Commentary on the general jurisdiction court ruling on the dispute between the Client and Apple Rus LLC about the refusal to supply a computer after the outbreak of war.

Elena Gladysheva, Managing Partner at RI-Consulting Law Office, Moscow, on whether Article 524 of the Civil Code may be applied to relations under a retail sales contract? Should the court set aside the decision of the first instance? Is Apple Rus' reference to "material change of circumstances" and Article 451 of the Civil Code correct?

"In May, the Odintsovo City Court of Moscow Region resolved a dispute between Apple Rus LLC, a representative of Apple Inc. in Russia, and a buyer.

The subject of the dispute was compensation for damages, payment of penalties and fines, and compensation for moral damages in connection with Apple Rus LLC's unilateral withdrawal from the iMac computer sales contract. As follows from the judgment published on the website of the Odintsovo City Court of Moscow Region, on February 24, 2022 the buyer placed an order on the Apple website, but two days later the company cancelled the order, citing a significant change of circumstances in connection with the start of a special military operation. Later the customer was still able to buy the same computer from Citilink, but the purchase cost almost twice as much.

The court upheld the buyer's claims, recovering damages from Apple Rus LLC in the form of the difference in the price of the goods, as well as penalties, fines and compensation for moral harm. The court applied Article 524 of the Russian Federation Civil Code, which regulates the calculation of damages in the case of termination of a supply contract, to the losses incurred by the buyer due to the purchase of the computer from another store.

Apple Rus LLC did not agree with the ruling, in connection with which the case will be checked by the Moscow Regional Court on appeal.

The application by the court of the first instance of the norms on the contract of supply to the retail sales contract with the consumer, is not correct. Despite the fact that both delivery and retail sale are separate types of the contract of sale, their legal regulation is significantly different. First of all, these differences are dictated by the different subject composition: the retail sales contract is concluded between the seller-entrepreneur and the buyer, who acquires goods for personal, family, home use, while the supply contract is concluded between entrepreneurs. The purpose of acquiring goods by the buyer in a supply contract is exactly the opposite, and it must not be connected with household, family or personal use.

For this reason, the legal norms on delivery and retail sale are placed in separate paragraphs of Chapter 30 of the Civil Code of the Russian Federation. Subsidiary application of the norms on the contract of supply to the retail sales contract is not provided for in the law.

However, recovery of damages in the form of the difference between the price for the computer on the Apple website and the price for the computer ultimately purchased from Citilink is substantially correct in this case. The buyer placed an order on the Apple website, i.e., concluded a retail sales contract by accepting the public offer, which bound Apple Rus LLC to its terms. The improper performance of the contract by Apple Rus LLC together with the customer's purchase of a similar iMac from another store is grounds for recovery of damages under Article 393.1 of the Civil Code in the form of the difference between the price for the computer on the Apple website and the price for the computer ultimately purchased at Citilink.

Since the rules for calculating the amount of damages under Art. 393.1 and Art. 524 of the Civil Code are the same, the court of appeal is likely to recognize the decision rendered as containing formal violations, but correct in essence. Since, according to the legal position of the Supreme Court of the Russian Federation, the court is not bound by the proposed legal qualification of legal relations, the decision of the court of first instance is likely to be changed only in terms of the rules of law applicable to the recovered damages. The amount of damages itself may be left unchanged by the court.

At the same time, the appellate court is unlikely to agree with the arguments of Apple Rus LLC, referring to such grounds for termination of the contract with the buyer as a "material change of circumstances", provided for in Art. 451 of the RF Civil Code.

In accordance with the position of the highest courts (see, for example, Determination of the RF Supreme Court on civil cases dd. July 30, 2013 № 18-KG13-70), when deciding on the modification or termination of the contract under article 451 of the RF Civil Code it is necessary to consider legally significant circumstances, namely, the presence of a material change of circumstances, the time of its occurrence, the possibility to reasonably foresee this change.

The contract between the buyer and Apple Rus LLC was concluded on February 26, 2022, while the special military operation began two days earlier, on February 24, 2022. In addition, on February 26, 2022, the first joint sanctions of the United States, the EU, Canada, and the United Kingdom were imposed in connection with the start of the special military operation. That is, at the time of entering into a retail computer sales contract, the seller could have foreseen possible difficulties in bringing the equipment into the country, and therefore the termination of operations in Russia of the head office of Apple Inc. March 1, 2022 is not a material change of circumstances that a party could not reasonably have foreseen at the time of the contract," - said the attorney.

Also, Elena Gladysheva reported if buyers have the opportunity to sue sellers in such situations. Will the practice take shape in their favor? How can a company that left Russia defend itself against such claims? Or is it a lost cause for him?

"Of course, buyers have the right to appeal both to Rospotrebnadzor and directly to the court in similar situations, because the goods on the sites are placed on the terms of a public offer (an offer to buy for all comers without limit), so the buyer's refusal to sell such goods or increase the price after placing an order in the online store cannot be legal.

There is already similar practice in favor of buyers: since when selling goods, including in an online store, the buyer and seller actually conclude a sale transaction, similar provisions apply to the seller's refusal to fulfill its obligations as in any other case. In the case of the purchase of goods for personal needs, the buyer is also protected by the provisions of the Consumer Rights Protection Act.

In the case at hand, the question is not about the company that left Russia, the provisions of current law are the same for all. Regardless of whether the company has left the Russian market or not, the seller does not have the right to unilaterally refuse to sell goods already purchased. As a rule, refusal can be allowed only if the goods are out of stock, but, as a rule, such issues are resolved by agreement of the seller and the buyer."

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