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As of August 28, 2025, the Commercial Code of Ukraine (hereinafter called the Commercial Code) shall become invalid under the Law of Ukraine “On Peculiarities of Regulation of Activities of Legal Entities of Certain Organizational and Legal Forms in the Transition Period and Associations of Legal Entities” (hereinafter called the Law).

For the private sector, abolishing the Commercial Code means the elimination of the special contractual regime for business contracts, unifying contract law within the framework of the Civil Code of Ukraine (hereinafter called the Civil Code), and reducing mandatory rules regulating this area.

Additional comments of KM Partners’ experts on the consequences of the abolition of the Commercial Code of Ukraine are available in the material: “Abolition of the Commercial Code of Ukraine: consequences for certain enterprises”

The following are practical implications that need to be considered when entering and performing business contracts.

1. Reduction of mandatory rules on essential terms of the contract

With the abolition of the Commercial Code, Article 180 – defining the essential terms of the business contract – will cease to be in force. In particular, the Article has established that when concluding the business contract, the parties shall, in any case, agree subject, price, and duration of the contract.

Para. 2 of part 1 of Article 638 of the Civil Code remains in force, according to which the essential terms of the contract are terms about the subject of the contract, terms defined by law as essential or necessary for contracts of this type, as well as all those terms on which agreement must be reached at the request of at least one of the parties.

Thus, unless otherwise provided by special rules for a particular type of contract, the price and duration of the contract should not be considered as essential terms of the contract. This distinction is not merely theoretical, as the absence of an essential term allows a party to invoke the non-conclusion of the contract, which dishonest counterparties often used to avoid fulfilling their contractual obligations.

Meanwhile, in practice, the parties often require flexibility in determining price or performance terms. For example, delivery terms may depend not only on specific dates or schedules but also on certain actions of the buyer (submitting requests for new batches, making advance payments, etc.) or the occurrence of objective events. Similarly, it may be necessary to establish mechanisms for price adjustments or methods for determining prices in the future, without the need to specify all details at the time of contract signing.

Regarding supply contracts, it should also be noted that all rules of the Commercial Code on supply (Articles 264-271 of the Commercial Code) will be abolished. The relevant relations will be regulated by Article 712 of the Civil Code and general provisions on contracts of purchase and sale. In this context, it is important to note that most civil law rules are dispositive, and therefore, if the parties need to provide for regulation similar to the rules of the abolished Commercial Code, they will be able to include the necessary provisions in their contracts.

It should also be noted that part 8 of Article 268 of the Commercial Code is being abolished too. This provision essentially imposed an obligation on the buyer to dispose of goods that he refused to accept, in particular, due to non-conformity with standards or technical specifications – in cases where the goods are perishable and the supplier has not disposed of the goods within 24 hours of receipt of the refusal:

“8. Should the buyer (consignee) refuse to accept goods not being in conformity with quality standards, technical specifications (if any), samples (etalons), or terms of the contract, the shipper (manufacturer) shall dispose of the goods within ten days, while for short-life goods this term shall be 24 hours from the moment of the receipt of the buyer’s (consignee’s) notification on refusal to accept the goods. Should the shipper (manufacturer) fail to dispose of the goods within the set term, the buyer (consignee) shall have the right to sell them at the location or return them to the manufacturer. Short-life goods are to be sold at the location in any case”.

At the same time, following the abolition of the Commercial Code, it remains possible for the competent authorities to adopt standard contracts or standard terms of contracts, the content of which the parties are obliged to accept but may further elaborate. In addition, model contracts or indicative terms may be recommended – in such cases, individual terms and conditions may be amended or supplemented by mutual consent of the parties. Instead of part 4 of Article 179 of the Commercial Code, the rules about sample and standard contracts will be stipulated in part 1 of Article 630 of the Civil Code.

2. Abolition of the prohibition on limiting the liability of the product manufacturer

According to para. 3 of part 3 of Article 216 of the Commercial Code, business contracts could not include provisions that excluded or limited the liability of the manufacturer (seller) of the goods. Previously, the parties could not derogate from this mandatory obligation.

