Chapter 23. Enforcement of obligations.

Article 329. Ways to ensure the fulfillment of obligations.
1. Fulfillment of obligations may be secured by a forfeit, pledge, retention of the property of the debtor, a guarantee, a bank guarantee, a deposit, and other means provided for by law or by contract. 2. The invalidity of the agreement on ensuring the fulfillment of the obligation does not entail the invalidity of this obligation (the main obligation). 3. The invalidity of the principal obligation shall entail the invalidity of the obligation securing it, unless otherwise provided by law.

Article 330. The concept of a penalty.
1. A penalty (fine, interest) shall be recognized as a sum of money determined by a law or contract that the debtor is obliged to pay to the creditor in the event of non-performance or improper performance of the obligation, in particular in case of delay in performance. Upon request for payment of the penalty, the lender is not obliged to prove the loss caused to him. 2. The creditor shall not have the right to demand the payment of a penalty if the debtor is not responsible for the failure to perform or improper performance of the obligation.

Article 331. The form of the agreement on the penalty.
The agreement on the penalty shall be made in writing, regardless of the form of the principal obligation. Failure to comply with the written form entails invalidity of the agreement on the penalty.

Article 332. Legal Penalty.
1. A creditor shall have the right to demand payment of a penalty specified by law (legal penalty), regardless of whether the obligation to pay it is provided for by agreement of the parties. 2. The amount of the legal penalty may be increased by agreement of the parties, unless the law prohibits it.

Article 333. Reduction of the penalty.
If the penalty to be paid is clearly disproportionate to the consequences of the violation of the obligation, the court has the right to reduce the penalty. The rules of this article do not affect the right of the debtor to reduce the amount of his responsibility on the basis of article 404 of this Code and the right of the creditor to recover damages in the cases provided for by article 394 of this Code.

Article 334. The concept and grounds for the emergence of pledge.
1. By virtue of the pledge, the creditor of the secured obligation (pledgee) has the right, in the event that the debtor fails to fulfill this obligation, to obtain satisfaction from the value of the pledged property primarily to other creditors of the person who owns this property (pledger), with the exemptions established by law. The mortgagee has the right to receive on the same basis satisfaction from the insurance indemnity for loss or damage to the mortgaged property, regardless of whose benefit it is insured, unless the loss or damage occurred for reasons for which the mortgagee is responsible. 2. The pledge of land, enterprises, buildings, structures, apartments and other real estate (mortgage) is governed by the law on mortgage. The general rules on pledge contained in this Code apply to mortgages in cases where no other rules are established by this Code or the law on mortgages. 3. The pledge arises by virtue of the contract. A pledge also arises on the basis of the law upon the occurrence of the circumstances specified in it, if the law provides for which property and for ensuring the fulfillment of which obligation is recognized to be in the pledge. The rules of this Code on a pledge arising by virtue of an agreement shall apply accordingly to a pledge arising on the basis of a law, unless otherwise provided by law.

Article 335. Pledger.
1. The pledger can be either the debtor himself or a third party. 2. The pledger of a thing may be its owner or a person who has the right of economic control over it. The person to whom the thing belongs under the right of economic management has the right to pledge it without the consent of the owner in the cases provided for by paragraph 2 of Article 295 of this Code. 3. The pledger of the right may be the person to whom the pledged right belongs. The pledge of the right to rent or another right to someone else's thing is not allowed without the consent of its owner or a person who has the right of economic management, if the alienation of this right is prohibited by law or agreement.

Article 336. Subject of pledge.
1. The subject of pledge may be any property, including things and property rights (claims), with the exception of property withdrawn from circulation, claims that are inseparably connected with the identity of the creditor, in particular claims for alimony, for damages caused to life or health and other rights, the assignment of which to another person is prohibited by law. 2. The pledge of certain types of property, in particular the property of citizens, to which repossession is not permitted, may be prohibited or restricted by law.

Article 337. Claim secured by pledge.
Unless otherwise provided by the contract, the pledge ensures the claim to the extent it has at the time of satisfaction, in particular, interest, penalty, damages caused by the delay in execution, as well as reimbursement of the necessary expenses of the pledgee for the maintenance of the pledged thing and the cost of recovery.

