is proven that the insurer learned about the occurrence of the insured event in a timely manner or the insurer’s lack of information about this could not affect his obligation to make an insurance payment.

4. Failure to notify or untimely notification of the insurer about the occurrence of an insured event is not grounds for refusal to make an insurance payment if it is due to reasons independent of the will of the insured or classified as valid by the insurance contract, and relevant documents confirming this fact are presented.

Article 836. Replacement of the policyholder

1. In the event of the death of the policyholder who has entered into a property insurance contract, the rights and obligations of the policyholder shall pass to the person who accepted this property by inheritance. In other cases of transfer of ownership (or other real rights), the rights and obligations of the insured are transferred to the new owner (or holder of other real rights) with the consent of the insurer, unless otherwise provided by the contract or legislative acts.

2. In the event of the death of the policyholder who has entered into a personal insurance contract in favor of the insured, the rights and obligations determined by this contract are transferred to the insured with his consent. If it is impossible for the insured to fulfill his obligations under the insurance contract, his rights and obligations may pass to persons who, in accordance with legislative acts, are responsible for protecting his rights and legitimate interests.

3. When the insured, who is a legal entity, is reorganized during the validity of the insurance contract, his rights and obligations under this contract are transferred, with the consent of the insurer, to the corresponding legal successor in the manner prescribed by this Code.

Article 837. Replacement of the insured

1. In the event that, under a liability agreement for causing harm, the liability of a person other than the insured is insured, the latter has the right, unless otherwise provided by the insurance agreement, to replace this person with another at any time before the occurrence of an insured event, notifying the insurer in writing.

2. An insured person who is not the policyholder, named in the personal insurance contract, as well as property insurance, can be replaced by another only with the consent of the insured person (with the exception of group personal insurance) and the insurer.

3. If insurance of a third party follows from the requirements of the legislative acts of the Republic of Kazakhstan, the replacement of the insured is carried out in the manner established by the specified legislative acts of the Republic of Kazakhstan and the contract based on them.

Article 838. Replacement of beneficiary

1. The policyholder has the right, before the occurrence of an insured event, to replace the non-insured beneficiary named in the insurance contract with another person, notifying the insurer in writing.

2. The beneficiary cannot be replaced by another person after he has fulfilled certain obligations under the insurance contract arising from his agreement with the policyholder, or has presented the insurer with a requirement to make an insurance payment.

3. The replacement of a beneficiary who is an insured person is carried out in the manner prescribed by Article 837 of this Code.

Article 839. Grounds for exemption of the insurer from making insurance payments

1. The insurer has the right to fully or partially refuse the insurance payment to the policyholder if the insured event occurred as a result of:

1. intentional actions of the policyholder, the insured and (or) the beneficiary, aimed at the occurrence of an insured event or contributing to its occurrence, with the exception of actions committed in a state of necessary defense and extreme necessity;

2) actions of the policyholder, the insured and (or) the beneficiary, recognized in the manner established by the legislative acts of the Republic of Kazakhstan as intentional criminal or administrative offenses that are causally related to the insured event.

The insurer is not exempt from making insurance payments under civil liability insurance contracts if the insured event occurred due to the fault of the person whose liability is the object of insurance.

The insurer is not exempt from making an insurance payment, which under a personal insurance contract is payable in the event of the death of the insured, if the death was due to suicide and by that time the insurance contract had been in force for at least two years.

2. Since the voluntary insurance contract and the legislative acts of the Republic of Kazakhstan do not provide otherwise, the insurer is exempt from making insurance payments if the insured event occurred as a result of:

1. exposure to a nuclear explosion, radiation or radioactive contamination;

2) military actions;

3) civil war, civil unrest of all kinds, mass riots or strikes.

3. Unless otherwise provided for in the property insurance contract, the insurer is exempt from making insurance payments for losses arising as a result of seizure, confiscation, requisition, arrest or destruction of insured property by order of state bodies.

4. The following may also be grounds for the insurer’s refusal to make an insurance payment:

1. communication by the insured to the insurer of knowingly false information about the object of insurance, the insured risk, the insured event and its consequences;

2) deliberate failure by the insurer to take measures to reduce losses from an insured event (Article 829 of this Code);

3) receipt by the insured of appropriate compensation for losses under property insurance from the person responsible for causing the loss;

4) obstruction by the policyholder of the insurer in investigating the circumstances of the occurrence of the insured event and in establishing the amount of loss caused by it;

5) failure to notify the insurer of the occurrence of an insured event (Article 835 of this Code);

6) refusal by the policyholder of his right of claim against the person responsible for the occurrence of the insured event, as well as refusal to transfer to the insurer the documents necessary for the transfer of the right of claim to the insurer (Article 840 of this Code). If the insurance compensation has already been paid, the insurer has the right to demand its return in whole or in part;

7) other cases provided for by legislative acts.

5. Release of the insurer from insurance liability to the policyholder based on his unlawful actions provided for in this article, simultaneously releases the insurer from making insurance payments to the insured or beneficiary.

6. The terms of the insurance contract may provide for other grounds for refusal of insurance payment, if this does not contradict legislative acts.

7. The decision to refuse insurance payment is made by the insurer and communicated to the policyholder in writing with a reasoned justification for the reasons for the refusal and notification of the right of the policyholder (insured, beneficiary) to contact the insurance ombudsman to resolve disagreements, taking into account the specifics of the legislation of the Republic of Kazakhstan.

8. The insurer’s refusal to make an insurance payment may be appealed to the court, provided that the procedure for resolving the dispute by the insurance ombudsman is observed in the manner and under the conditions provided for by the laws of the Republic of Kazakhstan.

Article 840. Transfer to the insurer of the rights of the insured (beneficiary) to compensate for losses (subrogation)

Footnote: Footnote. The title of Article 840 as amended by the Law of the Republic of Kazakhstan dated January 23, 2024 No. 54-VIII (shall be enforced upon expiration of sixty calendar days after the day of its first official publication).

1. Unless otherwise provided by the property insurance contract, the right of claim that the policyholder (insured) has against the person responsible for losses compensated as a result of insurance is transferred to the insurer who made the insurance payment, within the amount paid. However, the provision of the contract that excludes the transfer to the insurer of the right of claim against the person who intentionally caused losses is void.

2. The right of claim transferred to the insurer is exercised by him in compliance with the rules governing the relationship between the policyholder (insured) and the person responsible for losses, as well as the requirements established by the Law of the Republic of Kazakhstan “On Insurance Activities.”

3. Upon receipt of the insurance payment, the policyholder (the insured) is obliged to transfer to the insurer all documents and evidence and provide him with all the information necessary for the insurer to exercise the right of claim transferred to him.

4. If the policyholder (insured) has waived his right to claim against the person responsible for losses compensated by the insurer, or the exercise of this right has become impossible due to the fault of the policyholder (insured), the insurer is released from making the insurance payment in full or in the relevant part and has the right to demand the return of the excess paid amount.

5. The Export Credit Agency of Kazakhstan may transfer the right of claim of the beneficiary to the person responsible for losses compensated as a result of insurance.

Article 841. Early termination of an insurance contract

1. In addition to the general grounds for termination of obligations provided for by this Code, the insurance contract is terminated early in the following cases:

1. when the insurance object ceased to exist;

2) death of the insured who is not the policyholder, when his replacement has not occurred (clause 8 of Article 815 of this Code);

3) alienation by the insured of the property insurance object, if the insurer objects to the replacement of the insured, and the contract or legislative acts of the Republic of Kazakhstan do not establish otherwise (clause 1 of Article 836 of this Code);

4) termination in the prescribed manner of business activity by the insured who has insured his business risk or civil liability associated with this activity;

5) when the possibility of the occurrence of an insured event has disappeared and the existence of the insured risk has ceased due to circumstances other than the insured event;

6) the entry into force of a court decision on the forced liquidation (on the forced termination of activities) of the insurer, the adoption of a decision by the authorized state body on the deprivation of the license of a branch of a non-resident insurance (reinsurance) organization of the Republic of Kazakhstan, except for cases provided for by the Law of the Republic of Kazakhstan “On Insurance Activities”;

8) changes in the conditions and information included in the insurance policy issued by the insurer in the manner prescribed by the legislative acts of the Republic of Kazakhstan;

9) in cases provided for by the Law of the Republic of Kazakhstan “On Insurance Activities”.

In these cases, the contract is considered terminated from the moment the circumstance specified as the basis for termination of the contract occurs, of which the interested party must immediately notify the other.

2. The policyholder has the right to cancel the insurance contract at any time, unless otherwise provided by the laws of the Republic of Kazakhstan and the insurance contract.

Article 842. Consequences of early termination of an insurance contract

1. In case of early termination of a non-cumulative insurance contract under the circumstances provided for in paragraph 1 of Article 841 of this Code, the insurer has the right to a portion of the insurance premium in proportion to the time during which the insurance was in effect. The return of insurance premiums (contributions) upon liquidation of the insurer is carried out in accordance with the priority of satisfying the claims of creditors established by the legislation of the Republic of Kazakhstan on insurance and insurance activities.

In case of early termination of an accumulative insurance agreement in the cases provided for by subparagraph 6) of paragraph 1 of Article 841 of this Code and paragraph 3 of this article, only the redemption amount is subject to return in the amount established by the agreement and in accordance with the priority of satisfying the claims of creditors established by the legislation of the Republic of Kazakhstan on insurance and insurance activities.

2. If the policyholder refuses the contract (clause 2 of Article 841 of this Code), unless this is related to the circumstances specified in part one of clause 1 of Article 841 of this Code, in parts two and three of this clause, the insurance premium or insurance contributions paid to the insurer are not subject to return, unless otherwise provided by the contract.

If an individual insured refuses an insurance contract, with the exception of an annuity insurance contract concluded in accordance with the Social Code of the Republic of Kazakhstan and the Law of the Republic of Kazakhstan "On compulsory insurance of an employee against accidents during the performance of his labor (official) duties", as well as the insurance contract specified in part three of this paragraph, within fourteen calendar days from the date of its conclusion, the insurer is obliged to return to the individual insured the received (received) insurance premium (insurance premiums) minus part of the insurance premium (insurance premiums) in proportion to the time during which the insurance was in force, and the costs associated with termination of the insurance contract, not exceeding ten percent of the insurance premium (insurance premiums) received.

If an individual insured refuses an insurance contract related to a loan agreement, within the period provided for in part two of this paragraph, the lender has the right to revise the terms of the loan agreement in terms of the interest rate under this agreement and (or) the commission associated with it. The amount of the interest rate (commission amount) under a loan agreement based on the results of the revision cannot exceed the interest rate (commission) in effect on the date of concluding such a loan agreement without the condition of concluding an insurance agreement.

If an individual insured refuses an insurance contract related to a loan agreement due to the fulfillment by him (the borrower) of obligations to the lender under the loan agreement, the insurer is obliged, within five working days from the date of receipt of an application for termination of the insurance contract from the insured - an individual, to return to the individual insured the received (received) insurance premium (insurance premiums) minus a part of the insurance premium (insurance premiums) in proportion to the time during which the policy was in effect insurance, and costs associated with termination of the insurance contract, not exceeding ten percent of the insurance premium (insurance premiums) received.

3. In cases where the early termination of the insurance contract is caused by failure to comply with its terms through the fault of the insurer, the latter is obliged to return to the policyholder the insurance premium or insurance premiums paid in full.

Article 843. Invalidity of an insurance contract

1. In addition to the general grounds for the invalidity of transactions provided for by this Code, an insurance contract is invalid in cases where:

1. the object of insurance is property that is subject to confiscation on the basis of a corresponding court decision that has entered into legal force, or property obtained by criminal means or that is the subject of a criminal offense;

2) an event devoid of the characteristics provided for in paragraph 3 of Article 817 of this Code is provided as an insured event;

3) the terms of the contract exclude the possibility of making an insurance payment upon the occurrence of an insured event;

4) the policyholder, when concluding the contract, deliberately pursued the goal of extracting unlawful benefits, including through concluding the contract after the occurrence of the insured event;

5) the policyholder (insured, beneficiary) has no insurable interest;

6) there is no agreement between the parties on the essential terms of the contract provided for in paragraph 1 of Article 826 of this Code.

2. The insurance contract is void in the following cases:

1. if the object of insurance (reinsurance) is illegal property interests (clause 2 of Article 807, part three of clause 1 of Article 824 of this Code);

2) lack of consent of the insured in cases where obtaining his consent is mandatory;

3) failure to comply with the written form of the contract (clause 3 of Article 825 of this Code);

4) there is no object of insurance (reinsurance).

3. Legislative acts of the Republic of Kazakhstan may provide, in relation to certain types of insurance, other grounds for declaring an agreement invalid.

Article 844. Consequences of invalidating an insurance contract

1. If an insurance contract is declared invalid, the insurer is obliged to return to the policyholder the insurance premium or insurance contributions received from him, and the policyholder (beneficiary) is obliged to return to the insurer the insurance payment received from him.

If the contract is declared invalid on grounds arising from the unlawful actions of the insured, which the insurer did not know and should not have known about at the time of concluding the contract, as well as in the process of its execution, the insurer returns to the insured the insurance premium or insurance premiums for the unexpired term of the contract, minus the expenses incurred, and if an insurance payment was made, it has the right to demand the return of the amount paid.

The same consequences occur if the insurance contract is declared invalid for reasons that give the insurer grounds to refuse insurance payment (Article 839 of this Code).

2. If the insurance contract is aimed at achieving a criminal goal, the illegality of which is established by a court verdict (decision), then the consequences provided for in paragraphs 5 - 7 of Article 157-1 of this Code occur.

Article 845. Mutual insurance

1. Citizens and legal entities may insure their property interests, specified in paragraph 1 of Article 807 of this Code, on a mutual basis by pooling the funds necessary for this in mutual insurance companies.

2. Mutual insurance societies provide insurance for other property interests of their members and are non-profit organizations.

Features of the implementation of mutual insurance, the legal status of mutual insurance companies and the conditions of their activities are determined in accordance with this Code and legislative acts on mutual insurance.

3. Mutual insurance companies insure the property interests of their members on the basis of membership and insurance contracts.

4. Compulsory insurance through mutual insurance is permitted in cases provided for by legislative acts on mutual insurance.

Article 845-1. Islamic insurance

1. An Islamic insurance contract is an insurance contract (Article 803 of this Code), concluded taking into account the specifics established by the legislation of the Republic of Kazakhstan on insurance and insurance activities.

2. The insurance premium paid by the policyholder under an Islamic insurance contract, as well as income received as a result of investing insurance premiums, are subject to transfer by the insurer to the Islamic insurance fund, formed by the insurer to make insurance payments to policyholders (beneficiaries) under Islamic insurance contracts.

3. Insurance premiums received by the insurer under an Islamic insurance contract, as well as other property constituting the Islamic insurance fund, do not belong to the insurer by right of ownership.

4. The insurer under an Islamic insurance contract has the right to receive remuneration for managing the Islamic insurance fund at the expense of the Islamic insurance fund in accordance with the requirements established by the legislation of the Republic of Kazakhstan on insurance and insurance activities, and the concluded Islamic insurance contract.

5. Features of the implementation of Islamic insurance, the formation, accounting, use and distribution of the Islamic insurance fund, the legal status of insurers carrying out Islamic insurance, and the conditions of their activities are determined in accordance with this Code and the legislative acts of the Republic of Kazakhstan on insurance and insurance activities.

Chapter 41. Assignment

Article 846. Agency contract

1. Under a contract of agency, one party (the attorney) undertakes to perform certain legal actions on behalf and at the expense of the other party (the principal). Under a transaction completed by an attorney, the rights and obligations arise directly from the principal.

2. The agency agreement is concluded in writing.

Article 847. Execution of an order in accordance with the instructions of the principal

1. The attorney is obliged to fulfill the assignment given to him in accordance with the instructions of the principal. The principal's instructions must be specific, lawful and feasible.

2. The attorney has the right to deviate from the instructions of the principal if, under the circumstances of the case, this is necessary in the interests of the principal and the attorney could not first request the principal or did not receive a timely response to his request. In this case, the attorney is obliged to notify the principal of the deviations made as soon as notification becomes possible.

3. By agreement of the parties, a commercial representative may be released from fulfilling the obligation specified in paragraph 2 of this article.

Article 848. Obligations of an attorney

The attorney is obliged:

1. personally carry out the assignment given to him;

2) inform the principal, upon his request, all information about the progress of the execution of the order;

3) transfer to the principal without delay everything received under the completed transaction;

4) upon execution of the order, immediately return to the principal the power of attorney, the validity of which has not expired, and submit a report with supporting documents attached, if required by the nature of the order;

5) fulfill other duties provided for by the legislative acts of the Republic of Kazakhstan.

Article 849. Obligations of the principal

1. The principal is obliged, unless otherwise provided by the contract:

1. provide the attorney with the funds necessary to execute the order;

2) reimburse the attorney for expenses incurred that were necessary to execute the order.

2. The principal is obliged to accept without delay everything performed by the attorney in accordance with the contract.

3. The principal is obliged, upon execution of the order, to pay the attorney a remuneration in accordance with the rules of Article 850 of this Code.

4. Legislative acts of the Republic of Kazakhstan may provide for other obligations of the principal.

Article 850. Remuneration in a contract of agency

1. The principal is obliged to pay remuneration to the attorney if this is provided for by legislative acts or contract.

If the agency agreement is related to the implementation of entrepreneurial activities by both parties or one of them, the principal is obliged to pay the attorney a remuneration, unless otherwise provided by the agreement.

2. If the contract or legislative acts contain an indication of the remuneration for the fulfillment of the contract, but do not indicate the amount of remuneration, then it is determined taking into account the generally accepted prices for services of this kind.

3. The remuneration is subject to payment even when the attorney proves that he properly performed all the required actions, but the assignment was not carried out through no fault of his.

Article 851. Subassignment

1. The attorney has the right to transfer the execution of the assignment to another person (deputy), if this is provided for in the contract, or if the attorney is forced to do so by circumstances in order to protect the interests of the principal.

2. An attorney who has entrusted the execution to another person is obliged to immediately notify the principal about this. The principal has the right to remove a deputy chosen by the attorney, except in cases where such a deputy was named in the contract.

3. If a deputy attorney is named in the contract, the attorney is not responsible for the conduct of affairs by his deputy.

4. If the conduct of affairs by a deputy is provided for in the contract, but the deputy is not named in it, the attorney is not responsible for the guilty actions of his deputy.

5. If the contract does not provide for the conduct of affairs by a deputy attorney, the attorney is responsible for any actions of his deputy.

Article 852. Termination of a contract of agency

1. The agency agreement is terminated, along with the general grounds for termination of obligations, due to:

1. cancellation of the order by the principal;

2) refusal of the attorney;

3) death of the principal or attorney, recognition of any of them as incompetent, partially capable or missing.

2. If the attorney did not know and should not have known about the termination of the agency agreement, then his actions, performed at the direction of the principal, bind the principal (his successor) in relation to third parties and the attorney.

3. A party terminating an agreement with an attorney acting as an entrepreneur must notify the other party of termination of the agreement one month in advance, unless a longer period is provided for in the agreement.

Article 853. Consequences of termination of a contract of agency

1. If the agency agreement is terminated before the mandate is fully executed by the attorney, the principal is obliged to compensate the attorney for the costs incurred in executing the assignment, and when the attorney was due remuneration, also pay him a remuneration in proportion to the work performed by him. This rule does not apply to the execution of an assignment by an attorney after he learned or should have learned about the termination of the assignment.

2. Cancellation of an order by the principal is not the basis for compensation for losses caused to the attorney by termination of the contract, except for cases of termination of the contract with the attorney acting as an entrepreneur.

3. The refusal of the attorney to execute the principal’s instructions is not grounds for compensation for losses caused to the principal by termination of the contract, except for cases of refusal by the attorney in conditions where the principal is deprived of the opportunity to otherwise ensure his interests, as well as cases of termination of the contract by the attorney acting as an entrepreneur.

Article 854. Succession in a contract of agency

1. In the event of the death of an attorney, his heirs or other persons entrusted with ensuring the safety of the inherited property are obliged to notify the principal of the termination of the agency agreement and take measures necessary to protect the principal’s property, in particular, to preserve the things, as well as the documents of the principal, and then transfer them to him.

The same obligation lies with the liquidator of a legal entity who is an attorney.

2. When reorganizing a legal entity acting as a representative, the principal must be immediately notified of this in accordance with Article 48 of this Code. In this case, the rights and obligations of such a legal entity are transferred to its legal successor if the principal does not notify of his withdrawal from the contract within a reasonable time.

Chapter 42. Actions in the interests of others without instructions

Article 855. Conditions for acting in someone else’s interest

1. Actions without an order, other indication or previously promised consent of the interested person in order to prevent harm to his person or property, to fulfill his obligation or in his other non-illegal interests (actions in the interests of others) must be carried out based on the obvious benefit or benefit and the actual or probable intentions of the interested person, with the care and diligence necessary under the circumstances of the case.

2. The rules provided for by this chapter do not apply to actions in the interest of other persons committed by government bodies for which such actions are one of the goals of their activities.

Article 856. Notification of an interested person about actions in his interest

1. A person acting in someone else’s interest is obliged to inform the interested person about this at the first opportunity and wait within a reasonable period of time for a decision on approval or disapproval of the actions taken, unless the wait does not entail serious damage to the interested person.

2. There is no requirement to specifically inform the interested person about actions in his interest if these actions are taken in his presence.

Article 857. Consequences of approval by an interested person of actions in his interest

If the person in whose interest actions are taken without his instructions approves these actions, the rules on the contract of agency or other agreement corresponding to the nature of the actions taken are subsequently applied to the relations of the parties, even if the approval was oral.

Article 858. Consequences of disapproval by an interested person of actions in his interest

1. Actions in the interest of others, committed after the person who commits them has learned that they are not approved by the interested party, do not entail obligations for the latter either in relation to the person who committed these actions or in relation to third parties.

2. Actions in order to prevent danger to the life of a person who finds himself in danger are permitted against the will of this person, and the fulfillment of the obligation to maintain someone is against the will of the one who bears this obligation.

Article 859. Compensation for losses to a person who acted in someone else’s interest

1. Necessary expenses and other actual damage incurred by a person acting in someone else’s interest in accordance with the rules provided for by this chapter are subject to compensation by the interested person, with the exception of expenses that are caused by the actions specified in paragraph 1 of Article 858 of this Code.

The right to compensation for necessary expenses and other actual damages is retained even in cases where actions in someone else’s interest did not lead to the intended result. However, in the event of preventing damage to the property of another person, the amount of compensation should not exceed the value of the property.

2. Expenses and other losses of a person acting in someone else’s interest, incurred by him in connection with actions taken after receiving approval from the interested party (Article 857 of this Code), are reimbursed according to the rules on the contract of the corresponding type.

Article 860. Remuneration for actions in the interests of others

A person whose actions in the interest of others have led to a positive result for the interested person has the right to receive remuneration if such a right is provided for by legislative acts, an agreement with the interested person or business customs.

Article 861. Consequences of making a transaction in the interest of others

Responsibilities under a transaction concluded in the interest of others are transferred to the person in whose interests it was concluded, subject to his approval of this transaction and if the other party does not object to such a transfer or, at the conclusion of the transaction, knew or should have known that the transaction was concluded in the interest of others.

When the obligations under a transaction are transferred to the person in whose interests it was concluded, the rights under this transaction must also be transferred to the latter.

Article 862. Unjust enrichment due to actions in the interest of others

If actions not directly aimed at ensuring the interests of another person, including in cases where the person who committed them mistakenly assumed that he was acting in his own interest, led to the unjust enrichment of another person, the rules provided for in Chapter 48 of this Code are applied.

Article 863. Compensation for damage caused by actions in someone else’s interest

Relations regarding compensation for harm caused by actions in the interest of others, an interested party or third parties are regulated by the rules provided for in Chapter 47 of this Code.