However, such conditions were often perceived as overly burdensome for contractors, who reasonably expected not to be liable and pay amounts exceeding the contractor’s remuneration under the contract. Civil legislation does not contain such restrictions, and therefore the parties are now free to regulate the extent of liability of the manufacturer (seller) of the goods at their own discretion.

3. Limitation on penalty calculation remains (now in the Civil Code)

The Law provides that the limitation on penalty calculation for delays in fulfillment of monetary obligations by debtors, which was previously provided in the Commercial Code (part 2 of Article 343 of the Commercial Code), is effectively transferred to the Civil Code and applies to all civil (not just business ones) contracts.

According to the Law, part 3 of Article 549 of the Civil Code will be supplemented with the following paragraph:

“A debtor who has overdue a monetary obligation shall, at the creditor’s request, be obliged to pay a penalty in favor of the creditor in the amount of a double discount rate of the National Bank of Ukraine effective during the period for which the penalty is paid. The agreement may stipulate a smaller amount of penalty”.

Previously, civil legislation did not provide for a maximum amount of penalty for delays in the fulfillment of monetary obligations. Therefore, as regards business entities, the regulation remains essentially unchanged.

4. Termination of operational-economic sanctions

With the abolition of the Commercial Code, the so-called economic sanctions will no longer apply and will be replaced by general civil liability of the parties. Overall, this change can be seen as a positive development, as civil regulation in this area is more consistent and modern.

An interesting consequence is the abolition of such operational-economic sanction as the refusal to enter into future economic relations with the party breaching obligations (para. 4 of part 1 of Article 236 of the Commercial Code).

This may be important in the context of public contracts, as under part 4 of Article 633 of the Civil Code, an entrepreneur does not have the right to refuse to conclude a public contract if he has the opportunity to provide the consumer with the relevant goods (works, services); in the case of an unreasonable refusal of the entrepreneur to enter into a public contract, he must compensate the consumer for damages caused by such refusal.

Thus, entrepreneurs who undertake obligations under a public contract lose the opportunity to avoid concluding a public contract by applying operational-economic sanction in the form of refusing to establish future economic relations with an unscrupulous party that has breached its obligations in the past.

Public contracts include, in particular, a warehouse storage contract concluded by a public warehouse (part 2 of Article 957 of the Civil Code).

5. Does the right to require the conclusion of a contract based on a preliminary contract still exist?

Both the Civil Code (Article 635 of the Civil Code) and the Commercial Code (Article 182 of the Commercial Code) provided for the conclusion of preliminary contracts, but with their own peculiarities.

The peculiarities of the regulation of preliminary contracts under the Commercial Code were that the term for concluding the main contract could not be longer than one year from the date of concluding the preliminary contract, and there was also a provision for the right of a party to demand the conclusion of the preliminary contract through court proceedings if the other party, having received the draft, avoided concluding the main contract.

Under the Civil Code, there is no time limit for concluding the main contract based on the preliminary contract. At the same time, the only consequence of a party’s evasion from concluding the main contract is the need to compensate the other party for damages caused by the delay, unless otherwise established by the preliminary contract or acts of civil legislation (according to part 2 of Article 635 of the Civil Code).

The judicial practice has confirmed that in civil law relations, the consequences of breaching the preliminary contract are provided for in part 2 of Article 635 of the Civil Code (see the resolution of the Supreme Court of Ukraine as of August 22, 2018, case No. 401/3856/16-ц). These consequences do not include the right to demand the conclusion of the main contract in court unless otherwise established by the same preliminary contract or acts of civil legislation.

In view of the above, if the parties to a preliminary contract wish to preserve the possibility of demanding the conclusion of the main contract through the court, they will now be obliged to include these conditions in the preliminary contract.

6. Is it necessary to submit a claim?

Among other things, with the abolition of the Commercial Code, the regulations regarding pre-trial settlement of disputes through sending a claim to the other party are also being abolished.