Article 338. Pledge without transfer and with transfer of the pledged property to the pledgee.
1. The mortgaged property shall remain with the mortgagor, unless otherwise provided by the contract. The property on which the mortgage is established, as well as the pledged goods in circulation are not transferred to the pledgee. 2. The subject of pledge may be left with the pledger under lock and seal of the pledge holder. The subject of the pledge may be left with the pledger with the imposition of signs testifying to the pledge (firm pledge). 3. The subject of a pledge transferred by the pledger for the time in the possession or use of a third party shall be considered abandoned by the pledger. 4. When pledging a property right certified by a security, it is transferred to the pledgee or to a notary deposit, unless otherwise provided by the contract.

Article 339. The contract of pledge, its form and registration.
1. The pledge agreement must indicate the subject of the pledge and its assessment, the substance, the amount and the period of performance of the obligation secured by the pledge. It should also indicate which of the parties has the mortgaged property. 2. The pledge agreement must be concluded in writing. An agreement on the pledge of movable property or rights to property to secure obligations under the agreement, which must be notarized, is subject to notarization. 3. The mortgage agreement must be registered in the manner prescribed for the registration of transactions with the relevant property. 4. Non-observance of the rules contained in paragraphs 2 and 3 of this article shall entail the invalidity of the pledge agreement.

Article 340. Property subject to the rights of the pledgee.
1. The rights of the pledgee (the right of pledge) to the thing that is the subject of the pledge shall apply to its property, unless otherwise provided by the contract. The right to pledge received as a result of the use of the mortgaged property, products and income shall be extended in cases provided for by the contract. 2. In case of a mortgage of an enterprise or other property complex as a whole, the right of pledge extends to all property, movable and immovable, included in its composition, including claims and exclusive rights, including those acquired during the period of the mortgage, unless otherwise provided by law or contract. 3. Mortgage of a building or structure is allowed only with a simultaneous mortgage on the same contract of the land plot on which this building or structure is located, or a part of this lot that functionally provides for the pledged object, or the leaseholder’s right to lease this lot or its corresponding part. 4. In the case of mortgage of a land plot, the right of pledge extends to the buildings and facilities of the pledger located or erected on this site, unless otherwise provided in the contract. If such a condition is present in the contract, the mortgagor, in the event of foreclosure of the pledged land, retains the right of limited use (servitude) by that part which is necessary for using the building or structure in accordance with its purpose. The terms of use of this part of the plot are determined by agreement between the pledgor and the pledgee, and in the event of a dispute - by the court. 5. If a mortgage is installed on a land plot on which buildings or structures are located that belong not to the mortgagor but to another person, then when the mortgagee appeals to this lot and sells it from public auction to the acquirer of the lot, the rights and obligations that persons had a mortgagor. 6. A pledge agreement, and in respect of a pledge arising on the basis of the law, the law may provide for a pledge of things and property rights that the pledger will acquire in the future.

Article 341. The emergence of the right of pledge.
1. The right of pledge arises from the moment of the conclusion of the pledge agreement, and in relation to the pledge of property that is to be transferred to the pledgee, from the moment of transfer of this property, unless otherwise provided by the agreement on pledge. 2. The right to pledge goods in circulation arises in accordance with the rules of paragraph 2 of Article 357 of this Code.

Article 342. Subsequent pledge.
1. If the property in the pledge becomes the subject of another pledge to secure other claims (subsequent pledge), the claims of the subsequent pledge holder are satisfied from the value of this property after the claims of the previous pledge holders. 2. Subsequent pledge is allowed, if it is not prohibited by previous agreements on pledge. 3. The mortgagor is obliged to inform each subsequent mortgagee of the information on all existing pledges of this property, stipulated by paragraph 1 of Article 339 of this Code, and is responsible for losses caused to the mortgagees by failure to fulfill this duty.