Article 864. Report of a person who acted in someone else’s interest

A person who acted in someone else’s interest is obliged to submit to the person in whose interests the actions were carried out a report indicating the income received and the expenses incurred and other losses.

Chapter 43. Commission

Article 865. Commission agreement

1. Under a commission agreement, one party (the commission agent) undertakes, on behalf of the other party (the principal), for a fee, to carry out one or more transactions on its own behalf at the expense of the principal.

2. The commission agreement must be concluded in writing.

Article 866. Commission remuneration

The principal is obliged to pay remuneration to the commission agent, and in the case provided for in paragraph 2 of Article 868 of this chapter, also additional remuneration in the amount established in the contract. If this amount is not provided for in the contract and cannot be determined based on its terms, the amount of remuneration is established in accordance with paragraph 3 of Article 385 of this Code.

If the commission agreement was not fulfilled for reasons depending on the principal, the commission agent retains the right to a commission, as well as to reimbursement of expenses incurred.

Article 867. Rights and obligations of a commission agent in a transaction with a third party

1. Under a transaction made by a commission agent with a third party, the commission agent acquires rights and becomes obligated, even if the principal was named in the transaction or entered into direct relations with the third party under the transaction.

The commission agent is obliged to notify the principal of the conclusion of a transaction with a third party.

2. At the request of the principal, the commission agent is obliged to transfer to him the rights under such a transaction, notifying the third party with whom the transaction was made about the transfer. The latter does not have the right to raise objections against the principal’s demands based on its claims to the commission agent that do not arise from this transaction.

Article 868. Execution of commission orders

1. The commission agent must fulfill all obligations and exercise all rights arising from the transaction concluded by him with a third party.

2. The commission agent is obliged to execute the commission accepted in accordance with the instructions of the principal, and in the absence of such instructions in the contract - in accordance with business customs or other usually imposed requirements, on the most favorable terms for the principal. If the commission agent has made a transaction on terms more favorable than those specified by the principal, then the benefits are shared equally by the parties, unless otherwise provided by the contract.

3. The commission agent is not responsible to the principal for the failure of a third party to fulfill a transaction concluded with him at the expense of the principal, except in cases where the commission agent did not show the necessary caution in choosing this person or accepted a guarantee for the execution of the transaction (del credere).

4. In the event of a violation by a third party of a transaction concluded with him by the commission agent, the commission agent is obliged to immediately notify the principal about this, collect and provide the necessary evidence.

5. The principal, notified of a violation by a third party of a transaction concluded with him by the commission agent, has the right to demand that the commission agent’s claims against this person under such transaction be transferred to him.

Article 869. Subcommission

1. Unless otherwise provided by the agreement, the commission agent has the right to conclude a subcommission agreement with another person, remaining responsible for the actions of the subcommissioner to the principal.

Under a subcommission agreement, the commission agent acquires the rights and obligations of the principal in relation to the subcommission agent, with the exception of the rights provided for in paragraph 2 of Article 867 of this Code.

In cases where legislative acts allow the execution of any transactions only by specially authorized persons, a subcommission agreement can be concluded only with such a person.

2. Until the termination of the commission agreement, the principal does not have the right to enter into direct relations with the sub-commission agent, unless otherwise provided by the agreement between the principal and the commission agent.

Article 870. Deviation from the instructions of the principal

1. The commission agent has the right to deviate from the instructions of the principal in the cases provided for in paragraph 2 of Article 847 of this Code.

2. A commission agent who sold property at a price lower than agreed with the principal is obliged to compensate the latter for the difference unless he proves that he did not have the opportunity to sell the property at the agreed price and the sale at a lower price prevented even greater losses, as well as that he did not have the opportunity to obtain the prior consent of the principal to deviate from his instructions.

3. If the commission agent buys property at a price higher than that agreed upon with the principal, the principal who does not want to accept such a purchase is obliged to notify the commission agent of this without delay upon receipt of notice of the conclusion of the transaction with a third party. Otherwise, the purchase is considered accepted by the principal.

If the commission agent informs that he accepts the difference in price at his own expense, the principal does not have the right to refuse the transaction concluded for him.

Article 871. Rights to property that is the subject of a commission

1. Property received by the commission agent from the principal or acquired by the commission agent at the expense of the principal is the property of the principal.

2. The commission agent has the right to retain property that is subject to transfer to the principal or a third party under a transaction concluded by the commission agent until the amounts due to him under the commission agreement are paid.

Article 872. Withholding by the commission agent of amounts due to him

The commission agent has the right to withhold the amounts due to him under the commission agreement from all amounts received by him at the expense of the principal.

Article 873. Responsibility of the commission agent

Footnote: Footnote. The title of Article 873 is as amended by the Law of the Republic of Kazakhstan dated February 27, 2017 No. 49-VI (shall be brought into force upon the expiration of ten calendar days after the day of its first official publication).

1. The commission agent is responsible to the principal for any omission that resulted in loss, shortage or damage to the principal’s property in his possession.

2. If, when a commission agent accepts property sent by the principal or received by the commission agent for the principal, this property turns out to be damaged or other defects that can be noticed during an external inspection, as well as if someone causes damage to the principal’s property located with the commission agent, the commission agent is obliged to take measures to protect the rights of the principal, collect the necessary evidence and notify about everything without delay committent. If the specified conditions are met, the commission agent is not responsible for the principal's losses.

3. A commission agent who has not insured the property of the principal in his possession shall be liable for this only in cases where the principal has ordered him to insure the property or the insurance of this property is mandatory by force of law.

4. The commission agent bears responsibility, provided for by the laws of the Republic of Kazakhstan, for failure to fulfill obligations under a transaction with a third party.

5. Expenses caused by the commission agent’s failure to fulfill his obligations under a transaction with a third party shall be covered by the commission agent.

Article 874. Transaction for oneself

1. Unless the principal has stipulated otherwise, the commission agreement may be executed by the commission agent in such a way that he himself, as a seller, delivers the goods that he must buy, or he himself, as a buyer, accepts the goods that he must sell.

2. A commission agent who has independently supplied goods as a seller or accepted them as a buyer is entitled to regular commissions and may issue invoices for reimbursement of expenses arising from commission transactions.

Article 875. Acceptance by the principal of what is executed under the commission agreement

The principal is obliged:

1. accept from the commission agent everything performed under the contract;

2) inspect the property acquired for him by the commission agent and notify the latter without delay of any shortcomings discovered in this property;

3) release the commission agent from the obligations assumed by him to a third party for the execution of the commission order.

Article 876. Reimbursement of expenses for the execution of a commission order

1. The principal is obliged, in addition to paying the commission, and in appropriate cases, additional remuneration for the del credere, to reimburse the commission agent for the amounts spent by him in executing the order.

2. The commission agent does not have the right to reimbursement of expenses for storing the principal’s property in his possession, unless otherwise provided in legislative acts or an agreement.

Article 877. Cancellation of an order by the principal

The principal has the right to cancel the order given to the commission agent at any time. In this case, the commission agent's losses caused by the cancellation of the order are compensated on a general basis.

If the order is cancelled, the principal is obliged to dispose of the property held by the commission agent within a month from the date of cancellation of the order, unless a different period is established by the agreement. If the principal fails to fulfill this obligation, the commission agent has the right to either hand over the property for storage or sell it at the most favorable price for the principal.

Article 878. Refusal of a commission agent to execute an order

1. The commission agent has no right, unless otherwise provided by the contract, to refuse to execute an accepted order, except in cases where the principal’s violation of his duties entails the impossibility of executing the order in accordance with the instructions of the principal or the impossibility of execution arises due to other circumstances for which the commission agent is not responsible.

The commission agent is obliged to notify the principal in writing of his refusal and take measures to ensure the safety of the principal's property in his possession.

The principal, notified of the commission agent’s refusal to fulfill the order, is obliged to dispose of the property in the commission agent’s possession within a month from the date of receipt of the refusal, unless the contract establishes a different period. If he fails to fulfill this obligation, the commission agent has the right to either hand over the property for storage or sell it at the most favorable price for the principal.

2. A commission agent who refuses to execute an order due to the principal’s violation of his duties retains the right to a commission fee, as well as to compensation for expenses incurred.

Article 879. Termination of a commission agreement

1. If the principal cancels all instructions provided for in the commission agreement, the agreement is terminated.

2. The commission agreement is terminated, in addition to the general grounds, also due to:

1. refusal of the commission agent to fulfill the contract;

2) death of the commission agent, recognition of him as incompetent, with limited legal capacity, missing or insolvent (bankrupt).

Article 880. Refusal of the principal from an agreement concluded without specifying a period

The principal has the right at any time to refuse a commission agreement concluded without specifying a period by notifying the commission agent of the refusal no later than one month in advance, unless a longer notice period is provided for in the agreement.

In this case, the principal is obliged to pay the commission agent remuneration for transactions made by him before the termination of the contract, as well as reimburse the commission agent for the expenses incurred by him before the termination of the contract.

Article 881. Refusal of a commission agent from an agreement concluded without specifying a period

1. The commission agent has the right at any time to refuse a commission agreement concluded without specifying a period, notifying the principal of the refusal no later than one month in advance, unless a longer notice period is provided for by the agreement.

In this case, the commission agent is obliged to take measures to ensure the safety of the principal’s property in his possession. The principal is obliged to dispose of the property held by the commission agent until the termination of the contract. If he fails to fulfill this obligation, the commission agent has the right to either hand over the property for storage or sell it at the most favorable price for the principal.

2. A commission agent who has canceled the contract has the right to receive commissions and reimbursement of expenses due to him at the time of termination of the contract.

Article 882. Succession in a commission agreement

1. In the event of a reorganization of a legal entity-commission agent, its rights and obligations are transferred to its legal successors, unless within a month from the date of receipt of the notice of the reorganization the principal does not notify of the termination of the contract.

2. In the event of the death of a citizen principal, recognition of him as incompetent, partially capable, missing, as well as in the event of liquidation of a legal entity-committent, the commission agent is obliged to continue the execution of the order given to him until appropriate instructions are received from the heirs or representatives of the principal.

Chapter 44. Trust management of property

Article 883. Concept and grounds for the emergence of trust management of property

1. When establishing trust management of property, the trustee undertakes on his own behalf to manage the property transferred into his possession, use and disposal, unless otherwise provided by the agreement or legislative acts, in the interests of the beneficiary.

2. Trust management of property arises (established) on the basis of:

1. transactions (in particular, under an agreement, under a will, in which an executor of the will (trustee) is appointed);

2) a judicial act (when appointing a bankruptcy or rehabilitation manager in bankruptcy or rehabilitation procedures, establishing guardianship over the property of an incapacitated, missing or declared deceased citizen and in other cases provided for by the legislative acts of the Republic of Kazakhstan);

3) an administrative act (when establishing guardianship over the property of a deceased minor; entry of an entrepreneur into public service and in other cases provided for by legislative acts).

3. Features of trust management of property when carrying out banking activities are established by the legislative acts of the Republic of Kazakhstan regulating banking activities.

4. Features of trust management of state property are established by the legislative acts of the Republic of Kazakhstan on state property, public-private partnership and other legislative acts of the Republic of Kazakhstan.

Article 884. Subjects of trust management of property

1. The founder may be the owner, as well as a subject of other property rights or a competent body authorized to transfer property into trust management.

2. Any person can be a trustee, unless otherwise provided by legislative acts.

Appointment as a trustee can only be made with his consent.

3. The beneficiary (the person in whose interests the property is managed) can be any person who is not a trustee, as well as the state or administrative-territorial unit.

4. Unless otherwise provided by legislative acts or a property trust management agreement, the beneficiary is the founder of the property trust management.

Article 885. Objects of trust management of property

1. The object of trust management can be any property, including money, securities and property rights, unless otherwise provided by legislative acts.

2. Entrusted property is subject to accounting by the trustee separately from the property owned by him (economic management, operational management).

3. Property acquired and (or) received by the trustee in the process of fulfilling the duties assigned to him is included in the composition of the entrusted property.

4. Foreclosure of debts of the founder on property transferred by him to trust management is not allowed, except for the cases provided for in Article 1081 of this Code, as well as the bankruptcy of this person.

5. The transfer of pledged property into trust management does not deprive the pledgee of the right to foreclose on this property.

Article 886. Property trust management agreement

1. Under an agreement on trust management of property, one party (the founder of the trust management) transfers property to the other party (the trustee) for trust management, and the other party undertakes to manage this property in the interests of the person specified by the founder (the beneficiary).

During the period of validity of the property trust management agreement, the trust management founder does not have the right to carry out any actions in relation to the property under trust management, unless otherwise established by the legislative acts of the Republic of Kazakhstan or the specified agreement.

2. The property trust management agreement must provide for:

1. the subject and term of the property trust management agreement;

2) the composition of the property transferred to trust management;

3) indication of the beneficiary;

4) deadlines and form of reporting by the trustee;

5) an indication of the person receiving the entrusted property in the event of termination of the property trust management agreement.

For certain types of contracts, legislative acts may provide for other essential conditions.

The agreement may provide for other conditions, including the amount and forms of remuneration for the manager.

The agreement must indicate the rights of third parties to the property transferred to trust management.

3. The rules on a property trust management agreement apply to relations arising on other grounds for establishing trust management of property, unless otherwise follows from legislative acts or the essence of the arisen relations.

Article 887. Form of property trust management agreement

1. A property trust management agreement is concluded in writing.

2. A real estate trust management agreement is concluded in the form and procedure provided for an agreement on the alienation of real estate.

Article 888. Rights and obligations of the trustee

1. The trustee has the right to perform any actions that the owner could perform with the entrusted property for the purpose of proper management of it.

The rights of the trustee to the entrusted property may be limited by legislative acts, agreement or other act on the basis of which the trust management of the property arose.

The trustee has the right to alienate and pledge real estate only in cases where this is expressly provided for in the act establishing trust management.

2. The trustee has the right to reimbursement of necessary expenses incurred during the trust management of property, at the expense of the founder (beneficiary), or at the expense of the entrusted property, or at the expense of income from the use of the entrusted property.

The trustee has the right to remuneration if this is provided for in the act establishing trust management of property.

3. The trustee has the right to reclaim the property entrusted to him from someone else’s illegal possession, as well as to demand the elimination of violations of his right to manage, even if these violations were not related to the violation of possession.

4. The trustee provides the founder and beneficiary with a report on his activities within the time frame and in the manner established by the property trust management agreement. At the request of the founder and (or) beneficiary, a report on the activities of the trustee must be submitted immediately in other cases.

5. A transaction made by a trustee in violation of the restrictions established for him shall be recognized as valid if the third parties participating in such a transaction did not know and should not have known about such restrictions. In this case, the trustee is responsible to the founder in accordance with the agreement and legislative acts.

The obligations under a transaction made by a trustee in excess of the powers granted to him or in violation of the restrictions established for him are borne by the trustee at the expense of his property.

Article 889. Transfer of trust on the initiative of the trustee

1. The trustee carries out trust management of property personally.

2. The trustee may instruct another person to perform actions necessary to manage the property entrusted to him, if he is authorized to do so by the act on the establishment of trust management of property or is forced to do so by force of circumstances to ensure the interests of the beneficiary and does not have the opportunity to seek instructions from the founder. In this case, the trustee is responsible for the actions of the attorney he has chosen as for his own.

The trustee is obliged to immediately notify the founder of the transfer of trust. The founder, unless otherwise provided by legislative acts, in this case has the right to declare the termination of trust management of property by reimbursing the trust manager for previously incurred expenses, and if trust management is a business activity, then by compensating for losses.

Article 890. Responsibility of the trustee

1. In case of improper management of property, the founder or beneficiary may file a claim in court for termination of trust management and compensation for losses. In this case, the trustee is presumed guilty of improper performance of duties unless he proves that he has taken all measures within his power to ensure the proper performance of duties.

2. The trustee bears subsidiary liability to third parties with his property for losses caused by improper actions in property management.

Article 891. Termination of a property trust management agreement

1. A property trust management agreement, along with the general grounds for termination of obligations, is terminated:

1. the death of a citizen - trustee, declaring him dead, declaring him incompetent or partially capable, missing; liquidation of a legal entity - trustee;

2) refusal of the trustee or founder due to the impossibility of the trustee to personally manage the entrusted property;

3) refusal of the founder to fulfill the agreement, subject to payment of losses and remuneration to the trustee, if it was provided for by the agreement;

4) refusal of the trustee in case of failure to inform him about the transfer of the property encumbered with a pledge for management with the payment of remuneration to him, if it was provided for in the agreement.

2. The transfer of ownership of entrusted property does not terminate the entrusted management of the property, except for the cases provided for in paragraph 3-1 of Article 892 of this Code.

3. Upon termination of a property trust management agreement, the entrusted property is transferred to the person specified in the agreement.

4. In the event of bankruptcy of the founder, trust management of property is terminated and the entrusted property is transferred to the estate.

In the event of the death of the individual founder, the entrusted property goes to the estate.

5. When terminating the agreement at the initiative of one of the parties, the other party must be notified at least three months in advance (except for the cases provided for in subparagraphs 2) and 4) of paragraph 1 of this article), unless a different period is provided by legislative acts or the agreement.

6. The procedure and conditions for termination of trust management of securities are established by the legislation of the Republic of Kazakhstan on the securities market.

Article 892. Trust management of shares and other securities

1. The trustee has the right to carry out transactions with shares and other securities transferred to trust management and (or) acquired at the expense of entrusted property or at the expense of income from the use of entrusted property.

2. Information about the trustee of issue-grade securities is subject to reflection in the account of the trustee management founder (the owner of the property or the competent body authorized to transfer property into trust management), opened by a professional participant in the securities market in the manner established by the legislation of the Republic of Kazakhstan.

3. The trustee, when managing the shares (shares) entrusted to him, unless otherwise provided by the act on the establishment of trust management of property:

1. participates in the management of the joint-stock company;

2) receives dividends due on shares and transfers them to the beneficiary;

3) in the event of liquidation of the joint-stock company, receives the property due for the shares and transfers it in accordance with the agreement to the beneficiary or founder;

4. carries out alienation of shares and other transactions with them, including pledge.

3-1. The transfer of ownership of shares and other securities transferred into trust management terminates the trust management of these securities, unless otherwise provided by the trust management agreement and (or) the alienation agreement of shares and other securities.

In the event of a transfer of ownership of shares and securities, the requirements of this chapter established in relation to the founder of trust management of shares and other securities shall apply to the new owner of shares and other securities held in trust management.

4. Features of trust management of securities are established by the legislation of the Republic of Kazakhstan.

Article 893. Trust management of assets of investment funds

Features of trust management of investment funds' assets are carried out on the terms and in the manner established by the legislative act of the Republic of Kazakhstan on investment and venture funds.

Article 894. Trust management of an enterprise as a property complex

Trust management of an enterprise as a property complex is carried out on the terms and in the manner provided for by the act on the establishment of trust management of property, unless otherwise provided by legislative acts.

Article 895. Trust management of the property of a civil servant

The property of a civil servant used for business activities is subject to transfer to trust management in cases and in the manner provided for by the laws of the Republic of Kazakhstan

Chapter 45. Comprehensive business license (franchising)

Article 896. Concept of a comprehensive entrepreneurial license agreement

1. Under a complex business license agreement, one party (complex licensor) undertakes to provide the other party (complex licensee) for a fee with a set of exclusive rights (license complex), including, in particular, the right to use the licensor’s trade name and protected commercial information, as well as other objects of exclusive rights (trademark, service mark, patent, etc.) provided for in the agreement, for use in the licensee’s business activities.

2. A comprehensive business license agreement provides for the use of the license complex, business reputation and commercial experience of the licensor to a certain extent (in particular, establishing a minimum and (or) maximum volume of use), with or without indicating the territory of use, in relation to a certain field of activity (sale of goods received from the licensor or produced by the user, carrying out other commercial activities, performing work, providing services).

3. Restrictions on the application of a comprehensive business license agreement in certain areas of business activity are established by legislative acts.

Article 897. Form of a comprehensive entrepreneurial license agreement

A comprehensive business license agreement must be concluded in writing.

Article 897-1. Registration of the grant of the right to use an intellectual property object under a comprehensive entrepreneurial license agreement

Granting the right to use inventions, utility models, industrial designs, selection achievements, topologies of integrated circuits, trademarks (service marks), registered in accordance with the legislation of the Republic of Kazakhstan or protected without registration by virtue of international treaties, under a comprehensive entrepreneurial license agreement is subject to registration with an expert organization.

Article 898. Obligations of the licensor

The licensor is obliged, within the time frame and to the extent provided for by the agreement, to transfer to the licensee technical and commercial documentation and provide other information necessary for the licensee to exercise the rights granted to it under the agreement, as well as provide training and consultation to the licensee on issues related to the exercise of these rights.

The agreement may also provide for other obligations of the licensor.

Article 899. Obligations of the licensee

Unless otherwise provided by the contract, the licensee is obliged to:

1. use the licensor’s license complex in the manner specified in the agreement when carrying out the activities provided for in the contract;

2) allow the licensor to enter its production territory, provide it with the necessary documentation and assist in obtaining the information necessary to monitor the correct use of the granted exclusive rights;

3) comply with all instructions and directions of the licensor regarding the nature, methods and conditions of use of the exclusive rights transferred for use;

4) not to disclose the licensor’s production secrets and other confidential commercial information received from him;

5) inform buyers (customers) in the most obvious way for them that he is using a company name, trademark, service mark or other means of individualization on the basis of a comprehensive business license agreement.

Article 900. Restrictive conditions

1. A comprehensive entrepreneurial license agreement may provide for restrictive (exclusive) conditions, in particular:

1. the obligation of the licensor not to issue other similar complex business licenses for their use in the territory assigned to the licensee or to refrain from direct independent activities in this territory;

2) the obligation of the licensee not to compete with the licensor in the territory of use of the complex entrepreneurial license in relation to business activities carried out by the licensee using the exclusive rights owned by the licensor;

3) refusal of the licensee to obtain other comprehensive business licenses from competitors (potential competitors) of the licensor;

4) the obligation of the licensee to agree with the licensor on the location of the premises used in the exercise of the exclusive rights granted under the agreement, as well as their external and internal design.

2. The restrictive conditions of the complex entrepreneurial license agreement are void, due to which:

1. the licensor has the right to determine the price of sale of goods by the licensee or the price of work (services) performed (rendered) by the licensee, or set an upper or lower limit on the specified prices;

2) the licensee has the right to sell goods, perform work or provide services exclusively to a certain category of buyers (customers) or exclusively to buyers (customers) located (place of residence) in the territory specified in the contract.

Article 901. Liability of the licensor for the requirements imposed on the licensee

The licensor bears subsidiary liability for requirements imposed on the licensee regarding non-conformity of the quality of goods (work, services) sold (performed, provided) by the licensee under a comprehensive business license agreement.

Article 902. Complex entrepreneurial sublicense

1. A complex entrepreneurial license agreement may provide for the right of the licensee to allow the use of all or certain exclusive rights granted to him by other persons on the terms agreed upon by him with the licensor or specified in the agreement.

2. The complex entrepreneurial license agreement may contain the obligation of the licensee to issue, within a certain period of time, a certain number of sublicenses with or without indicating the territory of their use.

3. The rules of the main agreement between the licensor and the licensee apply to complex entrepreneurial sublicense agreements, unless otherwise follows from the specifics of the complex entrepreneurial sublicense agreement.

Article 903. Dependence of a complex entrepreneurial sublicense on the main agreement between the licensor and the licensee

1. A complex entrepreneurial sublicense agreement cannot be concluded for a longer period than the main agreement between the licensor and the licensee.

2. Termination of a complex entrepreneurial license agreement terminates all complex entrepreneurial sublicense agreements concluded in accordance with it.

3. If the main agreement of the licensor with the licensee on the grounds provided for by legislative acts is declared invalid, then the complex entrepreneurial sublicense agreements concluded in accordance with it are considered void.