According to part 2 of Article 222 of the Commercial Code, if it is necessary to compensate for the losses or impose other sanctions, an economic entity or other legal person-participant of economic relations whose rights or legal interests have been violated shall be entitled to submit a written claim aimed at direct settlement with the offender unless otherwise provisioned by the law. The same Article 222 of the Commercial Code sets out the requirements for the claim’s content, the method of delivery, establishes a one-month period for considering the claim, and the requirements for sending a response to the claim.

Although part 2 of Article 222 of the Commercial Code specified the right (rather than the obligation) to submit a claim, there was always a risk that the court would negatively assess a party’s failure to comply with these requirements. Especially after the judicial reform of 2016, when part 3 of Article 124 of the Constitution of Ukraine provided that the law may establish a mandatory pre-trial dispute resolution procedure.

Although a claim (for a wide range of non-specific business contracts) is no longer legally required, we believe that the parties are still not prohibited from contacting their counterparties (including sending claims) for pre-trial dispute resolution, reconciliation of calculations, etc. Following the abolition of the Commercial Code, there is much less risk that failure to send a claim or any formal defects in it will affect the protection of rights in court.

Claims in the field of transportation

It should be separately noted that Article 315 of the Commercial Code, which established clear deadlines for submitting claims and responding to claims in disputes related to transportation, is also abolished.

Meanwhile, the current Article 925 of the Civil Code regarding the submission of claims to the carrier refers to procedure established by law, and transport codes (statutes). It should also be noted that if transportation is governed by a mandatory international agreement, the rules of the latter should be applied (for example, the Montreal Convention for the Unification of Certain Rules for International Carriage by Air as of May 28, 1999, and the Agreement on International Goods Transport by Rail of as November 1, 1951).

7. Limitation period for claims under a major construction contract

Chapter 33 “Capital Construction” of the Commercial Code is being completely abolished. Relevant relations are now regulated only by § 3 “Construction Contract” of Chapter 61 of the Civil Code and the general provisions on contracts of the Civil Code.

An important practical consequence of this is the cancellation of the special limitation period for claims under a capital construction contract provided for by the Civil Code (previously, the Commercial Code rules were considered to be the lex specialis and therefore took precedence).

In particular, according to part 3 of Article 322 of the Commercial Code:

“Limitation period for claims arising from negligence under the major construction contract shall be calculated from the acceptance day and shall be as follows:

one year – for defects of non-major constructions, and if it was impossible to find the defects during the usual acceptance procedure – two years;

three years – for defects of major constructions, and if it was impossible to find the defects during the usual acceptance procedure – ten years;

thirty years – for compensation for losses incurred by the customer due to illegal acts of the contractor that have led to destructions or accidents”.

Instead, Article 863 of the Civil Code will apply, which provides for shorter limitation periods: a one-year statute of limitations applies to claims regarding improper quality of work performed under the contractor agreement, and three years from the date of acceptance of the work by the customer for buildings and structures.

However, Article 884 of the Civil Code additionally provides for quality guarantees in the construction contract, namely that the warranty period is ten years from the date of acceptance of the object by the customer, unless a longer warranty period is established by contract or law. According to part 1 of Article 864 of the Civil Code, if the warranty period is established by the contract or the law and the statement about work defects is made within the warranty period, the statute of limitations begins from the date of the statement about defects.

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The abolition of the Commercial Code will result in the invalidation of many mandatory rules in the field of business contracts, many of which did not meet the needs of a free market and conflicted with the rules of civil legislation. The parties will have more freedom, but at the same time more responsibility to define the terms of the business contract according to their needs. Particular attention to the changes in regulation should be paid by the parties to contracts governed by legal provisions that are now being repealed, in particular, supply contracts, contracting of agricultural products, cargo transportation, construction contracts, and commercial concession.

The above commentary presents the general statement for information purposes only and as such may not be practically used in specific cases without professional advice.

Kind regards,

© WTS Consulting LLC, 2025

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