Article 343. Maintenance and preservation of mortgaged property.
1. The pledger or the pledgee, depending on which of them has the mortgaged property (Article 338), is obliged, unless otherwise provided by law or contract: 1) to insure at the expense of the pledger the mortgaged property in its full value against the risks of loss and damage, and if the full value of the property exceeds the amount of the claim secured by the pledge, in an amount not less than the amount of the claim; 2) to take measures necessary to ensure the safety of the pledged property, including to protect it from encroachments and claims from third parties; 3) immediately notify the other party about the threat of loss or damage to the pledged property. 2. The mortgagee and the mortgagor shall have the right to check by documents and in fact the availability, quantity, condition and storage conditions of the mortgaged property held by the other party. 3. In the event of gross violation by the pledgee of the obligations specified in clause 1 of this article, which creates a threat of loss or damage to the pledged property, the pledger shall have the right to demand early termination of the pledge.

Article 344. Consequences of loss or damage to the pledged property.
1. The pledger shall bear the risk of accidental loss or accidental damage to the pledged property, unless otherwise provided by the contract of pledge. 2. The pledgee is responsible for the complete or partial loss or damage to the pledged item transferred to him, unless he proves that he can be released from liability in accordance with Article 401 of this Code. The mortgagee is responsible for the loss of the collateral in the amount of its actual value, and for its damage - in the amount by which this value has decreased, regardless of the amount in which the collateral was evaluated during its transfer to the mortgagee. If, as a result of damage to the object of pledge, it has changed so much that it cannot be used for its intended purpose, the pledger has the right to refuse it and to demand compensation for its loss. The contract may provide for the obligation of the mortgagee to compensate the mortgagor for other damages caused by the loss or damage of the collateral. A pledger who is a debtor under an obligation secured by a pledge has the right to set off the claim to the pledgee for compensation for losses caused by the loss or damage of the subject of the pledge in order to pay off the obligation secured by the pledge.

Article 345. Replacement and restoration of the pledged item.
1. Replacement of a pledged item is allowed with the consent of the pledgee, unless otherwise provided by law or contract. 2. If the pledged property has been lost or damaged, or the right of ownership to it or the right of economic management has been terminated on the grounds established by law, the pledger has the right to restore the pledged object within a reasonable time or replace it with other equivalent property, unless otherwise provided by the contract.

Article 346. Use and disposal of the subject of pledge.
1. The pledger shall have the right, unless otherwise provided by the contract and does not follow from the essence of the pledge, to use the subject of pledge in accordance with its purpose, including extracting from it fruits and incomes. 2. Unless otherwise provided by law or contract and does not follow from the essence of the pledge, the pledger is entitled to alienate the pledged item, transfer it to rent or use another person free of charge or otherwise dispose of it only with the consent of the pledgee. An agreement restricting the right of the pledger to bequeath the pledged property shall be null and void. 3. The pledge holder shall have the right to use the subject of the pledge transferred to him only in cases provided for by the contract, regularly submitting a report on use to the pledger. Under the contract, the pledgee may be charged with the obligation to extract the fruits and income from the subject of the pledge in order to repay the principal obligation or in the interests of the pledger.

Article 347. Protection by the pledgee of their rights to the subject of pledge.
1. A pledge holder who has or should have had pledged property has the right to reclaim it from someone else’s unlawful possession, including from the possession of the pledger (Articles 301, 302, 305). 2. In cases where, under the terms of the contract, the pledgee is granted the right to use the pledged item transferred to him, he may demand from other persons, including the pledger, to eliminate any violations of his right, even if these violations were not connected with deprivation of possession ( Articles 304, 305).

Article 348. Grounds for foreclosure of mortgaged property.
1. Recovery of the mortgaged property to meet the requirements of the pledgee (creditor) may be applied in the event of the debtor’s default or improper performance of the obligation due to the circumstances for which he is liable. 2. The foreclosure of the pledged property may be denied if the violation of the obligation secured by the pledge by the debtor is extremely insignificant and the amount of the pledgeholder’s claims as a result is clearly disproportionate to the value of the pledged property.