Article 904. Peculiarities of relations between the licensor, licensee and sublicensee

1. Unless otherwise provided by the complex entrepreneurial license agreement, upon its early termination, the rights and obligations of the licensee under the complex entrepreneurial sublicense agreement pass to the licensor.

2. The licensee bears subsidiary liability for damage caused to the licensor by the actions of sublicensees, unless otherwise provided by the comprehensive business license agreement.

Article 905. Maintaining the contract in force when changing the company name

If the licensor changes its business name, the complex business license agreement remains valid and is valid in relation to the new business name of the licensor, unless the licensee requests termination of the agreement and compensation for damages. If the contract remains in effect, the licensee has the right to demand a proportionate reduction in the remuneration due to the licensor.

Article 906. Maintaining a contract in force when one or more exclusive rights transferred for use are changed

If the licensor changes one or more exclusive rights transferred for use, the complex entrepreneurial license agreement is preserved and is valid in relation to the new exclusive rights of the licensor, unless the licensee demands termination of the agreement and compensation for losses. If the contract remains in effect, the licensee has the right to demand a proportionate reduction in the remuneration due to the licensor.

Article 907. Consequences of termination of an exclusive right transferred for use

If, during the validity period of the complex entrepreneurial license agreement, the validity period of any exclusive right included in the complex transferred for use under the agreement has expired, or such right has terminated on another basis, then the agreement is preserved, with the exception of the provisions relating to the terminated right, and the licensee, unless otherwise provided by the agreement, has the right to demand a proportionate reduction of the remuneration due to the licensor.

Article 908. Termination of a comprehensive entrepreneurial license agreement

1. A comprehensive entrepreneurial license agreement, concluded with a specified period, may be terminated in accordance with the rules of this Code.

2. A party to an agreement has the right to cancel a perpetual agreement for a comprehensive business license by notifying the other party six months in advance, unless the agreement provides for a longer notice period.

Article 909. Succession in a comprehensive business license agreement

1. The transfer to another person of any separate exclusive right included in the licensing complex is not grounds for changing or terminating the agreement. The new copyright holder enters into an agreement regarding the rights and obligations related to the transferred exclusive right.

2. In the event of the death of a citizen licensor, his rights and obligations under the complex entrepreneurial license agreement pass to the heir, provided that the latter is registered or registers as an entrepreneur within six months from the date of opening of the inheritance. Otherwise, the contract is terminated.

Management of the licensed complex in the period before the heir assumes the corresponding rights and obligations or before the heir is registered as an entrepreneur is carried out by a trustee appointed by a notary in the prescribed manner.

Chapter 46. Competitive obligations

Article 910. Contents of the bankruptcy obligation

1. This chapter regulates competitive obligations arising from a public promise of remuneration, and obligations arising on the basis of a tender, auction and other forms of bidding established by the legislative acts of the Republic of Kazakhstan.

Competitive obligations may also be regulated by other legislative acts of the Republic of Kazakhstan.

2. In a competition obligation, its initiator, on the basis of the subject and initial conditions of the competition determined by him, makes an offer to take part in it to an indefinite or specific circle of persons and undertakes to pay the established remuneration to the winner of the competition and (or) to conclude an agreement with him that corresponds to the content of the competition obligation.

3. An offer to take part in a competition can be made by the initiator of the competition directly or through an intermediary organizer of the competition.

The rights and obligations of the intermediary are determined by his agreement with the initiator of the competition.

4. A competition can be open, when the offer of the initiator of the competition to take part in the competition is addressed to everyone by means of an announcement in the press and other media, or closed, when the offer to take part in the competition is sent to a certain circle of persons chosen by the initiator of the competition.

5. An open competition may be conditioned by the preliminary qualification of its participants, when the initiator of the competition carries out a preliminary selection of persons who wish to take part in the competition.

Article 911. Public promise of reward

1. Any person who publicly announced the payment of remuneration in monetary or other form for the best performance of work or achievement of other results must fulfill the obligation to the person who, in accordance with the terms of the competition, is recognized as its winner.

2. A public promise of remuneration must necessarily contain conditions stipulating the essence of the task, the criteria and procedure for presenting results, the amount and form of remuneration, as well as the procedure and timing for announcing results.

3. The decision to pay remuneration and its payment itself must be made and implemented within the time frame established by the promise.

4. If a competition is announced for the creation of a work of science, literature or art, the person who made the public promise acquires the preemptive right to conclude an agreement with the creator of the work for its use with the payment of a fee, unless otherwise established by the public promise of remuneration.

5. A person who has made a public promise of remuneration is obliged to return works not awarded a reward to their creators, unless otherwise provided by the terms of the competition.

Article 912. Cancellation of a public promise of reward

1. A person who has publicly announced the payment of a reward has the right to refuse this promise in the same form, except in cases where the announcement itself provides for or implies the inadmissibility of refusal or a certain period is given for performing the action for which the reward is promised, or by the time the refusal is announced at least one of the persons who responded has already performed the actions specified in the announcement.

2. Cancellation of a public promise of reward does not relieve the person who announced the reward from reimbursing the person who responded for the expenses incurred by him in connection with the commission of the action specified in the announcement. The amount of compensation in all cases cannot exceed the remuneration specified in the advertisement.

Article 913. Features of conducting lotteries, gambling and (or) betting

1. The relationship between a person who has received a license from an authorized state body to engage in activities in the field of gambling business in the Republic of Kazakhstan and a participant in gambling and (or) betting, and for lotteries - a lottery operator and a lottery participant are based on an agreement.

The agreement between the lottery operator and the lottery participant is recognized as concluded from the moment the lottery participant pays the cost of the lottery ticket, electronic lottery ticket and issuance of the lottery ticket, electronic lottery ticket.

2. Persons who, in accordance with the conditions of the lottery, gambling and (or) betting, are recognized as winners, must be paid the winnings by the organizer of gambling and (or) betting, and for lotteries - by the lottery operator.

Payment of winnings by the organizer of gambling and (or) betting in terms, amount, form (cash or in kind) is carried out in accordance with the conditions of gambling and (or) betting, but no later than three calendar days from the date of summing up the results of gambling and (or) betting.

Payment of winnings by the lottery operator is carried out within the time limits established by law, in the amount, form (cash or in kind), which are determined by the conditions of the lottery.

3. In cases of failure by the organizer of gambling and (or) betting, or the lottery operator to fulfill the obligations specified in paragraph 2 of this article, the participant who won the lottery, gambling and (or) betting, has the right to demand payment of his winnings, as well as compensation for losses caused to him.

Article 914. Requirements related to gambling and (or) betting and participation in them

The claims of citizens and legal entities related to the organization, conduct of gambling and (or) betting based on risk (gambling and (or) betting), or with participation in them, are not subject to judicial protection, with the exception of claims arising from the relations specified in Article 913 of this Code.

Article 915. Tender

1. When trading in the form of a tender, its initiator (organizer) undertakes, on the basis of the initial conditions proposed by him, to conclude an agreement (as a seller, buyer, customer, contractor, lessor, tenant, etc.) with the tender participant who offers the best contract terms for the tender initiator.

2. Tender participants, within the terms established by its terms, send their proposals in writing to the tender initiator or its organizer, attaching all the documentation required by the tender. The terms of the tender may provide for the submission of proposals in sealed envelopes and under slogans.

Violation of the deadline for submitting proposals entails the exclusion of the person who missed the deadline from among the tender participants, unless the initiator or organizer notifies this person in writing of admission to participate in the tender.

3. The selection of the winner of the tender from among its participants is made by the initiator of the tender or the tender commission created by him in a closed or, according to the terms of the tender, in an open manner.

4. A tender may be declared invalid by its initiator if less than two participants took part in it or the proposals of tender participants are recognized by its initiator as not satisfying the conditions of the tender, except for cases established by the laws of the Republic of Kazakhstan.

5. The initiator enters into a corresponding agreement with the winner of the tender. If the tender initiator refuses to conclude an appropriate agreement with the winner, the tender winner has the right to recover damages caused to him.

6. The terms of the tender may provide for the payment by each tender participant of a guarantee fee, which is returned to the participants after summing up the results of the tender. The guarantee fee is not refundable if the tenderer refuses his proposal or changes it before the tender deadline.

The guarantee fee is not returned to the winner of the tender if the winner refuses to enter into an appropriate agreement with the tender initiator on terms that meet the proposals of the winner of the tender.

Article 916. Auction

1. When trading in the form of an auction, the seller undertakes to sell the auction item to the auction participant who offers the highest price for it.

2. The auction may be held on the basis of an increase or decrease in price from that announced by the seller.

3. The terms of an auction held to reduce prices may provide for a minimum price at which an item can be sold.

4. The subject of the auction may be any movable or immovable property that has not been withdrawn from civil circulation, including intellectual property, contracts and property rights, including import, export and other quotas and licenses.

5. Offers to participate in the auction must contain information about the subject of the auction, the place and time of its holding.

6. Persons who wish to take part in the auction must, before the start of the auction, unless otherwise provided by the conditions of its conduct, submit an application for participation in the auction and pay the established amount of the guarantee fee.

7. An auction can take place if at least two participants (buyers) take part in it, except for cases established by the laws of the Republic of Kazakhstan.

8. If none of the participants wants to purchase the auction item, the original price may be reduced or the auction item may be removed from the auction.

9. Unless otherwise established by the terms of the auction, an agreement on the sale of the auction item is concluded with the auction participant who offers the highest price.

10. If the buyer refuses to conclude the agreement provided for in paragraph 9 of this article, he is excluded from the number of participants in the auction, the guarantee fee is not returned to him, and the auction item, which the buyer refused to purchase, may be put up for auction again.

11. Persons who took part in the auction, but did not buy anything at it, will receive a refund of the guarantee fee.

For persons who purchased any of the auction items, the amount of the guarantee fee is counted towards the purchase price paid.

Chapter 47. Obligations arising from causing harm

Paragraph 1. General provisions

Article 917. General grounds for liability for causing harm

1. Damage (property and (or) non-property) caused by unlawful actions (inaction) to property or non-property benefits and rights of citizens and legal entities is subject to compensation in full by the person who caused the harm.

Legislative acts may impose the obligation to compensate for harm on a person who is not the causer, and also establish a higher amount of compensation.

2. The person who caused the damage is exempt from compensation if he proves that the damage was not caused through his fault, except for the cases provided for by this Code.

3. Damage caused by lawful actions is subject to compensation in cases provided for by this Code and other legislative acts.

Article 918. Prevention of harm

1. The danger of causing harm in the future may be the basis for a claim to prohibit actions that create such a danger.

2. If the harm caused is a consequence of the operation of an enterprise, structure or other production activity that continues to cause harm or threatens new harm, the court has the right to oblige the defendant, in addition to compensation for harm, to stop the relevant activity.

The court may reject a claim to terminate the relevant activity if its termination is contrary to the public interest. Refusal to stop such activity does not deprive victims of the right to compensation for harm caused by this activity.

Article 919. Causing harm in a state of necessary defense

Damage caused in a state of necessary defense is not subject to compensation, unless its limits were exceeded.

Article 920. Causing harm in a state of extreme necessity

Damage caused in a state of extreme necessity, that is, to eliminate a danger threatening the causer himself or other persons, if this danger under the given circumstances could not be eliminated by other means, must be compensated by the person who caused the harm.

Taking into account the circumstances under which such damage was caused, the court may impose the obligation to compensate it on the third party in whose interests the person who caused the damage acted, or on this third party and the person causing the damage in a shared manner, and also exempt both this third party and the person who caused the damage from compensation for damage in whole or in part.

Article 921. Liability of a legal entity or citizen for harm caused by its employee

1. A legal entity or citizen shall compensate for damage caused by its employee in the performance of labor (official, official) duties.

2. In relation to the provisions of this Code on obligations resulting from causing harm, employees are citizens performing work on the basis of an employment contract, as well as on the basis of a civil law contract, if at the same time they acted or were supposed to act on the instructions and under the control of the relevant legal entity or citizen responsible for the safe conduct of work.

Business partnerships, joint-stock companies and production cooperatives compensate for damage caused by their participants (members) when the latter carried out entrepreneurial, production or other activities of the partnership, joint-stock company or cooperative.

Article 922. Liability for damage caused by state bodies, local government bodies, as well as their officials

1. Damage caused as a result of the issuance by state bodies of acts that do not comply with legislative acts is subject to compensation on the basis of a court decision, regardless of the guilt of the bodies and officials who issued the act. The damage is compensated from the state treasury. Representatives of the treasury are financial authorities or other authorities and citizens on special instructions.

2. Local government bodies are responsible for damage caused by their bodies and officials in court.

3. Damage caused by illegal actions (inaction) of officials of state bodies in the field of administrative management is compensated on a general basis (Article 917 of this Code) from the money at the disposal of these bodies. If they are insufficient, the damage is compensated subsidiarily from the state treasury.

Article 923. Liability for damage caused by illegal actions of the bodies of inquiry, preliminary investigation, prosecutor’s office and court

1. Harm caused to a citizen as a result of an illegal conviction, illegal prosecution, illegal use as a preventive measure of detention, house arrest, recognizance not to leave, illegal imposition of an administrative penalty in the form of arrest or correctional labor, illegal placement in a psychiatric or other medical institution, shall be compensated by the state in full, regardless of the guilt of officials of the bodies of inquiry, preliminary investigation, prosecutor's office and court, in in the manner established by legislative acts.

2. Harm caused to a citizen or legal entity as a result of other illegal activities of the bodies of inquiry, preliminary investigation, or prosecutor’s office shall be compensated on the grounds and in the manner provided for in Article 922 of this Code.

3. Harm caused by illegal actions (inaction) of judges and other court employees in the administration of justice, except for the cases provided for in paragraph 1 of this article, is compensated on a general basis and in the manner established by paragraph 3 of Article 922 of this Code.

Article 924. Compensation for damage by a person who has insured his liability

A legal entity or citizen who has insured its liability through voluntary or compulsory insurance, if the insured amount is insufficient to fully compensate for the damage caused, shall compensate the difference between the insured amount and the actual amount of damage.

Article 925. Liability for damage caused by minors under the age of fourteen

1. For harm caused to minors under fourteen years of age (minors), their legal representatives are responsible, unless they prove that the harm did not arise through their fault.

2. If a minor in need of guardianship was in an appropriate educational, medical institution, social welfare institution or other similar institution, which by force of law is his guardian, this institution is obliged to compensate for the harm caused to the minor, unless it proves that the harm arose not through his fault.

3. If a minor caused harm while he was under the supervision of an educational institution, educational, medical or other institution obligated to supervise him, as well as a person obligated to exercise supervision on the basis of an agreement, these institutions and persons are liable for the harm unless they prove that the harm arose not through their fault in exercising supervision.

4. The obligation of legal representatives, educational institutions, educational, medical and other institutions to compensate for harm does not end when the minor reaches the age of majority or receives property sufficient to compensate for the harm.

If the legal representatives have died or they, as well as other citizens specified in paragraph 3 of this article, do not have sufficient funds to compensate for the harm caused to the life and health of the victim, and the tortfeasor himself, who has become fully capable, has such funds, the court, taking into account the property status of the victim and the tortfeasor, as well as other circumstances, has the right to make a decision on compensation for damage in full or in part at the expense of the property of the tortfeasor himself.

Article 926. Liability for damage caused by minors aged fourteen to eighteen years

1. Minors aged fourteen to eighteen years are independently responsible for the harm they cause on a general basis.

2. In the event that a minor aged fourteen to eighteen years does not have property or other sources of income sufficient to compensate for damage, the damage must be compensated in full or in the missing part by his legal representatives, unless they prove that the damage did not arise through their fault.

If a minor aged fourteen to eighteen years, in need of care, was in an appropriate educational, medical institution, social protection institution or other similar institution, which by virtue of the law is his guardian, these institutions are obliged to compensate for the damage in full or in the missing part, unless they prove that the damage arose not through their fault.

3. The obligation of legal representatives and the relevant institution to compensate for harm ceases when the person causing the harm reaches the age of majority, or when, before reaching the age of majority, he acquires property or other sources of income sufficient to compensate for the harm, or when he has acquired legal capacity before reaching the age of majority (clause 2 of Article 17, Article 22-1 of this Code).

Article 927. Responsibility of parents deprived of parental rights for harm caused by minors

A court may hold a parent deprived of parental rights liable for harm caused by his minor children within three years after the parent is deprived of parental rights if it is established that the child’s behavior, which led to the harm, was a consequence of the parents’ improper performance of responsibilities for raising the child.

Article 928. Liability for damage caused by a citizen declared incompetent

1. Damage caused by a citizen declared incompetent (Article 26 of this Code) shall be compensated by his guardian or organization obliged to supervise him, unless they prove that the harm arose through no fault of theirs.

2. The obligation of a guardian or organization to compensate for damage caused by a citizen declared incompetent does not cease even if his legal capacity is restored.

3. If the guardian has died or does not have sufficient funds to compensate for the harm, and the tortfeasor himself has such funds, the court, taking into account the property status of the victim and the tortfeasor, as well as other circumstances, in particular, the restoration of the legal capacity of the tortfeasor, has the right to decide on compensation for the harm caused to the life and health of the victim, in whole or in part at the expense of the property of the tortfeasor himself.

Article 929. Liability for damage caused by a citizen recognized as having limited legal capacity

Damage caused by a citizen recognized as having limited legal capacity as a result of abuse of gambling, betting, alcoholic beverages or narcotic substances (Article 27 of this Code) is compensated by the causer himself on a general basis.

Article 930. Liability for harm caused by a citizen who is unable to understand the meaning of his actions

1. A capable citizen, as well as a minor aged fourteen to eighteen years, who caused harm in a state where they could not understand the meaning of their actions or control them, are not responsible for the harm they caused.

If harm is caused to the life or health of the victim, the court may, taking into account the property status of the victim and the causer, as well as other circumstances, impose the obligation to compensate the harm in whole or in part on the causer.

2. The causer is not exempt from liability if he himself brought himself into such a state by consuming alcoholic beverages, narcotic substances or in any other way.

3. If the harm was caused by a person who could not understand the meaning of his actions or control them due to mental illness or dementia, the obligation to compensate for the harm may be imposed by the court on his able-bodied people living with this person: spouse, parents, adult children who knew about this condition of the harm-doer, but did not raise the issue of declaring him incompetent and establishing guardianship over him.

Article 931. Liability for harm caused by activities that create an increased danger to others (a source of increased danger)

1. Legal entities and citizens whose activities are associated with an increased danger to others (transport organizations, industrial enterprises, construction sites, vehicle owners, etc.) are obliged to compensate for damage caused by a source of increased danger, unless they prove that the damage arose as a result of force majeure or the intent of the victim.

The obligation to compensate for damage is assigned to a legal entity or citizen who owns a source of increased danger on the basis of ownership, the right of economic management or the right of operational management or on any other legal basis (a property lease agreement, a power of attorney for the right to drive a vehicle, by virtue of an order of the competent authority to transfer the source, etc.).

2. Owners of sources of increased danger bear joint liability for damage caused as a result of the interaction of sources (collisions of vehicles, etc.) to third parties on the grounds provided for in paragraph 1 of this article.

Damage caused as a result of the interaction of sources of increased danger to their owners is compensated on a general basis. In this case:

1. damage caused by the fault of one party is compensated in full by that party;

2) damage caused due to the fault of both or several parties is compensated in proportion to the degree of fault of each of them.

If it is impossible to establish the degree of guilt of each party, responsibility is distributed equally between them.

If the parties are not at fault in causing harm, none of them has the right to demand compensation for harm. In this case, each party bears the risk of losses incurred by it.

3. The owner of a source of increased danger is not liable for damage caused by this source if he proves that the source was removed from the owner’s possession as a result of illegal actions of other persons. Responsibility for damage caused by a source of increased danger in such cases lies with the persons who unlawfully took possession of the source. If the owner is guilty of illegally removing a source of increased danger from his possession, liability can be imposed on both the owner and the persons who took possession of the source of increased danger.

Article 932. Liability for jointly caused damage

Persons who jointly caused harm are jointly liable to the victim.

At the request of the victim and in his interests, the court has the right to impose shared liability on the persons who jointly caused the harm.

Article 933. Right of recourse to the person who caused harm

1. A person who has compensated for damage caused by another person (an employee in the performance of his labor (official, official) duties, a person driving a vehicle, etc.) has the right to claim back (recourse) against this person in the amount of the compensation paid, unless a different amount is established by legislative acts.

2. The causer of harm, who has jointly compensated for the harm caused, has the right to demand from each of the causers a share of the compensation paid to the victim in an amount corresponding to the degree of guilt of this causer. If it is impossible to determine the degree of guilt, the shares are considered equal.

3. The state, which has compensated for the damage caused by officials of the bodies of inquiry, preliminary investigation, prosecutor's office and court (clause 1 of Article 923 of this Code), has the right of recourse to these persons in cases where the guilt of such persons is established by a court verdict that has entered into legal force.

4. Persons who have compensated for damage on the grounds specified in Articles 925-928 of this Code do not have the right of recourse (recourse) to the person who caused the harm.

Article 934. Methods of compensation for property damage

Satisfying claims for compensation for damage, the court, in accordance with the circumstances of the case, obliges the person responsible for the damage to fully compensate for the losses caused or compensate it in kind (provide an item of the same kind and quality, correct the damaged item, etc.).

Article 935. Taking into account the guilt of the victim and the property status of the person who caused the harm

1. Harm caused by the intent of the victim is not subject to compensation.

2. If the gross negligence of the victim himself contributed to the occurrence or increase of harm, then, depending on the degree of guilt of the victim and the causer of harm, the amount of compensation should be reduced, except for the cases provided for in paragraph 4 of this article.

3. In case of gross negligence of the victim and the absence of guilt of the causer in cases where his liability occurs regardless of guilt, the amount of compensation should be reduced or compensation for harm may be refused, unless legislative acts provide otherwise. If harm is caused to the life and health of a citizen, a complete refusal of compensation is not allowed.

4. The guilt of the victim is not taken into account when compensating:

additional expenses (Article 937 of this Code);

earnings (income) lost as a result of damage to health in connection with the establishment of the degree of loss of professional ability to work during the performance of his labor (official) duties (Article 938 of this Code);

harm to persons who suffered damage as a result of the death of a citizen (Article 940 of this Code);

funeral expenses (Article 946 of this Code).

5. The court may reduce the amount of compensation for damage caused by a citizen, taking into account his property status, with the exception of cases where the damage was caused by actions committed intentionally.

Paragraph 2. Compensation for harm caused to the life and health of a citizen

Article 936. Compensation for harm caused to the life and health of a citizen during the performance of contractual and other obligations

Damage caused to the life and health of a citizen during the execution of

contractual obligations, labor (official) duties, military service duties, are compensated according to the rules of this chapter, unless increased liability is provided for by legislative acts or contract.

Article 937. Scope and nature of compensation for damage caused by damage to health

1. When a citizen is injured or otherwise damaged to health, the victim’s lost earnings (income), which he had or could definitely have, as well as expenses caused by damage to health (for treatment, additional food, purchase of medicines, prosthetics, outside care, sanatorium-resort treatment, purchase of special vehicles, preparation for another profession, etc.), are subject to compensation, if it is recognized that the victim needs these types of help and care and does not receive them for free.

Expenses caused by damage to health (for treatment, additional nutrition, purchase of medicines, prosthetics, outside care, sanatorium-resort treatment, purchase of special vehicles, preparation for another profession, and others) are reimbursed by the employer who caused harm to the health of the employee, within the limits established by the Labor Code of the Republic of Kazakhstan.

2. When determining lost earnings (income), disability benefits assigned to the victim due to injury or other damage to health, other types of benefits assigned both before and after the injury to health, as well as pension payments are not counted towards compensation. Earnings received by the victim after damage to health are also not included in the compensation for harm.

3. Legislative acts or an agreement may increase the scope and amount of compensation due to the victim in accordance with this article.

Article 938. Determination of earnings (income) lost as a result of damage to health

1. The amount of lost earnings (income) subject to compensation is determined as a percentage of the average monthly earnings (income) before the injury or other damage to health or until the onset of loss of ability to work, corresponding to the degree of loss of the victim’s professional ability to work, and in the absence of it, general ability to work.

2. Lost earnings (income) include all types of wages under employment and civil contracts, both at the place of main work and part-time work, subject to individual income tax. One-time payments (compensation for unused vacation, severance pay upon dismissal, etc.) and other payments determined by the legislative acts of the Republic of Kazakhstan are not taken into account. During the period of temporary disability and maternity leave, the benefits paid are taken into account. Income from business activities, as well as royalties, are included in lost earnings, while income from business activities is included on the basis of data from the state revenue authority.

All types of earnings (income) are taken into account in amounts accrued before taxes are withheld.

3. Average monthly earnings (income) is calculated by dividing the total amount of earnings (income) for the twelve months of work preceding the injury or loss of ability to work by twelve. If the victim had been working for less than twelve months at the time of the injury, the average monthly earnings (income) is calculated by dividing the total amount of earnings (income) for the number of months actually worked prior to the injury by the number of these months.

Months not fully worked by the victim are replaced by previous fully worked months or excluded from the calculations if it is impossible to replace them.

4. In the case where the victim was not working at the time of the injury, at his request, his earnings before dismissal or the usual amount of remuneration for an employee of his qualifications in the given area are taken into account, but not less than ten times the monthly calculation index established by legislative acts.

5. If there have been sustainable changes in the earnings (income) of the victim before the injury or other damage to his health that improve his financial position (wages for his position have been increased, he has been transferred to a higher-paying job, he has started working after graduating from an educational institution, and in other cases when the stability of the change or the possibility of changing the wages of the victim has been proven), when determining his average monthly earnings (income), only the earnings (income) that he received or should have received after the relevant change.

Article 939. Compensation for damage to the health of a person under the age of majority

1. In the event of injury or other damage to the health of a minor under fourteen years of age (minor) and without income, the persons responsible for the damage are obliged to compensate the costs associated with the damage to health.

2. Upon reaching the age of fourteen by the victim, as well as in the event of harm being caused to a minor aged fourteen to eighteen years who does not have earnings (income), those responsible for the harm are obliged to compensate the victim, in addition to expenses caused by damage to health, also harm associated with the loss or decrease in his ability to work, based on the tenfold monthly calculation index established by legislative acts.

If at the time of damage to health the minor had earnings, then the damage is compensated based on the amount of this earnings, but not less than ten times the monthly calculation index established by legislative acts.

After starting work, the victim has the right to demand an increase in compensation for harm based on the earnings he receives, but not lower than the amount of remuneration established for his position or the earnings of an employee of the same qualification at his place of work.

Article 940. Compensation for damage to persons who suffered damage as a result of the death of a citizen

1. In the event of the death of a citizen, disabled persons who were dependent on the deceased or who had the right to receive maintenance from him on the day of his death have the right to compensation for harm; a child of the deceased, born after his death, as well as one of the parents, spouse or other family member, regardless of ability to work, who does not work and is busy caring for his dependent children, grandchildren, brothers and sisters who have not reached fourteen years of age (minors) or, although they have reached the specified age, but, according to the conclusion of medical authorities, require outside care for health reasons.

2. Persons who were dependent on a deceased citizen and who became disabled within five years after his death also have the right to compensation for damage.

One of the parents, spouse or other family member who is not working and is caring for the children, grandchildren, brothers and sisters of the deceased specified in paragraph 1 of this article, and who became disabled during the period of care, retains the right to compensation for damage after the end of care for these persons.

3. Damage is compensated for: minors - up to the age of eighteen; students aged eighteen years and older - until graduation from full-time educational institutions, but not more than twenty-three years of age; for persons who have reached the retirement age established by the legislation of the Republic of Kazakhstan on social protection - for life; for persons with disabilities - for the period of disability; one of the parents, spouse or other family member caring for the deceased’s dependent children, grandchildren, brothers and sisters - until they reach fourteen years of age or their health status changes.

Article 941. Amount of compensation for damage incurred in the event of the death of a citizen

1. Persons entitled to compensation for damage in connection with the death of a citizen shall be compensated for damage in the amount of that share of the earnings (income) of the deceased, calculated according to the rules of Article 938 of this Code, which they received or had the right to receive for their maintenance during his life. When determining compensation for damage to these persons, the income of the deceased, along with earnings, includes the pension, lifelong allowance and other similar payments he received during his lifetime.

2. When determining the amount of compensation for harm, benefits assigned to persons in the event of the loss of a breadwinner, other types of benefits assigned both before and after the death of the breadwinner, as well as earnings, scholarships, and pension payments are not taken into account.

3. The amount of compensation established for each of those entitled to compensation for damage in the event of the loss of a breadwinner is not subject to further recalculation, except in cases of the birth of a child after the death of the breadwinner; appointment (termination) of payment of compensation to persons caring for children, grandchildren, brothers and sisters of the deceased breadwinner.

The scope and amount of compensation may be increased by legislative act or agreement.

Article 942. Change in the amount of compensation for damage

1. A victim who has partially lost his ability to work has the right at any time to demand from the person charged with compensation for harm, a corresponding increase in the amount of compensation if his ability to work has decreased due to the damage caused to his health compared to what remained with him at the time compensation was awarded to him.

2. Persons charged with the obligation to compensate for harm associated with damage to the victim’s health have the right to demand a corresponding reduction in the amount of compensation if the victim’s ability to work has increased compared to what remained with him at the time of awarding compensation for harm.

3. The victim has the right to demand an increase in the amount of compensation for harm if the financial situation of the citizen who is charged with the obligation to compensate for harm has improved, and the amount of compensation has been reduced in accordance with paragraph 5 of Article 935 of this Code.

4. The court may, at the request of the citizen who caused the harm, reduce the amount of compensation for harm if his property situation due to disability or reaching retirement age has worsened compared to what it was at the time compensation was awarded (clause 5 of Article 935 of this Code).

Article 943. Increase in compensation for damage due to an increase in the cost of living

The amounts of compensation paid to citizens in connection with damage to the health or death of the victim increase annually in proportion to the average value of the projected inflation rate.

Article 944. Payments for compensation of damage

1. Compensation for damage associated with decreased working capacity or death of the victim is made in monthly payments.

Compensation for damage in terms of lost earnings to the victim during the performance of his labor (official) duties is carried out for the period of determining the degree of loss of ability to work, but not more than he reaches the retirement age established by the legislation of the Republic of Kazakhstan on social protection.

At the same time, from the amounts of compensation for damage in terms of lost earnings (income), mandatory pension contributions are withheld and transferred to the unified accumulative pension fund in the amount and manner established by the legislation of the Republic of Kazakhstan on social protection.

If there are good reasons, the court, taking into account the capabilities of the tortfeasor, may, at the request of a citizen entitled to compensation, award him the due payments in a lump sum, but not more than for three years.

2. Collection of additional expenses can be made for the future within the time limits established on the basis of the conclusion of a medical examination, as well as if it is necessary to pre-pay the cost of services and property (purchase of a voucher, payment for travel, payment for special vehicles, etc.).

3. In cases where the victim, in accordance with legislative acts, has the right to demand termination or early fulfillment of an obligation, such a requirement is satisfied by capitalizing the corresponding time-based payments.

Article 945. Compensation for damage in case of termination of a legal entity

1. In the event of reorganization of a legal entity recognized in accordance with the established procedure as responsible for harm caused to life and health, the obligation to pay the appropriate payments lies with its legal successor. Claims for damages are also being made against him.

2. In the event of liquidation of a legal entity recognized in accordance with the established procedure as responsible for harm caused to life and health, the corresponding payments must be capitalized for payment to the victim in the manner prescribed by the legislation of the Republic of Kazakhstan.

3. In cases where capitalization of payments cannot be made due to the absence or insufficiency of property of the liquidated legal entity, the awarded amounts are paid to the injured party by the state in the manner prescribed by the legislation of the Republic of Kazakhstan.

4. After the completion of the period of capitalization of payments for compensation for harm caused to the life and health of employees, legal entities liquidated as a result of bankruptcy, a citizen of the Republic of Kazakhstan is provided with social assistance in the form of monthly payments in the manner established by the Government of the Republic of Kazakhstan, the size of which increases annually in proportion to the average value of the projected inflation rate.

Article 946. Reimbursement of funeral expenses

Persons responsible for damage associated with the death of the victim are obliged to compensate the necessary funeral expenses to the person who incurred these expenses.

Funeral benefits received by citizens who incurred these expenses are not counted toward compensation for damage.

Paragraph 3. Compensation for damage caused by defects in goods, works, services

Article 947. Grounds for compensation for damage caused as a result of defects in goods, works, services

Damage caused to the life, health or property of a citizen or the property of a legal entity due to design, prescription or other defects of a product (work, service), as well as due to unreliable or insufficient information about the product (work, service), is subject to compensation by the seller or manufacturer (performer), regardless of their guilt and whether the victim was in a contractual relationship with them or not. This rule applies only in cases of purchasing goods (work, services) for consumer purposes.

Article 948. Persons responsible for damage caused as a result of defects in goods, works, services

1. Damage caused as a result of defects in the goods is subject to compensation at the choice of the victim by the seller or manufacturer of the goods.

2. Damage caused as a result of deficiencies in work or services is subject to compensation by the performer.

3. Damage caused as a result of failure to provide complete or reliable information about the properties and rules for using a product (work, service) is subject to compensation in accordance with the rules of paragraphs 1 and 2 of this article.

Article 949. Terms of compensation for damage caused as a result of defects in goods, works, services

1. Damage caused by defects in a product (work, service) is subject to compensation if it is caused during the established shelf life (service) of the product (work, service), and if the shelf life (service) is not established - within ten years from the date of production of the product (work, service).

2. Outside the time limits specified in paragraph 1 of this article, damage is subject to compensation:

1. if, in violation of the requirements of legislative acts, the shelf life (service) is not established;

2) if the buyer (consumer) was not warned about the necessary actions after the expiration date (service) and about the possible consequences of failure to perform these actions.

Article 950. Grounds for exemption from liability for damage caused as a result of defects in goods, works, services

The seller or manufacturer of goods, performer of work or services are released from liability only in cases where they prove that the damage arose as a result of force majeure or violation by the consumer of the rules for using the goods (results of work, services) or their storage.

Paragraph 4. Compensation for moral damage

Article 951. Compensation for moral damage

1. Moral harm is a violation, derogation or deprivation of personal non-property benefits and rights of individuals, including moral or physical suffering (humiliation, irritation, depression, anger, shame, despair, physical pain, inferiority, discomfort, etc.) experienced (suffered, experienced) by the victim as a result of an offense committed against him, and in the event of his death as a result of such an offense - by his close relatives, spouse (wife).

2. Moral damage is compensated by the causer if the causer is at fault, with the exception of the cases provided for in paragraph 3 of this article.

3. Moral damage is compensated, regardless of the fault of the perpetrator, in cases where:

1. harm was caused to the life and health of a citizen by a source of increased danger;

2) harm was caused to a citizen as a result of his illegal conviction, illegal prosecution, illegal use of detention as a preventive measure, house arrest or recognizance not to leave, illegal imposition of an administrative penalty in the form of arrest, illegal placement in a psychiatric hospital or other medical institution;

3) harm was caused by the dissemination of information discrediting honor, dignity and business reputation;

4) other cases provided for by legislative acts.

4. Moral damage caused by actions (inaction) that violate the property rights of a citizen is not subject to compensation, except in cases provided for by legislative acts.

Article 952. Amount of compensation for moral damage

1. Moral damage is compensated in monetary form.

2. When determining the amount of moral damage, both the subjective assessment of the victim or, in the event of his death as a result of an offense committed against him by close relatives or a spouse, the severity of the moral damage caused, and objective data indicating the degree of moral and physical suffering of the victim or in the event of his death of close relatives, a spouse are taken into account: the vital importance of the good that was the object of the attack (life, health, honor, dignity, freedom, inviolability of home, etc.); the severity of the consequences of the offense (murder of close relatives, infliction of bodily harm resulting in disability, imprisonment, deprivation of work or housing, etc.); the nature and scope of dissemination of false defamatory information; living conditions of the victim (work, family, household, financial, health, age, etc.), other circumstances worthy of attention.

3. Moral damage is compensated regardless of the property damage subject to compensation.

Chapter 48. Liabilities due to unjust enrichment

Article 953. Obligation to return unjust enrichment

1. A person (acquirer) who, without the grounds established by law or the transaction, acquired or saved property (unjustly enriched himself) at the expense of another person (victim), is obliged to return to the latter the unjustifiably acquired or saved property, except for the cases provided for in Article 960 of this Code.

2. The obligation established by paragraph 1 of this article also arises if the basis on which the property was acquired or saved subsequently ceases to exist.

3. The rules of this chapter apply regardless of whether unjust enrichment was the result of the behavior of the acquirer of the property, the victim himself or third parties, or a consequence of the event.

Article 954. Correlation of claims for the return of unjust enrichment with other claims for the protection of civil rights

Unless otherwise established by this Code, other legislative acts and does not follow from the essence of the relevant relations, the rules of this chapter are also subject to application to the requirements:

1. on the return of what was executed under an invalid transaction;

2) on the reclaiming of property by the owner from someone else’s illegal possession;

3) one party to an obligation to another to return what has been performed in connection with this obligation;

4) for compensation for damage, including damage caused by the dishonest behavior of the person who became rich.

Article 955. Return of unjust enrichment in kind

1. Property constituting unjust enrichment of the acquirer must be returned to the victim in kind.

2. The acquirer is liable to the victim for any, including accidental shortage or deterioration of unjustifiably acquired or saved property that occurred after he learned or should have learned about the unjustified enrichment. Until this moment, he is responsible only for intent and gross negligence.

Article 956. Compensation for the cost of unjust enrichment

1. If it is impossible to return in kind unjustly acquired or saved property, the acquirer must compensate the victim for the real value of this property at the time of its acquisition, as well as compensate for losses caused by a subsequent change in the value of the property, if the acquirer did not reimburse its value immediately after learning of the unjustified enrichment.

2. A person who has unjustifiably temporarily used someone else’s property (without the intention of acquiring it) or someone else’s services must compensate the victim for what he saved as a result of such use, at the price that existed at the time the use ended and in the place where it took place.

Article 957. Consequences of unjustified transfer of rights to another person

A person who has transferred by assignment of a claim or otherwise a right belonging to him to another person on the basis of a non-existent or invalid obligation has the right to demand restoration of the previous position, including the return to him of documents certifying the transferred right.

Article 958. Compensation to the victim for lost income

1. A person who unjustifiably received or saved property is obliged to return or compensate to the victim all the income that he received or should have received from this property from the time he learned or should have learned about the unjustified enrichment.

2. A penalty for the use of someone else’s money is subject to accrual for the amount of unjust monetary enrichment from the time when the acquirer learned or should have learned about the unjustification of receiving or saving money.

Article 959. Reimbursement of expenses for property subject to return

When returning unjustifiably acquired or saved property (Article 955 of this Code) or reimbursement of its value (Article 956 of this Code), the acquirer has the right to demand from the victim compensation for the necessary expenses incurred for the maintenance and preservation of the property from the time from which he is obliged to return the income (Article 958 of this Code), with an offset to the benefits received by him. The right to reimbursement of costs is lost in cases where the acquirer intentionally withheld property that was subject to return.

Article 960. Unjust enrichment that is not subject to return

The following cannot be returned as unjust enrichment:

1. property transferred in fulfillment of an obligation before the deadline for fulfillment, unless otherwise provided by the obligation;

2) property transferred in fulfillment of an obligation after the expiration of the limitation period;

3) sums of money and other property provided to a citizen, in the absence of dishonesty on his part, as a means of subsistence (wages, royalties, compensation for harm to life or health, pension, alimony, etc.) and used by the acquirer;

4) sums of money and other property provided in fulfillment of a non-existent obligation, if the acquirer proves that the person demanding the return of the property knew about

absence of obligation or provided property for charitable purposes.

Section 5. Intellectual Property Rights

Chapter 49. General provisions

Article 961. Objects of intellectual property rights

1. Objects of intellectual property rights include:

1. results of intellectual creative activity;

2) means of individualization of participants in civil transactions, goods, works or services.

2. The results of intellectual creative activity include:

1. works of science, literature and art;

2) performance, staging, phonograms and broadcasts by broadcasting and cable broadcasting organizations;

3) inventions, utility models, industrial designs;

4) selection achievements;

5) topology of integrated circuits;

6) undisclosed information, including production secrets (know-how);

7) other results of intellectual creative activity in cases provided for by this Code or other legislative acts.

3. The means of individualization of participants in civil transactions, goods, works or services include:

1. brand names;

2) trademarks (service marks);

2-1) geographical indications;

3) names of places of origin of goods;

4) other means of individualization of participants in civil transactions, goods and services in cases provided for by this Code and legislative acts.

Article 962. Grounds for the emergence of rights to intellectual property objects

Rights to intellectual property objects arise due to the fact of their creation or as a result of the provision of legal protection by an authorized state body in cases and in the manner provided for by this Code and other legislative acts.

Article 963. Personal non-property and property rights to intellectual property objects

1. The authors of the results of intellectual creative activity shall have personal non-property and property rights in relation to these results.

Personal non-property rights belong to the author, regardless of his property rights, and are retained by him in the event of the transfer of his property rights to the results of intellectual creative activity to another person.

2. Holders of the right to means of individualization of participants in civil transactions, goods or services (hereinafter referred to as means of individualization) shall have property rights in relation to these means.

3. The right to be recognized as the author of the result of intellectual creative activity (the right of authorship) is a personal non-property right and can only belong to the person whose creative work created the result of intellectual creative activity.

The right of authorship is inalienable and non-transferable.

If the result was created by the joint creative work of two or more people, they are recognized as co-authors. In relation to certain objects of intellectual property, legislative acts may limit the circle of persons who are recognized as co-authors of the work as a whole.

Article 964. Exclusive rights to intellectual property objects

1. The exclusive right to the result of intellectual creative activity or a means of individualization is recognized as the property right of their owner to use the object of intellectual property in any way at his own discretion.

Use of an object of exclusive rights by other persons is permitted with the consent of the copyright holder or in other cases provided for by the laws of the Republic of Kazakhstan.

2. The owner of an exclusive right to an object of intellectual property has the right to transfer this right to another person in whole or in part, to allow the use of an object of intellectual property and to dispose of it in another way, if this does not contradict the rules of this Code and other legislative acts.

3. Restrictions on exclusive rights, recognition of these rights as invalid and their termination (cancellation) are permitted in the cases, limits and procedure established by this Code and other legislative acts.

Article 965. Transfer of exclusive rights to another person

1. Exclusive rights to an object of intellectual property, unless otherwise provided by this Code or other legislative acts, may be transferred by their copyright holder in whole or in part under an agreement to another person, and also transferred in the order of universal succession by inheritance and as a result of the reorganization of a legal entity - the copyright holder.

The transfer of exclusive rights should not limit the exercise of the right of authorship and other non-property rights. The terms of the agreement on the transfer or limitation of such rights are void.

2. The rules on a license agreement (Article 966 of this Code) apply to an agreement providing for the granting of an exclusive right during the period of its validity to another person for a limited time.

Article 966. License agreement

1. Under a license agreement, the party that has the exclusive right to the result of intellectual creative activity or to a means of individualization (licensor) grants the other party (licensee) the right to temporarily use the corresponding object of intellectual property in a certain way.

The license agreement is supposed to be paid.

2. A license agreement may provide for the provision to the licensee of:

1. the right to use an object of intellectual property with the licensor retaining the possibility of its use and the right to issue a license to other persons (simple, non-exclusive license);

2) the right to use an object of intellectual property without retaining the licensor’s ability to use it and without the right to issue a license to other persons (exclusive license);

3) other conditions for the use of the intellectual property object that do not contradict legislative acts.

Unless otherwise provided in the license agreement, the license is assumed to be simple (non-exclusive).

3. An agreement on granting the licensee the right to use an object of intellectual property to another person is recognized as a sublicensing agreement. The licensee has the right to enter into a sublicense agreement only in cases provided for in the license agreement.

The licensee is responsible to the licensor for the actions of the sublicensee, unless otherwise provided in the license agreement.

Article 967. Agreement on the creation and use of the results of intellectual creative activity

1. The author may undertake a contractual obligation to create a work, invention or other result of intellectual creative activity and provide the customer, who is not his employer, with exclusive rights to use it.

2. The agreement provided for in paragraph 1 of this article must determine the nature of the result of intellectual creative activity to be created, as well as the purposes or methods of its use.

3. The terms of the contract that limit the right of the author to create the results of intellectual creative activity of a certain kind or in a certain area are void.

Article 968. Exclusive right and right of ownership

The exclusive right to the result of intellectual creative activity or a means of individualization exists regardless of the ownership of the material object in which such result or means of individualization is expressed.

Article 969. Validity period of exclusive rights

1. The exclusive right to intellectual property is valid for the period provided for by this Code or other legislative acts.

Legislative acts may provide for the possibility of extending such a period.

2. Personal non-property rights to the results of intellectual creative activity are valid indefinitely.

3. In cases provided for by legislative acts, an exclusive right may be terminated due to its non-use for a certain time.

Article 970. Methods of protecting exclusive rights

1. Protection of exclusive rights is carried out by the methods provided for in Article 9 of this Code. Protection of exclusive rights can also be carried out by:

1. seizure of material objects with the use of which exclusive rights have been violated, and material objects created as a result of such violation;

2) mandatory publication of the violation, including information about who owns the violated right;

3) in other ways provided for by legislative acts.

2. In case of violation of agreements on the use of the results of intellectual creative activity and means of individualization, the general rules on liability for violation of obligations are applied (Chapter 20 of this Code).

Chapter 50. Copyright

Article 971. Works protected by copyright (objects of copyright)

1. Copyright applies to works of science, literature and art that are the result of creative activity, regardless of their purpose, content and merit, as well as the method and form of their expression.

2. Copyright applies to both published (published, published, published, publicly performed, publicly displayed) and unpublished works that exist in any objective form:

1. written (manuscript, typescript, musical notation, etc.);

2) oral (public utterance, public performance, etc.);

3) sound or video recording (mechanical, digital, magnetic, optical, etc.);

4) images (drawing, sketch, painting, plan, drawing, film, television, video or photograph, etc.);

5) volumetric-spatial (sculpture, model, layout, structure, etc.);

6) other forms.

3. Part of the work (including its title, names of characters), which has the characteristics specified in paragraph 1 of this article and can be used independently, is the subject of copyright.

4. Copyright does not apply to the actual ideas, concepts, principles, methods, systems, processes, discoveries, facts.

Article 972. Types of copyright objects

1. The objects of copyright are:

1. literary works;

2) dramatic and musical-dramatic works;

3) script works;

4) works of choreography and pantomime;

5) musical works with or without text;

6) audio-visual works;

7) works of painting, sculpture, graphics and other works of fine art;

8) works of decorative and applied art;

9) works of architecture, urban planning, design and landscape art;

10) photographic works and works obtained by methods similar to photography;

11) maps, plans, sketches, illustrations and three-dimensional works related to geography, topography and other sciences;

12) computer programs (software);

13) other works.

2. Protection of computer programs (software) applies to all types of computer programs (software) (including operating systems), which can be expressed in any language and in any form, including source text and object code.

3. Objects of copyright also include:

1. derivative works (translations, adaptations, annotations, abstracts, summaries, reviews, dramatizations, musical arrangements and other processing of works of science, literature and art);

2) collections (encyclopedias, anthologies, databases) and other composite works that, in the selection and (or) arrangement of materials, are the result of creative work.