Article 349. Procedure for foreclosure of pledged property.
1. The requirements of the pledgee (creditor) are satisfied from the value of the pledged real estate by a court decision. Satisfaction of the pledgee's requirement at the expense of the pledged immovable property without going to court is allowed on the basis of a notarized agreement of the pledgee with the pledger, entered into after the grounds for executing a foreclosure on the subject of pledge have arisen. Such an agreement may be invalidated by a court at the request of a person whose rights are violated by such an agreement. 2. The requirements of the pledgee are satisfied at the expense of the pledged movable property by the decision of the court, unless otherwise provided by agreement of the pledger with the pledgee. However, the subject of the pledge transferred to the pledgee may be levied in the manner prescribed by the pledge agreement, unless otherwise established by law. 3. A penalty on a pledged item may be imposed only by a court decision in cases where: 1) for the conclusion of a pledge agreement, the consent or permission of another person or body was required; 2) the subject of pledge is property with significant historical, artistic, or other cultural value for society; 3) the mortgagor is absent and it is impossible to establish his location.

Article 350. Realization of the pledged property.
1. The sale (sale) of the pledged property, on which, in accordance with Article 349 of this Code, is levied, is carried out by selling at public auction in the manner prescribed by procedural legislation, unless otherwise established by law. 2. At the request of the mortgagor, the court may, in a decision on foreclosure of the mortgaged property, postpone its sale from public auction for a period of up to one year. The delay does not affect the rights and obligations of the parties to the obligation secured by the pledge of this property, and does not exempt the debtor from reimbursement of the lender’s increased damages and penalties. 3. The initial sale price of the pledged property, with which the bidding begins, is determined by a court decision in cases of foreclosure of the property in a court of law or by agreement of the pledgee with the pledger in other cases. Pledged property is sold to the person who offered the highest bid at the auction. 4. When tenders are declared failed, the pledgee is entitled, by agreement with the pledger, to acquire the pledged property and set off against his purchase price his claims secured by the pledge. To such an agreement, the rules on the contract of sale. When declaring a failed bidding, the pledgee has the right to retain the subject of the pledge with an estimate of not more than ten percent lower than the initial selling price at the repeated bidding. If the pledgee does not exercise the right to retain the subject of pledge for a month from the date of the announcement of the repeated bidding invalid, the pledge agreement is terminated. 5. If the amount received during the sale of the pledged property is insufficient to cover the claim of the mortgagee, he has the right, unless otherwise specified in a law or contract, to receive the missing amount from the debtor’s other property, without taking advantage of the pledge. 6. If the amount received during the sale of the pledged property exceeds the amount of the mortgagee’s claim secured by the pledge, the difference is returned to the pledger. 7. The debtor and the pledger, who is a third party, shall have the right at any time prior to the sale of the pledged item to terminate the foreclosure and its implementation by fulfilling the obligation or the part of the pledge secured by the pledge. An agreement restricting this right is void.

Article 351. Early fulfillment of the obligation secured by a pledge, and foreclosure of the mortgaged property.
1. The pledge holder shall have the right to demand the early fulfillment of the obligation secured by the pledge in the following cases: 1) if the pledged item has been withdrawn from the possession of the pledger with whom it was left, not in accordance with the terms of the pledge agreement; 2) violation by the pledger of the rules on the replacement of the subject of pledge (Article 345); 3) loss of the pledged item due to circumstances for which the pledgee is not responsible if the pledger has not exercised the right provided for by paragraph 2 of Article 345 of this Code. 2. The pledge holder shall have the right to demand the early fulfillment of the obligation secured by the pledge, and if his claim is not met, to foreclose on the subject of pledge in the following cases: 1) violation by the pledger of the rules on subsequent pledge (Article 342); 2) non-fulfillment by the pledger of the obligations provided for by sub-clauses 1 and 2 of clause 1 and clause 2 of article 343 of this Code; 3) violation by the pledger of the rules on the disposal of the pledged property (paragraph 2 of Article 346).