Derivative and composite works are protected by copyright regardless of whether the works on which they are based or which they include are copyrighted.

Article 973. Legal regulation of copyright relations

Copyright relations are regulated by this Code and other legislative acts on copyright and related rights, and in cases provided for by them, and other legislative acts.

Article 974. Works that are not objects of copyright

The following are not subject to copyright:

1. official documents (laws, court decisions, other texts of a legislative, administrative, judicial and diplomatic nature), as well as their official translations;

2) state symbols and signs (flags, coats of arms, orders, banknotes and other state symbols and signs);

3) works of folk art;

4) messages about events and facts of an informational nature;

5) other objects provided for by the laws of the Republic of Kazakhstan.

Article 975. Rights to draft official documents, state symbols and signs

1. The right of authorship to draft official documents, state symbols and signs belongs to the person who created the projects (developer).

Developers of draft official documents, symbols and signs have the right to publish such projects, unless this is prohibited by the body on whose behalf the development was carried out. When publishing a project, developers have the right to indicate their name.

2. The draft may be used by the competent authority to prepare an official document without the consent of the developer if this draft is published by the author or sent by him to the relevant authority.

When preparing official documents, state symbols or signs based on the project, additions and changes may be made to it at the discretion of the body preparing the official document, state symbol or sign.

3. After acceptance of the project by the competent authority, it can be used without indicating the name of the developer and without paying royalties.

Article 976. Copyright protection mark

1. The owner of an exclusive copyright may, to notify of his rights, use a copyright sign, which is placed on each copy of the work and consists of three elements:

1. the Latin letter "C" in a circle;

2) the name (title) of the owner of exclusive copyright;

3) the year of first publication of the work.

2. Unless proven otherwise, the owner of the exclusive copyright is the person designated in the sign of protection.

Article 977. Personal non-property rights of the author

1. The author of the work has the following personal non-property rights:

1. the right to be recognized as the author of a work and to demand such recognition when using it, excluding recognition of the authorship of other persons for the same work (the right of authorship);

2) the right to use the work under one’s own name, under a pseudonym or anonymously (the right to the author’s name);

3) the right to make changes and additions to one’s work and to protect the work, including its name, from changes and additions made by anyone without the consent of the author during publication, public performance or other use of the work (the right to inviolability of the work).

It is prohibited to provide his work with illustrations, prefaces, afterwords, comments or any explanations during publication without the consent of the author.

After the death of the author, the protection of the inviolability of the work is carried out by the person indicated in the will, and in the absence of such instructions - by the heirs of the author, as well as by persons who, in accordance with legislative acts, are entrusted with the protection of copyright;

4) the right to open access to a work to an indefinite number of persons (the right to publication), with the exception of works created in the performance of official duties or an official assignment of the employer.

2. The author has the right to refuse a previously made decision to publish the work (the right to withdraw), subject to compensation to the user for losses caused by such a decision, including lost profits. If the work has already been published, the author is obliged to publicly notify about its revocation. At the same time, he has the right to withdraw from circulation previously produced copies of the work at his own expense.

The provisions of this paragraph do not apply to official works.

3. An agreement between the author and anyone or the author’s statement about refusal to exercise personal non-property rights is void.

Article 978. Property rights of the author

1. The author owns the exclusive rights to use the work in any form and in any way.

2. The exclusive rights of the author to use the work mean the right to carry out, permit or prohibit the following actions:

1. reproduce the work (right of reproduction);

2) distribute the original or copies of the work in any way: sell, exchange, rent out (rent), perform other operations, including in an open information and communication network (distribution right);

3) publicly display the work (right to public display);

4) publicly perform the work (right of public performance);

5) publicly communicate the work to the public, including broadcast or cable communication (right of public communication);

6) broadcast the work (broadcast on radio and television), including broadcast via cable or satellite (the right to broadcast);

7) translate the work (the right to translate);

8) remake, arrange or otherwise process the work (the right to processing);

9) practically implement an urban planning, architectural, design project;

10) carry out other actions that do not contradict legislative acts.

4. If copies of a legally published work are introduced into civil circulation through their sale, then their further distribution is allowed without the consent of the author and without payment of royalties, except for cases provided for by the legislative acts of the Republic of Kazakhstan.

5. A work is considered used, regardless of whether it was sold for the purpose of generating income or its sale was not aimed at this.

6. The practical application of the provisions that make up the content of the work (inventions, other technical, economic, organizational, etc. decisions) does not constitute the use of the work in the sense of copyright.

Article 979. Deposit of works

1. Depositing manuscripts of works and other works on a tangible medium, including computer ones, is recognized as using the work if such depositing is made in each repository (depository) that is open to access and allows any person to receive a copy of the work under an agreement with the depository.

2. The deposit of a work is carried out on the basis of an agreement between the copyright holder and the depositary, establishing the conditions for use of the work. Such an agreement and the agreement between the depositary and the user are public (Article 387 of this Code).

Article 980. Effect of copyright on the territory of the Republic of Kazakhstan

1. Copyright in a work first published on the territory of the Republic of Kazakhstan or not published, but the original of which is located on its territory in any objective form, is valid on the territory of the Republic of Kazakhstan. In this case, copyright is recognized by the author and (or) his heirs, as well as other legal successors of the author, regardless of their citizenship.

2. Copyright is also recognized for citizens of the Republic of Kazakhstan, whose works were first published or are in any objective form on the territory of a foreign state, as well as for their legal successors.

3. When granting copyright protection to the owner in accordance with international treaties, the fact of publication of the work on the territory of a foreign state is determined in accordance with the provisions of the relevant international treaty.

4. In order to protect a work in the territory of the Republic of Kazakhstan, the author of the work is determined according to the laws of the state in whose territory the work first became protected.

Article 981. Commencement of copyright

Copyright in a work begins to operate from the moment the work is given an objective form accessible to third parties, regardless of its publication. Copyright in an oral work is valid from the moment it is communicated to third parties.

If a work does not fall under Article 980 of this Code, the copyright for such a work is protected from the moment the work is first published if it is made in the Republic of Kazakhstan.

Article 982. Duration of copyright

1. Copyright is valid throughout the life of the author and seventy years after his death, counting from the first January of the year following the year of death of the author.

2. Copyright in a work created in co-authorship is valid for the entire life of the co-authors and seventy years after the death of the last of the authors who survived the other co-authors.

3. Copyright in a work first published under a pseudonym or anonymously is valid for seventy years, counting from the first of January of the year following the year of publication of the work.

If during the specified period the anonymous person or pseudonym is disclosed, then the terms established by paragraph 1 of this article apply.

4. During the periods specified in paragraph 1 of this article, copyright belongs to the heirs of the author and is inherited, belongs to legal successors who received the right under an agreement with the author, his heirs and subsequent legal successors.

5. Copyright in a work first published within thirty years after the death of the author is valid for seventy years after its publication, counting from January 1 of the year following the year of publication of the work.

6. Authorship, the name of the author and the inviolability of the work are protected indefinitely.

Article 983. Transfer of a work into the public domain

1. Upon expiration of the copyright term for a work, it becomes public domain.

2. Works that are in the public domain may be freely used by anyone without payment of royalties. In this case, the right of authorship, the right to the copyright name and the right to the integrity of the work must be respected.

Article 984. Copyright management

1. The copyright holder has the right to exercise his rights personally, at his own discretion. Other persons may manage copyrights only with the consent of the copyright holder and within the powers granted to him, with the exception of the rights provided for in Article 977 of this Code, when representation is carried out by a legal representative.

2. In accordance with the procedure established by legislative acts, holders of copyright and related rights may create organizations that are entrusted with the management of copyright and related rights.

Chapter 51. Related rights

Article 985. Objects of related rights

Related rights apply to productions, performances, phonograms, broadcasts of broadcasting and cable broadcasting organizations, regardless of their purpose, content and merit, as well as the method and form of their expression.

Article 986. Subjects of related rights

1. Subjects of related rights are performers, producers of phonograms and broadcasting and cable broadcasting organizations.

2. The producer of a phonogram, broadcasting and cable broadcasting organizations shall exercise the rights provided for by this chapter, within the limits of the rights obtained under an agreement with the performer and author of the work recorded on the phonogram or transmitted on air or by cable.

3. The performer exercises the rights provided for by this chapter and in accordance with the legislation of the Republic of Kazakhstan, subject to the rights of the authors of the performed work.

4. For the emergence and exercise of related rights, registration of works or compliance with any other formal requirements is not required.

5. The producer of a phonogram and (or) performer, to notify about his rights, has the right to use a sign of protection of related rights, which is placed on each copy of the recording of the performance, phonogram and (or) on each case containing it and consists of three elements:

1. the Latin letter "P" in a circle;

2) the name (name) of the owner of exclusive related rights;

3) the year of first publication of the recording of the performance, phonogram.

6. Unless otherwise proven, the producer of the phonogram is the individual or legal entity whose name is indicated on the phonogram and (or) the case containing it.

Article 987. Effect of related rights

1. The right of a performer to a performance that first took place on the territory of the Republic of Kazakhstan is valid on the territory of the Republic of Kazakhstan. In this case, the right is recognized for the performer and his heirs, as well as for other legal successors of the performer, regardless of citizenship.

The right of the performer is also recognized for him in cases where the performance is first carried out on the territory of a foreign state, as well as for his legal successors.

2. The rights of the producer of a phonogram are valid in the territory of the Republic of Kazakhstan if this recording was publicly reproduced for the first time or its copies were publicly distributed in the Republic of Kazakhstan.

The rights of the producer of a phonogram are also recognized for citizens of the Republic of Kazakhstan or legal entities having a place of residence or location in the territory of the Republic of Kazakhstan.

3. The rights of an organization of on-air or cable broadcasting are recognized for it if the organization has an official location on the territory of the Republic of Kazakhstan and transmits using transmitters located on the territory of the Republic of Kazakhstan.

4. The rights of other foreign performers, producers of phonograms, broadcasting or cable broadcasting organizations are protected on the territory of the Republic of Kazakhstan in accordance with international treaties ratified by the Republic of Kazakhstan.

Article 988. Regulation of the rights of subjects of related rights

The scope and content of the exclusive and other rights of the performer, the producer of the phonogram, the organization of broadcasting and cable broadcasting, as well as the cases and limits of restriction of the exclusive rights of these entities and liability for their violation are regulated by legislative acts.

Article 989. Duration of validity of related rights

1. Related rights in relation to the performer are valid for seventy years after the first performance or production. The performer's rights to the name and to protection of the performance or production from distortion are protected indefinitely.

2. Related rights in relation to the producer of a phonogram are valid for seventy years after the first publication of the phonogram or for seventy years after its first recording, if the phonogram was not made public within this period.

3. Related rights in relation to an organization of broadcasting are valid for seventy years after the first broadcast by such organization.

4. Related rights in relation to a cable broadcasting organization are valid for seventy years after such organization makes its first cable broadcast.

5. The calculation of the periods provided for in paragraphs 1-4 of this article begins on the first of January of the year following the year in which the legal fact occurred, which is the basis for the start of the period.

Article 990. Rights of performers, producers of phonograms, broadcasting and cable broadcasting organizations who are foreign citizens or foreign legal entities

The rights of performers, producers of phonograms, broadcasting and cable broadcasting organizations who are foreign citizens or foreign legal entities, if they carried out the first production, performance, recording or broadcast outside the territory of the Republic of Kazakhstan, are valid on its territory in accordance with international treaties ratified by the Republic of Kazakhstan.

Chapter 52. The right to an invention, utility model, industrial design

Article 991. Conditions for legal protection of an invention, utility model, industrial design

1. Rights to an invention, utility model and industrial design are protected by a patent.

2. An invention that is granted legal protection is recognized as a technical solution that is new, has an inventive step and is industrially applicable.

3. A utility model that is granted legal protection is a technical solution that is new and industrially applicable.

4. An industrial design, which is granted legal protection, is recognized as an artistic and design solution of a product that determines its appearance and is new and original.

5. The requirements for the conditions of patentability of an invention, utility model, industrial design, under which the right to obtain a patent arises, are determined by the Law of the Republic of Kazakhstan “Patent Law of the Republic of Kazakhstan”.

6. The list of non-patentable technical solutions, artistic and design solutions for products is determined by legislative acts.

Article 992. The right to use an invention, utility model, industrial design

1. The patent holder has the exclusive right to use a patent-protected invention, utility model, industrial design at his own discretion, including the right to produce a product using protected solutions, to use patent-protected technological processes in his own production, to sell or offer for sale products containing protected solutions, and to import relevant products.

2. Other persons do not have the right to use an invention, utility model, industrial design without the permission of the patent holder, except in cases where such use in accordance with this Code or other legislative acts does not constitute a violation of the rights of the patent holder.

3. A violation of the exclusive right of the patent holder is recognized as the unauthorized manufacture, use, import, offer for sale, sale, other introduction into civil circulation or storage for this purpose of a product made using a patented invention, utility model or industrial design, as well as the use of a method protected by a patent for an invention, or introduction into civil circulation or storage for this purpose of a product manufactured directly by a method protected by a patent for an invention.

The product is considered to be manufactured by a patented process until proven otherwise.

Article 993. Disposal of the right to a patent

Footnote: Footnote. The title of Article 993 as amended by the Law of the Republic of Kazakhstan dated 04/07/2015 No. 300-V (shall be enforced upon the expiration of ten calendar days after the day of its first official publication).

The right to obtain a patent, the rights arising from the registration of an application, the right to own a patent and the rights arising from a patent may be transferred in whole or in part to another person.

Article 994. Right of authorship

1. The author of an invention, utility model, industrial design shall have the right of authorship.

2. The right of authorship and other personal rights to an invention, utility model, industrial design arise from the moment the rights based on the title of protection arise.

3. Legislative acts may assign special rights, benefits and benefits of a social nature to the author of an invention, utility model, or industrial design.

4. The person indicated in the application as the author is considered the author until proven otherwise. Only facts and circumstances that existed before the emergence of the law can be used as evidence.

Article 995. Co-authors of an invention, utility model, industrial design

1. The relationship of the co-authors of an invention, utility model, industrial design is determined by an agreement between them.

2. Non-creative assistance in the creation of an invention, utility model, industrial design (technical, organizational or other assistance, assistance in registration of rights, etc.) does not entail co-authorship.

Article 996. Service inventions, utility models, industrial designs

The right to a patent for an invention, utility model, industrial design created by an employee in the performance of his official duties or a specific assignment of the employer (office inventions, utility models, industrial designs) belongs to the employer, unless otherwise provided in the agreement between them.

Article 997. The author’s right to remuneration for an official invention, utility model, industrial design

The amount, conditions and procedure for paying remuneration to the author for a service invention, utility model, industrial design are determined by an agreement between him and the employer. If it is impossible to balance the contribution of the author and the employer to the creation of a service invention, utility model or industrial design, the amount, conditions and procedure for paying remuneration to the author are determined by the legislative acts of the Republic of Kazakhstan.

Article 998. Validity of a patent on the territory of the Republic of Kazakhstan

Footnote: Footnote. The title of Article 998 as amended by the Law of the Republic of Kazakhstan dated 04/07/2015 No. 300-V (shall be enforced upon the expiration of ten calendar days after the day of its first official publication).

1. Patents for inventions, utility models and industrial designs issued by an expert organization are valid on the territory of the Republic of Kazakhstan.

2. Patents issued in a foreign state or an international organization are valid on the territory of the Republic of Kazakhstan in cases provided for by international treaties of the Republic of Kazakhstan.

3. Foreigners and foreign legal entities or their legal successors have the right to receive a patent in the Republic of Kazakhstan for an invention, utility model and industrial design, if the solution declared in the prescribed manner meets the requirements imposed by the legislative acts of the Republic of Kazakhstan, respectively, for inventions, utility models or industrial designs.

Article 999. Validity period of a patent

1. The patent is valid from the date of filing the application with the expert organization and remains valid subject to compliance with the requirements established by the laws of the Republic of Kazakhstan:

1. patent for an invention – for twenty years.

In relation to an invention related to a medicinal product, a pesticide, the use of which requires obtaining permits in the manner established by the legislation of the Republic of Kazakhstan on permits and notifications, the validity period of the exclusive right and the patent certifying this right may be extended at the request of the patent holder, but not more than for five years.

The specified period is extended by the time elapsed from the date of filing an application for a patent for an invention until the day of receiving the first permission to use the invention, minus five years;

2) utility model patent – ​​for five years. The validity period of a patent may be extended by an expert organization at the request of the patent holder, but for no more than three years;

3) patent for an industrial design – for ten years. The validity period of a patent can be extended each time by an expert organization at the request of the patent holder for five years. In this case, the total validity period of the patent should not exceed twenty-five years from the date of filing the application.

2. Protection of an invention, utility model, industrial design is valid from the date of filing the application with the expert organization. Protection of rights can be carried out after the grant of a patent. In case of refusal to issue a patent, protection is considered not to have occurred.

3. The priority of an invention, utility model, industrial design is determined in the manner prescribed by the laws of the Republic of Kazakhstan.

4. Upon expiration of the validity period, as well as in the event of early termination of the exclusive right, the invention, utility model or industrial design shall pass into the public domain.

5. An invention, utility model or industrial design that has passed into the public domain can be freely used by any person without anyone’s consent or permission and without payment of remuneration for use.

Article 1000. Transfer of the exclusive right to an invention, utility model, industrial design

An agreement on the transfer of the exclusive right to an invention, utility model, or industrial design is concluded in writing. The transfer of an exclusive right is subject to registration in the manner determined by the authorized state body.

Failure to comply with the written form and (or) registration requirements entails the nullity of the agreement.

Cancellation of registration is carried out in accordance with the Law of the Republic of Kazakhstan "Patent Law of the Republic of Kazakhstan".

Article 1001. Granting the right to use an invention, utility model, industrial design

Footnote: Footnote. The title of Article 1001 as amended by the Law of the Republic of Kazakhstan dated June 20, 2018 No. 161-VI (shall be enforced upon the expiration of ten calendar days after the day of its first official publication).

1. License and sublicense agreements for the use of an invention, utility model, industrial design are concluded in writing. Granting the right to use an invention, utility model, or industrial design is subject to registration in the manner determined by the authorized state body.

Failure to comply with the written form and (or) registration requirements entails the nullity of the agreement.

Cancellation of registration is carried out in accordance with the Law of the Republic of Kazakhstan "Patent Law of the Republic of Kazakhstan".

2. The content of the license agreement must comply with the requirements set out in Article 966 of this Code.

Article 1002. Open license

1. The patent holder may submit an application to an expert organization to grant any person the right to obtain a license to use an invention, utility model, or industrial design (open license).

2. A person who has expressed a desire to use an open license must enter into a payment agreement with the patent holder. Disputes about the terms of such an agreement are resolved by court.

The patent owner's application for granting the right to an open license cannot be revoked.

Article 1003. Liability for patent infringement

Footnote: Footnote. The title of Article 1003 as amended by the Law of the Republic of Kazakhstan dated 04/07/2015 No. 300-V (shall be enforced upon the expiration of ten calendar days after the day of its first official publication).

At the request of the patent holder, the violation of the patent must be stopped, and the infringer is obliged to compensate the patent holder for the losses incurred by him (Article 9 of this Code). Instead of losses incurred, the patent holder has the right to recover from the infringer the income received by him as a result of the unlawful use of an invention, utility model, or industrial design.

Article 1004. Right of prior use

1. Any person who, before the priority date of an invention, utility model, industrial design, conscientiously used an identical solution created independently of the author on the territory of the Republic of Kazakhstan or made the necessary preparations for this, retains the right to its further free use without expanding the scope of use.

2. A person who in good faith began to use an invention, utility model, industrial design after the priority date, but before the date of official publication of information about the grant of a patent for an invention, utility model, industrial design, is obliged, at the request of the patent holder, to stop further use. However, such a person is not obliged to compensate the patent owner for losses incurred by him as a result of such use.

Article 1005. Restriction of the rights of the patent holder

The grounds for restricting the rights of the patent holder, the conditions for terminating (cancelling) a patent, declaring it invalid, terminating its validity, issuing compulsory licenses and compulsory alienation of patents are established by legislative acts.

Chapter 53. Rights to selection achievements

Article 1006. Conditions for the protection of rights to new varieties of plants and new breeds of animals

1. Rights to new varieties of plants and new breeds of animals (breeding achievements) are protected subject to the issuance of a patent. A patent certifies the exclusive right of the patent holder to use a selection achievement, its priority and the authorship of the breeder.

A selection achievement in plant growing is a plant variety obtained artificially or through selection and having one or more economic characteristics that distinguish it from existing plant varieties.

A breed is recognized as a selection achievement in animal husbandry, that is, an integral large group of animals of common origin, created by man and having a genealogical structure and properties that make it possible to distinguish it from other breeds of animals of the same species and are quantitatively sufficient for reproduction as one breed.

2. The conditions for legal protection of selection achievements, the procedure for registration and issuance of a patent for plant varieties and animal breeds are established by legislative acts.

3. The rules of Articles 992-998, 1000-1004 of this Code are respectively applied to relations related to the rights to selection achievements and the protection of these rights, unless otherwise provided by the rules of this chapter and legislative acts on the protection of selection achievements.

Article 1007. The right of the author to determine the name of the selection achievement

1. The author of a selection achievement has the right to determine its name, which must meet the requirements established by law.

2. In the production, reproduction, offer for sale, sale and other types of marketing of protected breeding achievements, the use of names registered for them is mandatory. Assigning a name different from the registered one to produced and/or sold seeds or breeding material is not permitted.

3. Assigning the name of a registered selection achievement to unrelated produced and (or) sold seeds and breeding material is a violation of the rights of the patent holder and breeder.

Article 1008. Rights of the author of a selection achievement to remuneration

1. The author of a selection achievement, who is not the patent holder, has the right to receive remuneration from the patent holder for the use of the selection achievement during the validity period of the patent.

2. The amount and terms of payment of remuneration to the author of a selection achievement are determined by an agreement concluded between him and the patent holder. In this case, the amount of remuneration should not be less than five percent of the annual revenues received by the patent holder for the use of a selection achievement, including revenues from the sale of a license.

The remuneration is paid to the author within six months after the expiration of each year in which the selection achievement was used, unless otherwise provided by the agreement between the author and the patent holder.

Article 1009. Rights of the holder of a patent for a selection achievement

The owner of a patent for a selection achievement has the exclusive right to use this achievement within the limits established by legislative acts on the protection of selection achievements.

Article 1010. Obligations of the patent owner

The owner of a patent for a selection achievement is obliged to:

1. introduce into circulation a variety or breed approved for use in production;

2) maintain the corresponding plant variety or corresponding animal breed during the validity period of the patent in such a way that the characteristics specified in the official description of the variety or breed established by the expert body are preserved.

Article 1011. Validity period of a patent for a selection achievement

The validity of a patent for a selection achievement begins from the date of filing the application with the expert organization and continues for twenty-five years.

The Law of the Republic of Kazakhstan “On the Protection of Selection Achievements” may establish longer patent validity periods for certain types of selection achievements, as well as the possibility of their extension.

Article 1012. Admission of selection achievements for use

Selection achievements that are granted legal protection (there is a patent) in accordance with the laws of the Republic of Kazakhstan are allowed for use.

Chapter 54. Rights to topologies of integrated circuits

Article 1013. Conditions for the protection of rights to topologies of integrated circuits

1. The legal protection provided for by this chapter and other legislative acts applies only to original topologies of integrated circuits.

The original topology of an integrated circuit is recognized as the spatial-geometric arrangement of the totality of elements of an integrated circuit and the connections between them, created as a result of the creative activity of the author, recorded on a material medium.

2. The legal protection provided by the articles of this section does not apply to ideas, methods, systems, technology or encoded information that can be embodied in the topology.