Article 352. Termination of Pledge.
1. The deposit is terminated: 1) with the termination of the obligation secured by the pledge; 2) at the request of the mortgagor if there are grounds provided for by paragraph 3 of Article 343 of this Code; 3) in the event of the death of the pledged thing or the termination of the pledged right, if the pledger has not exercised the right provided for by paragraph 2 of Article 345 of this Code; 4) in the case of sale from public auction of the pledged property, as well as in the case when its realization was not possible (clause 4 of Article 350). 2. On the termination of the mortgage, a note must be made in the register in which the mortgage agreement is registered. 3. When a pledge is terminated due to the fulfillment of the obligation secured by the pledge or at the request of the pledger (clause 3 of Article 343), the pledgee who owned the pledged property is obliged to immediately return it to the pledger.

Article 353. Preservation of pledge in case of transfer of the right to pledged property to another person.
1. In case of transfer of ownership of the mortgaged property or the right of economic management of the property to the other person as a result of the alienation of this property for compensation or free of charge or as a universal succession, the right of pledge remains valid. The successor of the mortgagor becomes the place of the mortgagor and bears all the obligations of the mortgagor, unless otherwise specified by agreement with the mortgagee. 2. If the property of the mortgagor, which is the subject of the pledge, has been transferred in the order of succession to several persons, each of the legal successors (acquirers of the property) shall bear the consequences of the non-performance of the obligation secured by the pledge in proportion to the transferred property. However, if the subject of the pledge is indivisible or for other reasons remains in the common ownership of the legal successors, they become joint pledgers.

Article 354. Consequences of the Forced Seizure of Pledged Property.
1. If the mortgagor’s title to the pledged property is terminated on the grounds and in the manner prescribed by law, as a result of withdrawal (redemption) for state or municipal needs, requisition or nationalization, the pledger is granted other property or a corresponding compensation, the pledge right extends to the property provided in return or, respectively, the pledgee acquires the right of priority satisfaction of his claim from the amount due redeemer. The pledgee is also entitled to demand early performance of the obligation secured by the pledge. 2. In cases when the property that is the subject of a pledge is withdrawn from the pledger in accordance with the procedure established by law, on the grounds that in reality the owner of this property is another person (Article 301), or in the form of a sanction for the commission of a crime or other offense (Article 243 ), the pledge in respect of this property is terminated. In these cases, the pledgee has the right to demand early performance of the obligation secured by the pledge.

Article 355. Concession of rights under a pledge agreement.
The pledgee is entitled to transfer his rights under the pledge agreement to another person in compliance with the rules on the transfer of creditor rights by assigning the claim (Articles 382 - 390). The assignment by the pledgee of their rights under the pledge agreement to another person is valid if the same person has been assigned the rights of claim against the debtor under the main obligation secured by the pledge. Unless proven otherwise, the assignment of rights under a mortgage agreement also means the assignment of rights under the obligation secured by the mortgage.

Article 356. Transfer of a debt under an obligation secured by a pledge.
With the transfer to another person of the debt on the obligation secured by the pledge, the pledge is terminated if the pledger has not given the lender consent to be responsible for the new debtor.

Article 357. Pledge of goods in circulation.
1. A pledge of goods in circulation shall be recognized as a pledge of goods, leaving them with the pledger and granting the pledger the right to change the composition and physical form of the pledged property (inventories, raw materials, materials, semi-finished products, finished products, etc.) provided that their total the cost does not become less than that specified in the pledge agreement. Reducing the value of the pledged goods in circulation is allowed in proportion to the performance of the part of the obligation secured by the pledge, unless otherwise provided by the contract. 2. Goods in circulation alienated by the mortgagor cease to be the subject of a mortgage from the moment they become property, economic management or operational management of the acquirer, and the goods purchased by the mortgagor specified in the agreement on mortgage are the subject of mortgage from the moment the mortgagor has received the right of ownership or economic management. 3. The pledger of goods in circulation is required to keep a pledge record book in which records are made about the conditions of pledge of goods and about all transactions entailing a change in the composition or natural form of the pledged goods, including their processing, on the day of the last operation. 4. If the mortgagor violates the conditions for the pledge of goods in circulation, the mortgagee shall have the right, by imposing his signs and seals on the mortgaged goods, to suspend operations with them until the violation is remedied.

Article 358. Pledge of things in a pawnshop.
1. Acceptance from citizens in pledge of movable property intended for personal consumption to secure short-term loans can be carried out as an entrepreneurial activity by specialized organizations - pawnshops. 2. An agreement on the pledge of things in a pawnshop is executed by issuing a pawnshop of a pledge ticket. 3. Pledged items are transferred to the pawnshop. A pawnshop is obliged to insure in favor of the mortgagor at its own expense things accepted as pledge in the full amount of their assessment, established in accordance with the prices of things of this kind and quality, usually established in trade at the moment of their acceptance as pledge. The pawn shop has no right to use and dispose of the pledged things. 4. The pawn shop is responsible for the loss and damage of the pledged things, unless it proves that the loss or damage occurred due to force majeure. 5. If the loan amount secured by the pawnshop pledge is not returned within the established time, the pawnshop is entitled, on the basis of the notary’s executive order, to sell this property at the end of the monthly grace period in accordance with the procedure established for the sale of the pledged property (clauses 3, 4, 6 and 7 350). After this, the pawnshop’s claims on the pledger (debtor) are paid off, even if the amount received from the sale of the pledged property is not sufficient to fully satisfy them. 6. Rules for crediting citizens by pawnshops on the security of things belonging to citizens shall be established by law in accordance with this Code. 7. The terms of the pledge of things in a pawnshop that restrict the rights of the mortgagor compared to the rights granted to him by this Code and other laws are void. Instead of such conditions apply the relevant provisions of the law.

Article 359. Grounds for withholding.
1. A creditor who has a thing to be transferred to the debtor or to a person indicated by the debtor has the right in case the debtor fails to fulfill the obligation to pay the thing or reimburse the creditor of the costs and other losses due to it until the relevant obligation will be done. The retention of a thing can also provide for requirements, although not related to the payment of the thing or the reimbursement of the costs of it and other losses, but arising from the obligation, the parties to which act as entrepreneurs. 2. The creditor may retain the thing in his possession, despite the fact that after this thing came into the possession of the creditor, the rights to it were acquired by a third party. 3. The rules of this Article shall apply, unless the contract provides otherwise.

Article 360. Satisfaction of claims at the expense of property held.
The claims of the creditor holding the thing shall be satisfied from its value in the amount and manner provided for the satisfaction of the claims secured by the pledge.

Article 361. Contract of Guarantee.
Under the contract of surety, the surety is obligated to the creditor of another person to be responsible for the fulfillment by the latter of his obligations in full or in part. A guarantee agreement may also be entered into to secure an obligation that arises in the future.

Article 362. The form of a contract of guarantee.
The contract of guarantee must be made in writing. Failure to comply with the written form entails the invalidity of the contract of guarantee.

Article 363. The responsibility of the guarantor.
1. In the event of non-performance or improper performance by the debtor of the obligation secured by the surety, the surety and the debtor shall be jointly and severally liable to the creditor, unless the subsidiary liability of the surety is provided for by the law or the surety agreement. 2. The guarantor shall be liable to the creditor in the same amount as the debtor, including payment of interest, reimbursement of legal costs to recover the debt and other losses of the creditor caused by the debtor’s failure to perform or improper performance of the obligation, unless otherwise provided by the surety agreement. 3. Persons who have jointly given a guarantee shall be liable jointly and severally to the creditor, unless otherwise provided by the contract of guarantee.

Article 364. The right of the guarantor to object to the creditor’s claim.
The guarantor has the right to make objections against the creditor’s claim that the debtor could submit, unless otherwise provided by the contract of guarantee. The guarantor does not lose the right to these objections, even if the debtor refused them or acknowledged his debt.

Article 365. Rights of the guarantor who has fulfilled the obligation.
1. The rights of the creditor under this obligation and the rights that belonged to the creditor as the pledgee shall pass to the guarantor who fulfilled the obligation to the extent that the guarantor satisfied the creditor's claim. The guarantor also has the right to demand from the debtor payment of interest on the amount paid to the creditor, and compensation for other losses incurred in connection with the responsibility for the debtor. 2. Upon fulfillment of the obligations by the guarantor, the creditor is obliged to hand the documents to the guarantor certifying the claim against the debtor and transfer the rights securing this claim. 3. The rules established by this article shall apply, unless otherwise provided by law, other legal acts or the contract of the surety with the debtor and does not follow from the relations between them.