3. The rules of Articles 994-997 of this Code apply to relations related to the right to topologies of integrated circuits and the protection of these rights.

Article 1014. Exclusive right to topologies of integrated circuits

1. The author or other copyright holder of an integrated circuit topology has the exclusive right to use this topology at his own discretion, in particular, by manufacturing an integrated circuit with such a topology, including the right to prohibit the use of such a topology by other persons without appropriate permission.

2. The procedure for using rights belonging to several authors of a topology or other right holders is determined by an agreement between them.

3. A violation of an exclusive right is the commission of the following actions without the permission of the author:

1. copying the topology as a whole or part of it by inclusion in an integrated circuit or otherwise, with the exception of that part that is not original;

2) use, import, offer for sale, sale and other introduction into circulation of a topology or an integrated circuit with this topology.

4. Legislative acts establish a list of actions that are not a violation of the exclusive rights of the owner of the rights to the topology.

Article 1015. Registration of topologies

1. The author of the topology of an integrated circuit or other copyright holder has the right to register the topology by submitting an application for registration to an expert organization.

2. An application for registration can be submitted within a period not exceeding two years from the date of the first use of the topology, if any.

3. The procedure for registering topologies, as well as agreements on the full or partial assignment of rights to them, is established by legislative acts.

Article 1016. Validity period of the exclusive right to use the topology

1. The exclusive right to use the topology is valid for ten years, starting from the date of registration of the topology.

If the topology has not been registered, the specified ten-year period is calculated from the documented date of the first use in any country of the world of this topology or an integrated circuit with this topology.

2. The appearance of an identical original topology independently created by another author does not interrupt or terminate the period of exclusive rights specified in paragraph 1 of this article.

Chapter 55. The right to protection of undisclosed information from illegal use

Article 1017. Conditions for legal protection of undisclosed information

1. A person who lawfully possesses technical, organizational or commercial information, including production secrets (know-how), unknown to third parties (undisclosed information), has the right to have this information protected from illegal use if the conditions established by paragraph 1 of Article 126 of this Code are met.

2. The right to protect undisclosed information from illegal use arises regardless of the completion of any formalities in relation to this information (its registration, receipt of certificates, etc.).

3. The rules on the protection of undisclosed information do not apply to information that, in accordance with legislative acts, cannot constitute an official or commercial secret (information about legal entities, rights to property and transactions with it; information to be presented in statistical form, etc.).

4. The right to protect undisclosed information is valid as long as the conditions provided for in paragraph 1 of Article 126 of this Code remain.

Article 1018. Liability for illegal use of undisclosed information

1. A person who, without legal grounds, has received or disseminated undisclosed information or uses it, is obliged to compensate the person who lawfully possesses this information for losses caused by its illegal use.

2. If a person illegally using undisclosed information received it from a person who did not have the right to distribute it, about which the acquirer of the information did not know and should not have known (a bona fide acquirer), the lawful owner of the undisclosed information has the right to demand from him compensation for losses caused by the use of undisclosed information after the bona fide acquirer learned that its use is illegal.

3. A person who lawfully possesses undisclosed information has the right to demand that the person who illegally uses it immediately stop using it. However, the court, taking into account the funds spent by the bona fide purchaser of undisclosed information on its use, may allow its further use under the terms of a paid exclusive license.

4. A person who independently and lawfully received information constituting the content of undisclosed information has the right to use this information, regardless of the rights of the owner of the corresponding undisclosed information, and is not responsible to him for such use.

Article 1019. Transfer of the right to protect undisclosed information from illegal use

1. A person who has undisclosed information may transfer all or part of the information constituting the content of this information to another person under a license agreement (Article 966 of this Code).

2. The licensee is obliged to take appropriate measures to protect the confidentiality of information received under the contract, and has the same rights to protect it from illegal use by third parties as the licensor. Unless otherwise provided in the agreement, the obligation to maintain the confidentiality of information lies with the licensee even after termination of the license agreement, if the relevant information continues to remain undisclosed information.

Chapter 56. Means of individualization of participants in civil transactions, goods and services

Paragraph 1. Company name

Article 1020. Right to a company name

1. A legal entity has the exclusive right to use a company name (Article 38 of this Code) in official forms, printed publications, advertising, signs, prospectuses, invoices, on Internet resources, on goods and their packaging and in other cases necessary for the individualization of a legal entity.

2. The corporate name of a legal entity is determined upon approval of its charter. Under a certain business name, a legal entity is included in the National Register of Business Identification Numbers.

3. A company name cannot be used that is so similar to the company name of an already registered legal entity that it could lead to identification of the relevant legal entities, as well as misleading information regarding the goods they produce or services they provide.

4. If the trade name of one legal entity turns out to be identical or confusingly similar to a trademark (service mark) of another individual or legal entity and, as a result of such identity or similarity, may mislead consumers, then the means of individualization (trade name, trademark, service mark), the exclusive right to which arose earlier, will have priority. The owner of such a means of individualization, in the manner established by the legislation of the Republic of Kazakhstan, has the right to demand invalidation of the legal protection granted to a trademark (service mark) for homogeneous goods or services, or a ban on the use of the company name.

Article 1021. Use of the corporate name of a legal entity in a trademark

The corporate name of a legal entity can be used in a trademark owned by it.

Article 1022. Validity of the right to a company name

1. On the territory of the Republic of Kazakhstan there is an exclusive right to a company name registered in the Republic of Kazakhstan as a designation of a legal entity.

An exclusive right to a company name registered or generally recognized in a foreign state on the territory of the Republic of Kazakhstan is valid in cases provided for by legislative acts.

2. The right to a company name shall terminate with the liquidation of the legal entity and with a change in its company name.

Article 1023. Alienation of the right to a company name

1. Alienation and transfer of the right to the corporate name of a legal entity are not allowed, except in cases of reorganization of the legal entity and alienation of the enterprise as a whole.

2. The owner of the right to a company name may permit (issue a license) to another person to use his name in the ways stipulated in the agreement. At the same time, the license agreement must provide for measures to prevent misleading the consumer.

Paragraph 2. Trademark

Article 1024. Conditions for legal protection of a trademark

1. Legal protection of a trademark is provided on the basis of its registration, or without registration on the basis of international treaties to which the Republic of Kazakhstan is a party.

A trademark (service mark) is a verbal, figurative, dimensional or other designation registered or protected without registration by virtue of an international treaty that serves to distinguish the goods or services of one person from similar goods and services of other persons.

If a trademark (service mark) of one individual or legal entity turns out to be identical or confusingly similar to the trade name of another legal entity and, as a result of such identity or similarity, may mislead consumers, then the provisions provided for in paragraph 4 of Article 1020 of this Code are applied.

2. Designations the registration of which is not permitted as a trademark, the procedure for registering trademarks, terminating their validity and declaring the registration invalid, as well as cases in which legal protection of unregistered trademarks may be allowed, are determined by legislative acts on trademarks.

3. The right to a trademark is certified by a certificate.

Article 1025. Right to use a trademark

1. The owner of the right to a trademark has the exclusive right to use and dispose of the mark belonging to him.

The rights of owners to use a trademark may not be limited by requirements that may harm the distinctiveness of the trademark.

2. The use of a trademark is considered to be any introduction into circulation: production, use, import, storage, offering for sale, sale of a trademark or a product designated by this sign, use in signs, advertising, printed materials or other business documentation.

3. Features of advertising of trademarks and goods designated by trademarks are determined by the laws of the Republic of Kazakhstan.

Article 1026. Legal protection of a trademark on the territory of the Republic of Kazakhstan

On the territory of the Republic of Kazakhstan, legal protection is provided to a trademark registered by an expert organization or an international organization by virtue of an international treaty ratified by the Republic of Kazakhstan.

Article 1027. Duration of validity of the right to a trademark

1. The priority of a trademark is established in accordance with the Law of the Republic of Kazakhstan “On Trademarks, Service Marks, Geographical Indications and Appellations of Origin of Goods” or by virtue of an international treaty ratified by the Republic of Kazakhstan.

2. The right to a trademark is valid for ten years from the date of registration of the application.

At the request of the holder of the right to a trademark, submitted to an expert organization during the last year of validity of the trademark, an extension of the validity of the trademark for ten years can be registered. Renewal can be made an unlimited number of times.

Article 1028. Consequences of non-use of a trademark

If a trademark is not used without good reason continuously for three years, its registration may be canceled at the request of any interested party.

The conclusion of a license agreement for the use of a trademark is considered to be its use.

Article 1029. Transfer of the right to a trademark

1. The right to a trademark in relation to all goods and services or part thereof may be transferred by the right holder to another person under an agreement.

2. Transfer of the right to a trademark is not permitted if it may cause misrepresentation regarding the product or its manufacturer.

3. The transfer of the right to a trademark, including its transfer under an agreement or by succession, must be registered with an expert organization.

Article 1030. Permission to use a trademark

1. The right to use a trademark may be granted by the owner of the right to a trademark to another person in relation to registered goods and services or their part under a license agreement (Article 966 of this Code).

2. A license agreement allowing the licensee to use a trademark must contain a condition that the quality of the licensee’s goods or services will not be lower than the quality of the licensor’s goods or services and that the licensor has the right to monitor the implementation of this condition.

3. Upon termination of the right to a trademark, the license agreement is terminated.

4. The transfer of the right to a trademark to another person does not entail the termination of the license agreement.

Article 1031. Transfer of the right to a trademark and granting the right to use a trademark

The agreement on the transfer of rights to a trademark, license, sublicense agreements are concluded in writing. The transfer of the right to a trademark or the grant of the right to use a trademark is subject to registration in the manner determined by the authorized state body.

Failure to comply with the written form of the agreement and (or) the registration requirement entails the nullity of the agreement.

Cancellation of registration is carried out in accordance with the Law of the Republic of Kazakhstan “On Trademarks, Service Marks, Geographical Indications and Appellations of Origin of Goods”.

Article 1032. Liability for violation of the right to a trademark

1. A person who has violated the right of the owner of a trademark is obliged to immediately stop the violation and compensate the owner of the trademark for the losses incurred by him.

2. Disputes related to determining the legality of using a trademark or a designation confusingly similar to it, or a well-known trademark, are considered by the court in the manner established by the civil procedural legislation of the Republic of Kazakhstan.

3. A product and its packaging on which a trademark or a designation confusingly similar to it is placed without the consent of the copyright holder are considered counterfeit. Counterfeit goods and their packaging, as well as tools, equipment or other means and materials used for their production, are subject to withdrawal from circulation and destruction at the expense of the offender on the basis of a court decision that has entered into legal force, except for cases where the introduction of such goods into circulation is necessary in the public interest and does not violate the requirements of the legislation of the Republic of Kazakhstan on the protection of consumer rights.

4. The copyright holder has the right to demand the removal from counterfeit goods and their packaging of an illegally placed trademark or a designation confusingly similar to it in the cases specified in paragraph 3 of this article.

5. A person who has violated the right of the owner of a trademark when performing work or providing services is obliged to remove the trademark or a designation that is confusingly similar to it from the materials that accompany the performance of work or provision of services, including documentation, advertising, and signs.

6. If the fact of an offense is proven, the copyright holder has the right, instead of compensation for damages, to demand from the violator payment of compensation in the amount determined by the court, based on the nature of the violation, the market value of similar (original) goods on which the trademark or a designation confusingly similar to it is placed with the consent of the copyright holder.

Paragraph 3. Geographical indication and appellation of origin of the goods

Footnote: Footnote. Paragraph 3 - as amended by the Law of the Republic of Kazakhstan dated June 20, 2022 No. 128-VII (shall be brought into force upon the expiration of sixty calendar days after the day of its first official publication).

Article 1033. Conditions for legal protection of geographical indication and appellation of origin of goods

1. Legal protection of geographical indications and appellations of origin of goods is provided on the basis of their registration in the manner established by the Law of the Republic of Kazakhstan “On Trademarks, Service Marks, Geographical Indications and Appellations of Origin of Goods”, as well as by virtue of international treaties of the Republic of Kazakhstan.

2. A geographical indication is a designation identifying a product originating from the territory of a geographical feature, a certain quality, reputation or other characteristics of which are significantly related to its geographical origin. At least one of the stages of production of a product must take place on the territory of a given geographical object, which has a significant impact on the formation of its characteristics.

3. An appellation of origin of a product is a designation that represents or contains a modern or historical, official or unofficial, full or abbreviated name of a country, locality, locality or other geographical entity, including such a name or a derivative of such a name and which has become known as a result of its use in relation to a product, the special properties of which are solely or mainly determined by the natural conditions and (or) human factors characteristic of a given geographical entity. On the territory of a given geographical object, all stages of product production must take place, which have a significant impact on the formation of the special properties of the product.

4. The boundaries of the geographical object of production of the goods, as well as the special properties of the goods, for the designation of which the geographical indication and the name of the place of origin of the goods are used, must comply with the requirements established by the legislation of the Republic of Kazakhstan. Monitoring compliance with these requirements is carried out in accordance with the laws of the Republic of Kazakhstan.

5. A designation, although it represents or contains the name of a geographical object, but has come into general use in the Republic of Kazakhstan as a designation of a product of a certain type, not related to the place of its production, is not recognized as a geographical indication and appellation of origin of a product and is not subject to registration for the purposes of its legal protection in accordance with the rules of this paragraph. This circumstance does not deprive a person whose rights are violated by the unfair use of such a name from the opportunity to protect them in other ways provided for by the laws of the Republic of Kazakhstan, including on the basis of the rules on unfair competition.

6. Designations that cannot be granted legal protection as a geographical indication and appellation of origin of goods are determined by the laws of the Republic of Kazakhstan.

Article 1034. The right to use a geographical indication and appellation of origin of goods

1. A person who has the right to use a geographical indication and the name of the place of origin of a product has the right to place this indication and name on the product, packaging, advertising, prospectuses, invoices and use them in other ways in connection with the introduction of this product into civil circulation.

2. Geographical indication and appellation of origin of a product may be registered by several persons, both jointly and independently of each other, to designate a product that meets the requirements specified in paragraphs 2 and 3 of Article 1033 of this Code. The right to use a geographical indication and appellation of origin of a product belongs to each of such persons.

3. A person who in good faith used a geographical indication that is identical or similar to a registered geographical indication and appellation of origin of a product, no less than six months before the date of its first registration, retains the right to its further use for seven years from the date of registration of the said geographical indication and appellation of origin of a product.

4. Alienation, other transactions on the assignment of the right to use a geographical indication and appellation of origin of a product, or the provision of use of them on the basis of a license are not allowed.

Article 1035. Scope of legal protection of geographical indication and appellation of origin of goods

1. In the Republic of Kazakhstan, legal protection is provided to geographical indications and appellations of origin of goods located on the territory of the republic.

2. Legal protection of geographical indications and appellations of origin of goods located in another state is provided in the Republic of Kazakhstan if they are registered in the country of origin of the goods, as well as in the Republic of Kazakhstan, in the manner prescribed by law.

Article 1036. Validity period of the right to use a geographical indication and appellation of origin of goods

The right to use a geographical indication and appellation of origin of a product is valid for ten years, counting from the date of filing the application with the expert organization.

The validity period of the right to use a geographical indication and appellation of origin of a product may be extended at the request of its owner, submitted during the last year of validity, for ten years while maintaining the conditions giving the right to use the geographical indication and appellation of origin of a product. Renewal is possible an unlimited number of times.

Article 1037. Liability for actions related to the unlawful use of a geographical indication and appellation of origin of goods

1. A person who has violated the right to use a geographical indication and appellation of origin of goods is obliged to immediately stop the violation and compensate the owner of the right to use the geographical indication and appellation of origin of goods for losses incurred by him.

2. Disputes related to determining the legality of using a geographical indication and appellation of origin of goods or designations confusingly similar to them are considered by the court in the manner established by the civil procedural legislation of the Republic of Kazakhstan.

3. The product and its packaging, advertising, brochures, invoices on which the geographical indication and the name of the place of origin of the product or designations confusingly similar to them are placed without the consent of the copyright holder are recognized as counterfeit. Counterfeit goods and their packaging, as well as tools, equipment or other means and materials used for their production, are subject to withdrawal from circulation and destruction at the expense of the offender on the basis of a court decision that has entered into legal force, except for cases where the introduction of such goods into circulation is necessary in the public interest and does not violate the requirements of the legislation of the Republic of Kazakhstan on the protection of consumer rights.

4. The copyright holder has the right to demand the removal from counterfeit goods and their packaging of illegally placed geographical indications and appellations of origin of the goods or designations confusingly similar to them, in the cases specified in paragraph 3 of this article.

5. A person who has violated the right to use a geographical indication and appellation of origin of goods when performing work or providing services is obliged to remove the geographical indication and appellation of origin of goods or designations confusingly similar to them from materials that accompany the performance of work or provision of services, including documentation, advertising, and signs.

6. If the fact of an offense is proven, the copyright holder has the right, instead of compensation for damages, to demand from the violator payment of compensation in the amount determined by the court, based on the nature of the violation, the market value of similar (original) goods on which the geographical indication and the name of the place of origin of the goods or designations confusingly similar to them are placed with the consent of the copyright holder.

7. Violation by the right holder of the requirements of the legislation of the Republic of Kazakhstan in relation to the boundaries of the geographical object of production of the goods and the special properties of the goods, for the designation of which the geographical indication and name of the place of origin of the goods are used, as well as the provision of knowingly false information about them by officials of local executive bodies and authorized bodies in cases provided for by the Law of the Republic of Kazakhstan “On Trademarks, Service Marks, Geographical Indications and Names of Places of Origin of Goods” entails liability provided for by the laws of the Republic of Kazakhstan.

Section 6. Inheritance law

Chapter 57. General provisions on inheritance

Article 1038. Inheritance

1. Inheritance is the transfer of the property of a deceased citizen (testator) to another person (persons) - the heir (heirs).

2. The inheritance of a deceased citizen passes to other persons on the terms of universal succession as a single whole and at the same moment, unless otherwise follows from the rules of this section.

3. Inheritance is regulated by this Code, and in cases directly established by it, by other legislative acts.

Article 1039. Grounds for inheritance

1. Inheritance is carried out by will and (or) by law.

2. Inheritance by law takes place when there is no will or does not determine the fate of the entire inheritance, as well as in other cases established by this Code.

Article 1040. Composition of inheritance

1. The inheritance includes the property belonging to the testator, as well as rights and obligations, the existence of which does not cease with his death.

The inheritance may also include the rights necessary to formalize the property rights of the testator that were not formalized during his lifetime, including the right to register them.

2. The following rights and obligations that are inextricably linked with the personality of the testator are not included in the inheritance:

1. the right of membership in organizations that are legal entities, unless otherwise established by legislative acts or agreement;

2) the right to compensation for harm caused to life or health;

3) rights and obligations arising from alimony obligations;

4) rights to pension payments, benefits and other payments on the basis of the labor legislation of the Republic of Kazakhstan and the legislation of the Republic of Kazakhstan on social protection;

5) personal non-property rights not related to property rights, except for cases established by legislative acts.

3. Personal non-property rights and other intangible benefits that belonged to the testator may be exercised and protected by the heirs.

Article 1041. Inheritance of property that is common joint property

1. The death of a participant in common joint property is the basis for determining his share in the property and dividing the common property or separating from it the share of the deceased participant in the manner established by Article 218 of this Code. In this case, the inheritance is opened for the share of the deceased participant in the common property, and if it is impossible to divide the property in kind, for the value of the share.

2. A participant in common joint property has the right to bequeath his share in the common property, which will be determined after his death in accordance with paragraph 1 of this article.

Article 1042. Opening of inheritance

1. An inheritance opens as a result of the death of a citizen or his declaration as deceased.

2. The time for opening an inheritance is the day of death of the testator, and if he is declared dead, the day the court decision to declare the citizen dead comes into force, unless a different day is specified in the court decision.

3. If persons who had the right to inherit one after the other died on the same day, they are recognized as dead at the same time and the inheritance opens after each of them, and the heirs of each of them are called to inherit.

Article 1043. Place of opening of inheritance

The place of opening of the inheritance is the last place of residence of the testator, and if it is unknown, the location of the property or its main part.

Article 1044. Heirs

1. Heirs by will and law may be citizens who are alive at the time of the opening of the inheritance, as well as those conceived during the life of the testator and born alive after the opening of the inheritance.

2. Heirs under a will may be legal entities created before the opening of the inheritance and existing at the time of the opening of the inheritance, as well as the state.

Article 1045. Elimination of unworthy heirs from inheritance

1. Persons who have deliberately taken the life of the testator or any of the possible heirs or have made an attempt on their life have no right to inherit either by will or by law. The exception is for persons in respect of whom the testator made a will after an attempt on his life had been committed.

2. Persons who deliberately prevented the testator from carrying out his last will and thereby contributed to the calling of themselves or persons close to them to inherit or to increase the share of the inheritance due to them also do not have the right to inherit either by will or by law.

3. Parents do not have the right to inherit by law after children in respect of whom they were deprived of parental rights and were not restored to these rights by the time the inheritance was opened, as well as parents (adoptive parents) and adult children (adopted children) who evaded fulfilling the duties assigned to them by force of law to support the testator.

4. The circumstances serving as the basis for eliminating unworthy heirs from inheritance are established by the court.

4-1. A person who does not have the right to inherit or is excluded from inheritance on the basis of this article (an unworthy heir) is obliged to return all property that he unjustifiably received from the inheritance.

If it is impossible to return the inherited property, the unworthy heir is obliged to compensate its market value.

5. The rules of this article also apply to testamentary refusal (Article 1057 of this Code).

In the case where the subject of the legacy was the performance of certain work for an unworthy legatee or the provision of a certain service to him, the latter is obliged to compensate the heir who executed the legacy for the cost of the work performed or the service provided to him.

6. The rules of this article apply to all heirs, including those entitled to an obligatory share.

Chapter 58. Inheritance by will

Article 1046. General provisions

1. A will is recognized as the will of a citizen to dispose of his property in the event of death.

1-1. A will is made by a citizen who has full legal capacity at the time of its making.

2. A citizen may bequeath all or part of his property to one or more persons, both included and not included in the circle of heirs by law, as well as legal entities and the state.

3. The will must be made in person. Making a will through a representative is not allowed.

4. The testator has the right, without giving reasons, to deprive one, several or all heirs of the inheritance by law. The deprivation of an heir by law of inheritance does not apply to his descendants who inherit by right of representation, unless otherwise follows from the will.

5. The testator has the right to make a will containing orders for any of his property, including those that he may acquire in the future.

The testator can determine the shares of the heirs in the inheritance in any way, dispose of his property or any part of it, by drawing up one or more wills relating to different property.

6. The testator is free to cancel and change the will at any time after its execution and is not required to indicate the reasons for the cancellation or change.

7. The testator does not have the right to impose on the persons appointed by him as heirs in the will, the obligation, in turn, to dispose of the property bequeathed to them in a certain way in the event of their death.

Article 1047. Will with condition

1. The testator has the right to condition the receipt of the inheritance on a certain condition regarding the nature of the heir’s behavior.

2. Illegal conditions included in the order on the appointment of an heir or deprivation of the right to inherit are void.

3. Conditions included in the will that are impossible for the heir to fulfill due to his state of health or due to other objective reasons may be declared invalid at the suit of the heir.

Article 1048. Subappointment of heirs

1. The testator may, in the event that the heir indicated in the will dies before the opening of the inheritance, does not accept it or refuses it, or is removed from inheritance as an unworthy heir in accordance with Article 1045 of this Code, as well as in the event that the heir under the will fails to fulfill the legal conditions of the testator, appoint another heir (sub-appointment of an heir).

2. A designated heir can be any person who, in accordance with Article 1044 of this Code, can be an heir.

3. Refusal of a will by an heir not in favor of the designated heir is not allowed.

Article 1049. Inheritance of part of the property that remains untested

1. The part of the property that remains untested is distributed among the heirs by law, called for inheritance in accordance with Articles 1061-1064 of this Code.

2. The number of these heirs also includes those heirs by law to whom another part of the property was left by will.

Article 1050. General rules on the form of a will

1. The will must be made in writing and notarized, indicating the place, date and time of its preparation.

2. The following are considered duly executed:

1. notarized wills;

2) wills equivalent to notarized wills.

3. The will must be signed by the testator himself.

If the testator, due to physical disabilities, illness or illiteracy, cannot sign the will with his own hand, it may, at his request, be signed in the presence of a notary or other person certifying the will, by another citizen, indicating the reasons why the testator could not sign the will with his own hand.

4. In cases where, in accordance with the rules of this Code, when drawing up, signing or certifying a will, witnesses must be present, cannot be witnesses, and also cannot sign the will instead of the testator:

1. a notary or other person certifying the will;

2) the person in whose favor a will was drawn up or a testamentary refusal was made, his spouse, his children, parents, grandchildren and great-grandchildren, as well as the heirs of the testator at law;

3) citizens who do not have full legal capacity;

4) illiterate and other persons unable to read the will;

5) persons with a criminal record for giving false testimony.

Article 1051. Notarized will

1. A notarized will must be written by the testator or recorded by a notary from the words of the testator in the presence of a witness. When recording a will from the words of the testator, a notary can use generally accepted technical means (typewriter, personal computer, etc.).

2. A will recorded by a notary from the words of the testator must be fully read by the testator in the presence of the notary and a witness before signing the will.

If the testator, due to physical disabilities, illness or illiteracy, is unable to personally read the will, its text is read out to him by a witness in the presence of a notary, about which a corresponding entry is made in the will indicating the reasons why the testator was unable to personally read the will.

3. If a notarized will is drawn up in the presence of a witness, the will must indicate the surname, first name and permanent place of residence of the witness. The same information must be included in the will in relation to the person who signed the will instead of the testator.

4. At the request of the testator, the will is certified by a notary without familiarization with its contents (secret will).

A secret will, under penalty of invalidity, must be personally written and signed by the testator, in the presence of two witnesses and a notary, sealed in an envelope on which the witnesses put their signatures. The envelope signed by the witnesses is sealed in the presence of the witnesses and the notary into another envelope, on which the notary makes an authentication signature.

4-1. When presenting a certificate or notification of the death of a person who has made a secret will, the notary, no later than ten days from the date of presentation of the certificate or notification of death, opens the envelope with the will in the presence of at least two witnesses and interested persons from among the heirs at law who wish to be present. After opening the envelope, the text of the will contained in it is immediately read out by the notary, after which the notary draws up and, together with the witnesses, signs a protocol certifying the opening of the envelope with the will and containing the full text of the will. The original will is kept by the notary. The heirs are given a notarized copy of the protocol.

5. The will of persons living in settlements where there is no notary is certified by an official authorized by legislative acts to perform notarial acts.

Article 1052. Wills equivalent to notarized wills

1. The following are equivalent to notarized wills:

1. wills of citizens undergoing treatment in hospitals, sanatoriums, and other medical institutions, certified by the chief physicians and doctors on duty of these institutions, as well as wills of the elderly and persons with disabilities living in medical and social institutions (organizations), certified by the directors and chief physicians of these institutions (organizations);

2) wills of military personnel and other persons undergoing treatment in hospitals, sanatoriums and other military medical institutions, certified by the chiefs, their deputies for medical affairs, senior and duty doctors of these hospitals, sanatoriums and other military medical institutions;

3) wills of citizens who are sailing on sea vessels or inland navigation vessels flying the flag of the Republic of Kazakhstan, certified by the captains of these vessels;

4) wills of citizens on exploration and other expeditions, certified by the heads of these expeditions;

5) wills of military personnel, and at points of deployment of military units, formations, institutions, military educational institutions, where there are no notaries and officials authorized to perform notarial acts, as well as wills of civilians working in these units, members of their families and family members of military personnel, certified by commanders (chiefs) of military units, formations, institutions and institutions;

6) wills of persons in places of deprivation of liberty, certified by the heads of places of deprivation of liberty.

2. Wills provided for in paragraph 1 of this article must be signed by the testator in the presence of a witness who also signs the will.

The officials listed in paragraph 1 of this article are required to transfer one copy of the certified will to a notary for storage in accordance with the legislation on notaries.

Otherwise, the rules of Article 1051 of this Code apply to such wills, with the exception of the requirement for notarization of the will.

Article 1053. Cancellation and modification of a will

1. The testator has the right to cancel or change the will he has made at any time.

2. A will can be revoked by:

1. submitting an application to the notary’s office to completely cancel the will previously made by him;

2) drawing up a new will.

3. A will can be changed by:

1. filing an application to the notary’s office to change a certain part of the will previously made by him;

2) drawing up a new will, amending the previously made will in part.

4. A previously made will, canceled in whole or in part by a subsequent will, is not restored if the latter is in turn canceled or changed by the testator.

Article 1054. Secrecy of a will

A notary, another person certifying the will, witnesses, as well as a citizen signing the will instead of the testator, do not have the right to disclose information regarding the contents of the will, its preparation, cancellation or modification before the opening of the inheritance.

Article 1055. Interpretation of a will

When interpreting a will by a notary, executor or court, the literal meaning of the words and expressions contained therein is taken into account. If the literal meaning of any provision of the will is unclear, it is established by comparing this provision with other provisions and the meaning of the will as a whole.

Article 1056. Invalidity of a will

1. A will made in improper form is void. The invalidity of a will is based on the rules of Chapter 4 of this Code on the invalidity of transactions.

2. A will may be declared invalid at the request of a person for whom the invalidation of a will has property consequences, due to a violation of the procedure for drawing up, signing and certifying a will established by this Code.

Misprints and other minor violations of a technical nature made during its preparation, signing or certification cannot serve as grounds for the invalidity of a will, if the court has established that they do not affect the understanding of the will of the testator.

3. The invalidity of individual instructions contained in the will does not affect the validity of the rest of the will.

4. If a will is declared invalid, the heir who was deprived of inheritance under this will receives the right to inherit by law in the manner established by Article 1060 of this Code.

Article 1057. Testamentary legacy (legacy)

1. The testator has the right to assign to the heir under the will the fulfillment at the expense of the inheritance of any obligation (testamentary refusal) in favor of one or several persons (legatees), who acquire the right to demand execution of the testamentary refusal.

Legatees (legatees) can be persons both included and not included in the number of heirs by law.

2. The subject of a testamentary refusal may be the transfer to the legatee for ownership, use or other property right of an item included in the inheritance, the acquisition and transfer to him of property that is not part of the inheritance, the performance of certain work for him, the provision of a certain service to him, etc.

3. The heir to whom the testator has entrusted a testamentary refusal must fulfill it only within the limits of the actual value of the inheritance transferred to him and minus the portion of the testator’s debts falling on him.

If the heir to whom the testamentary refusal is entrusted has the right to an obligatory share in the inheritance, his obligation to fulfill the refusal is limited to the value of the inheritance transferred to him, which exceeds the value of his obligatory share.

If a testamentary refusal is assigned to all or several heirs, it burdens each of them in proportion to the share in the inheritance, unless otherwise provided by the will.

4. The testator has the right to impose on the heir to whom a residential building or residential premises is transferred the obligation to provide another person with lifelong use of the residential premises or a certain part thereof. Upon subsequent transfer of ownership of the residential premises, the right of lifelong use remains in force.

The right of lifelong use is inalienable, non-transferable and does not pass to the heirs of the legatee.

The right of lifelong use granted to the legatee is not the basis for residence of members of his family, unless otherwise specified in the will.

5. In the event of the death of the heir to whom the testamentary refusal was entrusted, or if he does not accept the inheritance, the execution of the testamentary refusal passes to other heirs who received his share, or to the state if the property has become escheated.

A testamentary refusal is not executed in the event of the death of the legatee before the opening of the inheritance or after the opening, but before the moment when the heir under the will managed to accept it.

6. The legatee is not responsible for the debts of the testator.

Article 1058. Imposition

1. The testator may impose on the heir under the will the obligation to perform any action or refrain from it, without giving anyone the right to demand the fulfillment of this obligation as a creditor. To achieve a generally beneficial purpose, the same duty may be assigned to the executor of a will when the testator allocates part of the property for the execution of the assignment.

2. The rules of Article 1057 of this Code are applied accordingly to the assignment, the subject of which is actions of a property nature.

3. The obligation to fulfill the assignment terminates if, under the circumstances provided for by this Code, the share of the inheritance due or belonging to the heir who had the obligation to fulfill the assignment passes to other heirs.

Article 1059. Execution of a will

1. The testator may entrust the execution of a will to a person indicated in the will who is not an heir (executor of the will, executor). The consent of this person to be the executor of the will must be expressed by him either in his own handwritten inscription on the will itself, or in a statement attached to the will.

If the will does not indicate its executor, the heirs, by agreement among themselves, have the right to entrust the execution of the will to one of the heirs or another person. If such an agreement is not reached, the executor of the will may be appointed by the court at the request of one or more heirs.

The executor of a will has the right at any time to refuse to fulfill the duties assigned to him by the testator, having notified the heirs under the will in advance. The release of the executor of a will from his duties is also possible by a court decision upon the application of the heirs.

2. The executor of the will must:

1. protect and manage the inheritance;

2) take all possible measures to notify all heirs and legatees about the opening of the inheritance in their favor;

3) receive the sums of money due to the testator;

4) give the heirs the property due to them in accordance with the will of the testator and legislative acts;

5) ensure the execution by the heirs of the testamentary refusals assigned to them (Article 1057 of this Code);

6) execute testamentary contributions or demand from the heirs under a will the execution of testamentary contributions (Article 1058 of this Code);

7) clear the inheritance of debts.

3. The executor of a will has the right to enter on his own behalf into judicial and other cases related to the management of the inheritance and the execution of the will, and may also be involved in such cases.

4. The executor of the will shall perform his functions within the period reasonably necessary to clear the inheritance of debts, collect the amounts due to the testator and for all heirs to take possession of the inheritance.

5. The executor of a will has the right to compensation from the inheritance for the necessary expenses for managing the inheritance and executing the will. The will may provide for the payment of remuneration to the executor of the will from the inheritance.

6. Upon execution of a will, the executor of the will is obliged to provide the heirs with a report upon their request.

Chapter 59. Inheritance by law

Article 1060. General provisions

1. Heirs by law are called upon to inherit in the order of priority provided for in Articles 1061-1064 of this Code.

2. When inheriting by law, the adopted person and his offspring, on the one hand, and the adoptive parent and his relatives, on the other, are equated to blood relatives.

Adopted children and their offspring do not inherit by law after the death of the adoptee's blood parents or his other blood relatives.

The parents of the adopted child and his other blood relatives do not inherit by law after the death of the adopted child and his offspring.

3. Each subsequent line of heirs by law receives the right to inherit in the event of the absence of heirs of the previous line, their removal from the inheritance, their failure to accept the inheritance or refusal of it, except for the cases specified in paragraph 5 of Article 1074 of this Code.

4. The rules of this Code on the order of calling heirs by law to inheritance and on the size of their shares in the inheritance can be changed by a notarized agreement of the interested heirs, concluded after the opening of the inheritance. Such an agreement should not affect the rights of heirs not participating in it, as well as heirs entitled to an obligatory share.

Article 1061. First priority of legal heirs

1. First of all, the right to inherit according to the law is received in equal shares by the children of the testator, including those born alive after his death, as well as by the spouse and parents of the testator.

2. The grandchildren of the testator and their descendants inherit by right of representation.

Article 1062. Second priority of legal heirs

1. If there are no heirs of the first priority, the right to inherit by law in the second priority is received in equal shares by the full and half-siblings of the testator, as well as his grandparents on both the father’s and mother’s sides.

2. Children of full and half brothers and sisters of the testator (nephews and nieces of the testator) inherit by right of representation.

Article 1063. Third order of heirs by law

1. If there are no heirs of the first and second priority, the right to inherit according to the law in the third order is received in equal shares by the testator's uncles and aunts.

2. Cousins ​​of the testator inherit by right of representation.

Article 1064. Heirs of subsequent orders

1. If there are no heirs of the first, second and third orders, the right to inherit according to the law is given to the relatives of the testator of the third, fourth and fifth degrees of kinship, not related to the heirs of the previous orders.

The degree of kinship is determined by the number of births separating one relative from another. The birth of the testator himself is not included in this number.

2. In accordance with paragraph 1 of this article, the following are called for inheritance:

as fourth-degree heirs, relatives of the third degree - the testator's great-grandfathers and great-grandmothers;

as fifth-degree heirs, relatives of the fourth degree - children of the testator's nephews and nieces (cousins ​​and granddaughters) and siblings of his grandparents (great-grandparents);

as sixth-degree heirs, relatives of the fifth degree of kinship are the children of the testator’s cousins ​​and granddaughters (great-great-grandsons and great-granddaughters), the children of his cousins ​​(great-nephews and nieces) and the children of his great-uncles and grandmothers (great-uncles and aunts).

3. If there are no heirs of previous orders, step-brothers and sisters, stepsons, stepdaughters, stepfather and stepmother of the testator are called upon to inherit as heirs of the seventh order by law, if they have lived together with the testator in the same family for at least ten years.

Article 1065. Fifth order of heirs by law

Footnote: (The article is excluded by the Law of the Republic of Kazakhstan dated January 12, 2007 No. 225 (shall be enforced from the date of its official publication).

Article 1066. Sixth order of heirs by law

Footnote: (The article is excluded by the Law of the Republic of Kazakhstan dated January 12, 2007 No. 225 (shall be enforced from the date of its official publication).

Article 1067. Inheritance by right of representation

1. The share of an heir by law who died before the opening of the inheritance or at the same time as the testator, passes by right of representation to his respective descendants in the cases provided for in paragraph 2 of Article 1061, paragraph 2 of Article 1062 and paragraph 2 of Article 1063 of this Code, and is divided equally between them.

2. The descendants of an heir who died before the opening of the inheritance or at the same time as the testator and who would not have the right to inherit in accordance with Article 1045 of this Code shall not inherit by right of representation.

Article 1068. Disabled dependents of the testator

1. Citizens who are classified as heirs according to the law specified in Articles 1062, 1063, 1064 of this Code, who are disabled on the day of opening of the inheritance, but who are not included in the circle of heirs of the line that is called for inheritance, inherit by law together and equally with the heirs of this line, if at least a year before the death of the testator they were dependent on him, regardless of whether they lived together with the testator or no.

2. Heirs by law who are not included in the circle of heirs specified in Articles 1061, 1062, 1063, 1064 of this Code, but were disabled by the day the inheritance was opened and were dependent on him for at least a year before the death of the testator and lived together with him, inherit together and on an equal basis with the heirs of the line called for inheritance.

In the absence of other heirs by law, the disabled dependents of the testator specified in paragraph 2 of this article shall inherit independently as heirs of the eighth order.

Article 1069. Right to an obligatory share in the inheritance

1. Minor or disabled children of the testator, as well as his disabled spouse and parents, shall inherit, regardless of the contents of the will, at least half of the share that would be due to each of them upon inheritance by law (mandatory share).

2. The obligatory share includes everything that the heir entitled to such a share receives from the inheritance by will and (or) by law, including the value of property consisting of ordinary household furnishings and household items, and the value of the testamentary disclaimer established in favor of such heir.

3. Any restrictions and encumbrances established in the will for an heir who has the right to an obligatory share in the inheritance are valid only in relation to that part of the inheritance passing to him that exceeds the obligatory share.

Article 1070. Rights of a spouse during inheritance

1. The right of inheritance belonging to a spouse by virtue of a will or law does not affect his other property rights related to his marriage to the testator, including the right of ownership to part of the property acquired jointly during marriage.

2. By a court decision, a spouse may be excluded from inheritance by law if it is proven that the marriage with the testator actually ended before the opening of the inheritance, and the spouses lived separately for at least five years before the opening of the inheritance.

Article 1071. Protection of inheritance and management of it during inheritance by law

1. If part of the property is inherited by will, the executor of the will, appointed by the testator, shall protect and manage the entire inheritance, including that part of the inheritance that is transferred by inheritance according to the law.

The executor of the will, appointed in accordance with Article 1059 of this Code by the heirs under the will or the court, carries out the functions of protecting the entire inheritance as a whole and managing it, unless the heirs by law require the appointment of a trustee of the inheritance to perform these functions in relation to the part of the inheritance transferred by inheritance by law.

2. The trustee of the inheritance is appointed by a notary at the place of opening of the inheritance at the request of one or more heirs by law. An heir by law who does not agree with the appointment of an inheritance manager or his choice has the right to challenge the appointment of a trustee of the inheritance in court.

3. If heirs by law are absent or unknown, local executive bodies of cities of republican significance, the capital, districts, cities of regional significance must contact a notary with a request to appoint a trustee of the inheritance. If the heirs appear by law, the trustee of the inheritance may be recalled at their request with reimbursement of necessary expenses and payment of reasonable remuneration from the inheritance.

4. The trustee of the inheritance exercises the powers provided for in Article 1059 of this Code in relation to the executor of the will, unless otherwise follows from the peculiarities of inheritance by law.

5. The trustee of the inheritance has the right to compensation from the inheritance for the necessary expenses for the protection and management of the inheritance, and, unless otherwise provided by his agreement with the heirs, also to remuneration.

Chapter 60. Acquisition of inheritance

Article 1072. Acceptance of inheritance

1. To acquire an inheritance, the heir must accept it.

2. Acceptance by an heir of a part of the inheritance means acceptance of the entire inheritance due to him.

When an heir is called to inherit simultaneously on several grounds, the heir may accept the inheritance due to him on one of these grounds, on several of them, or on all grounds.

Acceptance of inheritance under conditions or with reservations is not allowed.

3. Acceptance of an inheritance by one or more heirs does not mean acceptance of the inheritance by the remaining heirs.

4. An accepted inheritance is recognized as belonging to the heir from the date of opening of the inheritance, regardless of the time of its actual acceptance, as well as regardless of the moment of state registration of the heir’s right to the inherited property, when such a right is subject to state registration.

Article 1072-1. Ways to accept an inheritance

1. Acceptance of an inheritance is carried out by submitting, at the place of opening of the inheritance, to a notary or an official authorized in accordance with the law to issue a certificate of the right to inheritance, an application from the heir for acceptance of the inheritance or an application from the heir for the issuance of a certificate of the right to inheritance.

If the heir's application is handed over to the notary by another person or sent by mail, the heir's signature on the application must be certified by a notary, an official authorized to perform notarial acts (clause 5 of Article 1051 of this Code), or a person authorized to certify powers of attorney in accordance with clause 3 of Article 167 of this Code.

Acceptance of an inheritance through a representative is possible if the power of attorney specifically provides for the authority to accept the inheritance. A power of attorney is not required to accept an inheritance by a legal representative.

2. It is recognized, until otherwise proven, that the heir accepted the inheritance if he performed actions indicating the actual acceptance of the inheritance, in particular, if the heir:

took possession or management of inherited property;

took measures to preserve the inherited property, protect it from encroachments or claims of third parties;

made at his own expense expenses for the maintenance of the inherited property;

paid the testator's debts at his own expense or received money due to the testator from third parties.

Article 1072-2. Deadline for accepting inheritance

1. An inheritance can be accepted within six months from the date of opening of the inheritance.

If an inheritance is opened on the day of the expected death of a citizen or he is declared dead (clause 2 of Article 1042 of this Code), the inheritance can be accepted within six months from the date of death of the testator, and if he is declared dead - from the day the court decision to declare the citizen dead enters into legal force, unless a different day is specified in the court decision.

2. If the right of inheritance arises for other persons as a result of a heir’s refusal of the inheritance, non-acceptance of the inheritance by another heir, or the exclusion of an heir from inheritance on the grounds established by Article 1045 of this Code, such persons may accept the inheritance within six months from the date on which their right of inheritance arises.

Article 1072-3. Acceptance of inheritance after the established period

At the request of an heir who missed the deadline established for accepting the inheritance (Article 1072-2 of this Code), the court may restore this deadline and recognize the heir as accepting the inheritance if the heir missed this deadline for good reasons and provided that the heir who missed the deadline established for accepting the inheritance went to court within six months after the reasons for missing this deadline ceased.

When recognizing the heir as having accepted the inheritance, the court determines the shares of all heirs in the inherited property and, if necessary, measures to protect the rights of the new heir to receive his share of the inheritance. Previously issued certificates of the right to inheritance are recognized by the court as invalid.

Article 1072-4. Transfer of the right to accept inheritance (hereditary transmission)

If an heir by law or by will died after the opening of the inheritance, without having time to accept it within the period established by Article 1072-2 of this Code, the right to accept the share of the inheritance due to him passes to his heirs.

This right of the deceased heir can be exercised by his heirs on a general basis during the remainder of the period for accepting the inheritance.

If the remaining period is less than three months, it is extended to three months.

After the expiration of the period established for accepting the inheritance, the heirs of the deceased heir may be recognized by the court as having accepted the inheritance in accordance with Article 1072-3 of this Code, if the court finds valid reasons for missing this period.

The right of an heir to accept part of the inheritance as a mandatory share in accordance with Article 1069 of this Code does not pass to his heirs.

Article 1073. Issuance of a certificate of the right to inheritance

1. The notary at the place of opening of the inheritance, at the request of the heir, is obliged to issue him a certificate of the right to inheritance.

2. A certificate of the right to inheritance is issued after six months from the date of opening of the inheritance.

When inheriting both by will and by law, a certificate can be issued before the expiration of the specified period if the notary has reliable data that, apart from the persons who applied for the certificate, there are no other heirs in relation to the relevant property or the entire inheritance.

3. The issuance of a certificate of the right to inheritance is suspended if there is a conceived but unborn heir before his birth.

Article 1074. Right to refuse inheritance

1. The heir has the right to refuse the inheritance within six months from the date of opening of the inheritance. If there are good reasons, this period may be extended by the court, but not by more than two months.

2. Refusal of the inheritance is accomplished by the heir submitting an application to the notary at the place of opening of the inheritance.

Refusal of inheritance through a representative is possible if the power of attorney specifically provides for the power to refuse.

3. Refusal of inheritance cannot be subsequently canceled or taken back.

4. The heir loses the right to refuse the inheritance after the expiration of the period given to him for this. He also loses this right before the expiration of the specified period if he actually took possession of the inherited property or disposed of it, or applied for documents certifying his rights to this property.

5. When refusing an inheritance, the heir has the right to indicate that he is refusing it in favor of other persons from among the heirs by will or by law of any order, including in favor of those who are called to inherit by right of representation.

Refusal of inheritance in favor of heirs deprived of inheritance by the testator is not allowed.

6. If an heir is called to inherit both by will and by law, he has the right to refuse the inheritance due to him on one of these grounds or on both grounds.

7. The heir has the right to refuse the inheritance due to him by the right of increment (Article 1079 of this Code), regardless of the inheritance of the rest of the inheritance.

8. Except for the cases provided for in this article, refusal of part of the inheritance, refusal of inheritance with reservations or under conditions is not allowed.

Article 1075. The right to refuse to receive a testamentary refusal

1. The legatee has the right to refuse the legacy. Partial refusal, refusal with reservations, under conditions or in favor of another person are not allowed.

2. The right provided for by this article does not depend on the right of the legatee, who is also an heir, to refuse the inheritance.

3. If the legatee has exercised the right provided for by this article, the heir burdened with the legacy is released from the obligation to execute it.

Article 1076. Division of inheritance

1. Any of the legal heirs who accepted the inheritance has the right to demand division of the inheritance.

The division of the inheritance is carried out by agreement of the heirs in accordance with the shares due to them, and if an agreement is not reached - in court.

If the inheritance includes property, the rights of the testator to which are not registered and are not considered to have arisen without registration, the division of property between the heirs is carried out after registration of the rights of the testator in the manner prescribed by law.

2. The rules of this article apply to the division of inheritance between heirs under a will in cases where the entire inheritance or part of it is bequeathed to the heirs in shares without specifying specific property.

Article 1077. Rights of absent heirs

1. If among the heirs there are persons whose location is unknown, the remaining heirs, the executor of the will (administrator of the inheritance) and the notary are obliged to take reasonable measures to establish their location and call them to inherit.

2. If an absent heir called to inherit, whose location has been established, has not renounced the inheritance within the period provided for in Article 1074 of this Code, the remaining heirs are obliged to notify him of their intention to divide the inheritance.

If, within three months from the date of notification provided for in the previous part, the absent heir does not notify the remaining heirs of his desire to participate in the agreement on the division of the inheritance, the remaining heirs have the right to make a division by agreement among themselves, allocating the share due to the absent heir.

3. If within one year from the date of opening of the inheritance the location of the absent heir is not established and there is no information about his refusal of the inheritance, the remaining heirs have the right to make a division according to the rules of part two of paragraph 2 of this article.

4. If there is a conceived but not yet born heir, the division of the inheritance can be made only after the birth of such an heir.

If the conceived heir is born alive, then the remaining heirs have the right to divide the inheritance only with the allocation of the inheritance share due to him. To protect the interests of the newborn, a representative of the guardianship and trusteeship authority may be invited to participate in the division.

Article 1078. Preemptive right of individual heirs to property included in the inheritance

1. Heirs who lived together with the testator during the year before the opening of the inheritance have a priority right to inherit a home, as well as household utensils and household items.

2. The heirs who, together with the testator, had the right of common ownership of property, have a preferential right to inherit property that was in common ownership.

3. When exercising the preferential rights specified in paragraphs 1 and 2 of this article, the property interests of other heirs participating in the division must be respected. If the property forming the inheritance is not enough to provide the shares due to them, the heir exercising the priority right must provide them with appropriate monetary or property compensation.

Article 1079. Increment of inherited shares

1. If an heir refuses the inheritance or falls away due to the circumstances specified in this Code, the part of the inheritance that would be due to such an heir goes to the heirs by law called to inherit and is distributed among them in proportion to their inheritance shares.

If the testator bequeathed all the property to the heirs appointed by him, the part of the inheritance due to the renounced inheritance or the lapsed heir goes to the remaining heirs under the will and is distributed among them in proportion to their inheritance shares, unless otherwise provided by the will.

2. The rules contained in paragraph 1 of this article do not apply:

1. if an heir has been appointed to the renounced or fallen heir;

2) if the heir refuses the inheritance in favor of a certain person;

3) in cases where, during inheritance by law, the refusal or defection of the heir entails the calling of the heirs of the next line to inherit.

Article 1080. Expenses subject to payment from the inheritance

At the expense of the inheritance, before its distribution among the heirs, claims for compensation of necessary expenses caused by the dying illness of the testator, funeral expenses of the testator, expenses related to the protection, management of the inheritance, execution of the will, as well as payment of remuneration to the executor of the will or the trustee of the inheritance, are subject to satisfaction. These claims are subject to satisfaction from the value of the inheritance in preference to all other claims, including those secured by a pledge.

Article 1081. Collection of debts of the testator by creditors

The testator's creditors have the right to present their claims arising from the testator's obligations to the executor of the will (trustee of the estate) or to the heirs, who are liable as joint and several debtors within the limits of the value of the property transferred to each heir.

If the heirs who accepted the inheritance evade registration of property included in the inheritance or rights to it, the testator's creditors have the right to demand forced registration.

Article 1082. Inheritance in a peasant or farm enterprise

In the event of the death of a member of a peasant or farm enterprise, the inheritance is opened according to the general rules. The heirs have the right to receive monetary compensation commensurate with his share in the common ownership of this property.

Article 1083. Escheatable property

Footnote: Footnote. The title of Article 1083 as amended by the Law of the Republic of Kazakhstan dated 01.03.2011 No. 414-IV (shall be enforced from the date of its first official publication).

1. If there are no heirs either by will or by law, or none of the heirs has the right to inherit (Article 1045 of this Code), or all of them have refused the inheritance (Article 1074 of this Code), the inheritance is recognized as escheatable property.

2. Escheated property becomes communal property at the place where the inheritance is opened.

The organization of work on accounting, storage, evaluation, further use and sale of escheated property received as municipal property is carried out by the body authorized to manage communal property.

The procedure for accounting, storage, evaluation, further use and sale of escheated property that has come into state ownership is determined by the Government of the Republic of Kazakhstan.

3. The inheritance is recognized by the court as escheatable property on the basis of an application from local executive bodies of cities of republican significance, the capital, districts, cities of regional significance at the place of opening of the inheritance after one year from the date of opening of the inheritance. An inheritance may be recognized as escheatable property before the expiration of the specified period if the costs associated with the protection and management of the inheritance exceeded its value.

4. The protection and management of escheated property is carried out in accordance with Article 1071 of this Code.

5. The rules provided for in Articles 1080 and 1081 of this Code also apply to escheated property.

Section 7. Private international law

Chapter 61. General provisions

Article 1084. Determination of the law to be applied to civil relations complicated by a foreign element

1. The law to be applied to civil relations with the participation of foreign citizens or foreign legal entities or complicated by another foreign element is determined on the basis of this Code, other legislative acts, international treaties ratified by the Republic of Kazakhstan and recognized international customs.

2. If, in accordance with paragraph 1 of this article, it is impossible to determine the law to be applied, the law most closely related to civil legal relations complicated by a foreign element is applied.

3. The rules of this section on determining the law to be applied by the court are correspondingly applied by other bodies empowered to decide the issue of the law to be applied.

Article 1085. Qualification of legal concepts (legal qualification)

1. Qualification of legal concepts (legal qualification) by the court is based on their interpretation in accordance with the law of the country of the court, unless otherwise provided by legislative acts.

2. If legal concepts are not known to the law of the country of the forum or are known under a different name or with a different content and cannot be determined by interpretation according to the law of the country of the forum, then when qualifying legal concepts (legal qualification), the law of a foreign state may also be applied.

Article 1086. Establishment of the content of norms of foreign law

1. When applying foreign law, the court establishes the content of its norms in accordance with their official interpretation, practice of application and doctrine in the relevant foreign state.

2. In order to establish the content of the norms of foreign law, the court may apply in the prescribed manner for assistance and clarification from the Ministry of Justice of the Republic of Kazakhstan and other competent bodies and institutions of the Republic of Kazakhstan, including abroad, or involve experts.

3. Persons participating in the case have the right to present documents confirming the content of the norms of foreign law, to which they refer to substantiate their claims or objections, and otherwise assist the court in establishing the content of these norms.

4. If the content of the norms of foreign law, despite the measures taken in accordance with this article, is not established within a reasonable time, the law of the Republic of Kazakhstan shall apply.

Article 1087. Reversion and reference to the law of a third country

1. Any reference to foreign law in accordance with the rules of this section should be considered, except for the cases provided for in this article, as a reference to the substantive and not the conflict of laws of the relevant country.

2. A return reference to the law of the Republic of Kazakhstan and a reference to the law of a third country are accepted in cases of application of foreign law, in accordance with Article 1094, paragraphs 2, 3, 5 of Article 1095, Article 1097 of this Code.

Article 1088. Consequences of circumventing the law

Agreements and other actions of participants in relations regulated by this Code, aimed at subordinating the relevant relations to another law, bypassing the rules of this section on the applicable law, are void. In such case, the law applicable under this section shall apply.

Article 1089. Reciprocity

1. The court applies foreign law, regardless of whether the law of the Republic of Kazakhstan is applied to similar relations in the relevant foreign state, with the exception of cases where the application of foreign law on the basis of reciprocity is provided for by the legislative acts of the Republic of Kazakhstan.

2. If the application of foreign law depends on reciprocity, it is assumed that it exists, unless otherwise proven.

Article 1090. Clause of public order

1. Foreign law does not apply in cases where its application would contradict the fundamentals of the legal order of the Republic of Kazakhstan (public order of the Republic of Kazakhstan). In these cases, the law of the Republic of Kazakhstan applies.

2. Refusal to apply foreign law cannot be based solely on the difference between the political or economic system of the relevant foreign state and the political or economic system of the Republic of Kazakhstan.

Article 1091. Application of mandatory norms

1. The rules of this section do not affect the effect of mandatory norms of the legislation of the Republic of Kazakhstan, which, due to their indication in the norm itself or due to their special significance for ensuring the rights and legally protected interests of participants in civil transactions, regulate the relevant relations regardless of the applicable law.

2. When applying the law of any country, in accordance with the rules of this section, the court may apply mandatory norms of the law of another country that has a close connection with the relationship, if, according to the law of this other country, such norms should regulate the relevant relations regardless of the law to be applied. In doing so, the court must take into account the purpose and nature of such rules, as well as the consequences of their application.

Article 1092. Application of the law of a country with multiple legal systems

In cases where the law of a country in which several territorial or legal systems are in force is to be applied, the legal system in accordance with the law of that country is applied.

Article 1093. Retorsions

The Republic of Kazakhstan may establish reciprocal restrictions (retorsions) in relation to the rights of citizens and legal entities of those states in which there are special restrictions on the rights of citizens and legal entities of the Republic of Kazakhstan.

Chapter 62. Conflict of laws rules

Paragraph 1. Persons

Article 1094. Personal law of an individual

1. The personal law of an individual is the law of the country of which this person has citizenship. If a person has two or more nationalities, personal law is considered to be the law of the country with which the person is most closely associated.

2. The personal law of a stateless person is the law of the country in which this person permanently resides.

3. The personal law of a refugee is considered to be the law of the country that granted asylum.

Article 1095. Legal capacity and legal capacity of an individual

1. The civil legal capacity of an individual is determined by his personal law. At the same time, foreign citizens and stateless persons enjoy civil legal capacity in the Republic of Kazakhstan on an equal basis with citizens of the Republic of Kazakhstan, except for cases established by legislative acts of the Republic of Kazakhstan or international treaties ratified by the Republic of Kazakhstan.

2. The legal capacity of an individual is determined by his personal law.

3. The civil capacity of an individual in relation to transactions and obligations arising from causing harm is determined by the law of the country of the place where transactions were made or obligations arose from causing harm.

4. The ability of an individual to be an individual entrepreneur and to have associated rights and obligations is determined by the law of the country where the individual is registered as an individual entrepreneur. In the absence of a country of registration, the law of the country of the main place of individual entrepreneurial activity is applied.

5. Recognition of an individual as incapacitated or partially capable is subject to the law of the country of the court.

Article 1096. Recognizing an individual as missing and declaring him dead

Recognition of an individual as missing and

declaring him dead is subject to the law of the country of the forum.

Article 1097. Name of an individual

The rights of an individual to a name, its use and protection are determined by his personal law, unless otherwise follows from the rules provided for in paragraphs 5 and 7 of Article 15, Articles 1103 and 1120 of this Code.

Article 1098. Registration of acts of civil status of citizens of the Republic of Kazakhstan outside the Republic of Kazakhstan

Registration of acts of civil status of citizens of the Republic of Kazakhstan living outside the Republic of Kazakhstan is carried out at consular offices of the Republic of Kazakhstan. In this case, the legislative acts of the Republic of Kazakhstan are applied.

Article 1099. Recognition of documents issued by bodies of a foreign state to certify acts of civil status

Documents issued by the competent authorities of foreign states to certify acts of civil status committed outside the Republic of Kazakhstan according to the laws of the relevant states in relation to citizens of the Republic of Kazakhstan, foreign citizens and stateless persons are recognized as valid in the Republic of Kazakhstan if legalized.

Article 1100. Law of a legal entity

The law of a legal entity is the law of the country where the legal entity is established.

Article 1101. Legal capacity of a legal entity

1. The civil legal capacity of a legal entity is determined by the law of the legal entity.

2. A foreign legal entity cannot refer to restrictions on the powers of its body or representative to complete a transaction that are not known to the law of the country in which the body or representative of the foreign legal entity made the transaction.

3. The civil legal capacity of foreign organizations that are not legal entities under foreign law is determined by the law of the country where the organization is established.

To the activities of such organizations, if the law of the Republic of Kazakhstan is applicable, the rules of this Code are applied, which regulate the activities of legal entities that are commercial organizations, unless otherwise follows from the legislation of the Republic of Kazakhstan or the essence of the obligation.

Article 1102. Participation of the state in civil legal relations with a foreign element

1. To civil legal relations with a foreign element with the participation of the state, the rules of this section are applied on a general basis, unless otherwise provided by the legislative acts of the Republic of Kazakhstan.

2. In civil legal relations with a foreign element, the Republic of Kazakhstan enjoys jurisdictional immunity in relation to itself and its property from the jurisdiction of the courts of another state, including judicial immunity, immunity from securing a claim and immunity from the enforcement of a judicial act, unless otherwise established:

in an international treaty of the Republic of Kazakhstan;

in a written agreement that is not an international treaty of the Republic of Kazakhstan;

by application to the court or written notice in specific proceedings.

Paragraph 2. Personal non-property rights

Article 1103. Protection of personal non-property rights

Personal non-property rights are subject to the law of the country where the action or other circumstance that gave rise to the claim for protection of such rights took place.

Paragraph 3. Transactions, representation, limitation period

Article 1104. Form of transaction

1. The form of the transaction is subject to the law of the place where it was concluded. However, a transaction made abroad cannot be declared invalid due to non-compliance with the form, if the requirements of the law of the Republic of Kazakhstan are met.

2. A foreign economic transaction, at least one of the participants of which is a legal entity of the Republic of Kazakhstan or a citizen of the Republic of Kazakhstan, is concluded, regardless of the place where the transaction is concluded, in writing.

3. The form of the transaction in relation to real estate is subject to the law of the country where this property is located, and in relation to real estate that is included in the state register in the Republic of Kazakhstan - to the law of the Republic of Kazakhstan.

Article 1105. Power of attorney

The form and duration of the power of attorney are determined by the law of the country where the power of attorney was issued. However, a power of attorney cannot be invalidated due to non-compliance with the form if the latter satisfies the requirements of the law of the Republic of Kazakhstan.

Article 1106. Limitation period

1. The limitation period is determined by the law of the country applied to regulate the relevant relationship.

2. Claims to which the limitation period does not apply are determined by the law of the Republic of Kazakhstan if at least one of the participants in the relevant relationship is a citizen of the Republic of Kazakhstan or a legal entity of the Republic of Kazakhstan.

Paragraph 4. Property rights

Article 1107. General provisions on the law applicable to real rights

1. Ownership and other proprietary rights to real estate and movable property are determined by the law of the country where this property is located, unless otherwise provided by legislative acts of the Republic of Kazakhstan.

2. Whether property belongs to immovable or movable things, as well as other legal qualifications of property are determined by the law of the country where this property is located.

Article 1108. Origin and termination of real rights

1. The emergence and termination of real rights to property are determined by the law of the country where this property was located at the time when the action or other circumstance took place that served as the basis for the emergence or termination of real rights, unless otherwise provided by the legislative acts of the Republic of Kazakhstan.

2. The emergence and termination of real rights to property that is the subject of a transaction is determined by the law of the country to which the transaction is subject, unless otherwise established by agreement of the parties.

3. The emergence of the right of ownership of property due to acquisitive prescription is determined by the law of the country where the property was located at the end of the period of acquisitive prescription.

Article 1109. Property rights to vehicles and other property subject to inclusion in state registers

Property rights to vehicles and other property subject to state registration are determined by the law of the country where these vehicles or property are included in the state register.

Article 1110. Real rights to movable property in transit

Ownership and other real rights to movable property in transit under a transaction are determined by the law of the country from which this property was sent, unless otherwise established by agreement of the parties.

Article 1111. Protection of property rights

1. The law of the country where the property is located or the law of the country of the forum is applied to the protection of property rights and other real rights, at the choice of the applicant.

2. The law of the country in which this property is located applies to the protection of ownership and other proprietary rights to real estate. In relation to property that is included in the state register of the Republic of Kazakhstan, the law of the Republic of Kazakhstan is applied.

Paragraph 5. Contractual obligations

Article 1112. Choice of law by agreement of the parties to the contract

1. The agreement is governed by the law of the country chosen by agreement of the parties, unless otherwise provided by the legislative acts of the Republic of Kazakhstan.

2. The agreement of the parties on the choice of the law to be applied must be expressly expressed or directly follow from the terms of the contract and the circumstances of the case, considered in their entirety.

3. The parties to the contract may choose the applicable law both for the contract as a whole and for its individual parts.

4. The choice of applicable law can be made by the parties to the contract at any time, both when concluding the contract and subsequently. The parties may also agree at any time to change the law applicable to the contract.

Article 1113. Law applicable to a contract in the absence of agreement of the parties

1. In the absence of an agreement between the parties to an agreement on the law to be applied, the law of the country where the party is established, has its place of residence or has its main place of business is applied to this agreement:

1. by the seller - in the purchase and sale agreement;

2) by the donor - in the gift agreement;

3) by the lessor or lessor - in a property lease (lease) agreement;

4) by the lender - in an agreement for the gratuitous use of property;

5) by the contractor - in the contract;

6) by the carrier - in the contract of carriage;

7) by a forwarder - in a transport expedition agreement;

8) by the creditor - in a loan agreement or other credit agreement;

9) by an attorney - in the agency agreement;

10) commission agent - in the commission agreement;

11) by the custodian - in the storage agreement;

12) by the insurer - in the insurance contract;

13) by the guarantor - in the guarantee agreement;

14) by the pledgor - in the pledge agreement;

15) by the licensor - in a license agreement on the use of exclusive rights.

2. The rights and obligations under an agreement the subject of which is real estate, as well as under an agreement on trust management of property, are subject to the law of the country where this property is located, and in relation to property that is included in the state register in the Republic of Kazakhstan - the law of the Republic of Kazakhstan.

3. In the absence of agreement between the parties to the contract on the applicable law, the following shall apply, regardless of the provisions of paragraph 1 of this article:

1. for agreements on joint activities and construction contracts - the law of the country where such activities are carried out or the results provided for by the agreement are created;

2) to an agreement concluded as a result of competitive bidding (tender, auction) or on an exchange - the law of the country where the competitive bidding is held or the exchange is located.

4. For agreements not listed in paragraphs 1-3 of this article, in the absence of an agreement between the parties on the applicable law, the law of the country where the party is established, has its place of residence or has its main place of business, which carries out the performance that is decisive for the content of such an agreement, is applied. If it is not possible to determine performance that is decisive for the content of the contract, the law of the country with which the contract is most closely related shall apply.

5. With regard to the acceptance of performance under the contract, the law of the place of such acceptance is taken into account, unless otherwise agreed by the parties.

6. If the agreement uses trade terms accepted in international circulation, then in the absence of other instructions in the agreement, it is considered that the parties have agreed on the application to their relations of business customs existing in relation to the relevant trade terms.

Article 1114. Law applicable to an agreement on the creation of a legal entity with foreign participation

1. An agreement on the establishment of a legal entity with foreign participation is subject to the law of the country where the legal entity is established or established.

2. Relations regulated by this article include relations on the creation and termination of a legal entity, transfer of a participation interest in it and other relations between participants of a legal entity related to their mutual rights and obligations (including those determined by subsequent agreements).

3. The provisions of this article also apply if mutual rights and obligations of participants in a legal entity with foreign participation are established by other constituent documents.

Article 1115. Scope of applicable law

1. The law applicable to the contract by virtue of the provisions of this

paragraph covers, in particular:

1. interpretation of the contract;

2) rights and obligations of the parties;

3) execution of the contract;

4) consequences of non-fulfillment or improper fulfillment of the contract;

5) termination of the contract;

6) the grounds and consequences of the invalidity of the contract;

7) assignment of claims and transfer of debt in connection with the agreement.

2. With regard to the methods and procedure for execution, as well as measures to be taken in the event of improper execution, in addition to the applicable law, the law of the country in which the execution takes place is taken into account.

Paragraph 6. Non-contractual obligations

Article 1116. Obligations from unilateral transactions

The law of the place where the transaction was concluded applies to obligations arising from unilateral transactions (public promise of reward, activity in someone else’s interest without instructions, and others). The place of completion of a unilateral transaction is determined by the law of the Republic of Kazakhstan.

Article 1117. Obligations resulting from causing harm

1. Rights and obligations under obligations arising as a result of causing harm are determined by the law of the country where the action or other circumstance that served as the basis for the claim for compensation for harm took place.

2. Rights and obligations under obligations arising as a result of causing harm abroad, if the parties are citizens or legal entities of the same state, are determined by the law of that state.

3. Foreign law does not apply if the action or other circumstance serving as the basis for a claim for compensation for harm is not unlawful according to the legislative acts of the Republic of Kazakhstan.

Article 1118. Liability for damage caused to the consumer

The following applies to a claim for compensation for damage incurred by a consumer in connection with the purchase of a product or provision of a service:

1. the law of the country where the consumer’s place of residence is located;

2) the law of the country where the place of residence or location of the manufacturer or person providing the service is located;

3) the law of the country where the consumer purchased the product or received the service.

Article 1119. Unjust enrichment

1. The law of the country where the enrichment took place applies to obligations arising from unjust enrichment.

2. If unjust enrichment arises as a result of the disappearance of the basis on which the property was acquired or saved, the applicable law is determined by the law of the country to which this basis was subordinated.

3. The concept of unjust enrichment is defined by the law of the Republic of Kazakhstan.

Paragraph 7. Intellectual property

Article 1120. Intellectual property rights

1. Intellectual property rights are subject to the law of the country where protection of these rights is sought.

2. Contracts that have intellectual property rights as their subject matter are governed by the law determined in accordance with the provisions of this section on contractual obligations.

Paragraph 8. Inheritance law

Article 1121. Relations of inheritance

Inheritance relations are determined by the law of the country where the testator had his last permanent place of residence, since otherwise is not provided for in Articles 1122 and 1123 of this Code, unless the testator has chosen in the will the law of the country of which he is a citizen.

Article 1122. A person’s ability to draw up and revoke a will, the form of the will and the act of revoking it

The ability of a person to draw up and revoke a will, as well as the form of the will and the act of its cancellation, are determined by the law of the country where the testator had permanent residence at the time of drawing up the act, unless the testator has chosen in the will the law of the country of which he is a citizen. However, a will or its cancellation cannot be declared invalid due to non-compliance with the form if the latter satisfies the requirements of the law of the place where the act was drawn up or the requirements of the law of the Republic of Kazakhstan.

Article 1123. Inheritance of real estate and property subject to inclusion in the state register

Inheritance of real estate is determined by the law of the country where this property is located, and property that is included in the state register in the Republic of Kazakhstan is determined by the law of the Republic of Kazakhstan. The same law determines the ability of a person to draw up or revoke a will, as well as the form of the will, if the specified property is bequeathed.

Paragraph 9. Guardianship and trusteeship

Article 1124. Guardianship and trusteeship

1. Guardianship and trusteeship over minors, incapacitated or limited in legal capacity adults are established and canceled according to the personal law of the person in respect of whom guardianship and trusteeship is established or cancelled.

2. The obligation of a guardian (trustee) to accept guardianship (trusteeship) is determined by the personal law of the person appointed as a guardian (trustee).

3. Legal relations between the guardian (trustee) and the person under guardianship (trusteeship) are determined by the law of the country whose institution appointed the guardian (trustee). However, if a person under guardianship (trusteeship) resides in the Republic of Kazakhstan, the law of the Republic of Kazakhstan is applied if it is more favorable for this person.

4. Guardianship (trusteeship) established over citizens

of the Republic of Kazakhstan, living outside the Republic

Kazakhstan is recognized as valid in the Republic of Kazakhstan if there are no legal objections from the relevant consular office of the Republic of Kazakhstan against the establishment of guardianship (trusteeship) or against its recognition.

President of the Republic of Kazakhstan