Article 366. Notification of the surety about the performance of the obligation by the debtor.
The debtor who has fulfilled the obligation secured by the surety shall be obliged to immediately notify the surety. Otherwise, the guarantor, in turn, who fulfilled the obligation, has the right to recover from the creditor the unjustifiably received or file a recourse against the debtor. In the latter case, the debtor is entitled to recover from the creditor only unjustly received.

Article 367. Termination of a guarantee.
1. A surety ceases with the termination of the obligation secured by it, and also in the event of a change in this obligation, entailing an increase in liability or other adverse consequences for the surety, without the consent of the latter. 2. A surety ceases with the transfer to another person of the debt under the obligation secured by the surety, unless the surety has given consent to the creditor to be responsible for the new debtor. 3. A surety shall be terminated if the creditor has refused to accept the proper performance offered by the debtor or surety. 4. A surety shall terminate upon the expiration of the period for which it is specified in the surety agreement. If such a term is not set, it shall terminate if the creditor does not file a claim against the guarantor within a year from the date the due date for the performance of the obligation secured by the surety. When the deadline for the fulfillment of the principal obligation is not specified and cannot be determined or determined by the moment of demand, the guarantee is terminated if the creditor does not file a claim against the surety within two years from the date of the conclusion of the guarantee agreement.

Article 368. The concept of a bank guarantee.
By virtue of a bank guarantee, a bank, other credit institution or insurance organization (guarantor) shall, at the request of another person (principal), give a written obligation to pay the principal (the beneficiary) to the creditor in accordance with the conditions of the obligation given by the guarantor upon the written request for payment.

Article 369. Providing a bank guarantee of the obligation of the principal.
1. The bank guarantee ensures that the principal fulfills its obligation to the beneficiary (principal obligation). 2. For issuing a bank guarantee, the principal shall pay a remuneration to the guarantor.

Article 370. Independence of a bank guarantee from the principal obligation.
The obligation of the guarantor to the beneficiary provided for by the bank guarantee does not depend in relations between them on the principal obligation to secure the performance of which it was issued, even if the guarantee refers to this obligation.

Article 371. Irrevocability of a bank guarantee.
The bank guarantee may not be revoked by the guarantor, unless it provides otherwise.

Article 372. Non-transferability of rights under a bank guarantee.
The right of claim to the guarantor belonging to the beneficiary under the bank guarantee cannot be transferred to another person unless otherwise provided in the guarantee.

Article 373. Entry into force of a bank guarantee.
The bank guarantee comes into force from the date of its issuance, unless otherwise provided in the guarantee.

Article 374. Submission of requirements for bank guarantees.
1. The requirement of the beneficiary to pay the sum of money under the bank guarantee must be presented to the guarantor in writing with the documents specified in the guarantee attached. In the request or in the annex to it, the beneficiary must indicate what the principal’s violation is of the principal obligation, in support of which the guarantee was issued. 2. The request of the beneficiary must be submitted to the guarantor before the expiry of the period specified in the guarantee for which it was issued.

Article 375. Obligations of the guarantor when considering the requirements of the beneficiary.
1. Upon receipt of the beneficiary’s request, the guarantor must notify the principal of this without delay and hand him a copy of the request with all documents relating to it. 2. The guarantor must consider the requirement of the beneficiary with the documents attached to it within a reasonable time and exercise reasonable care to establish whether this requirement and the documents attached to it meet the conditions of the guarantee.

Article 376. Refusal of the guarantor to satisfy the requirement of the beneficiary.
1. The guarantor refuses the beneficiary to satisfy his demand if this demand or the documents attached to it do not meet the conditions of the guarantee or are presented to the guarantor after the expiry of the term specified in the guarantee. The guarantor must immediately notify the beneficiary of the refusal to satisfy his request. 2. If it became known to the guarantor before the beneficiary’s claim was satisfied that the principal obligation secured by the bank guarantee has already been fulfilled, fully or in the relevant part, has ceased on other grounds or is invalid, he should immediately inform the beneficiary and the principal of this. The recurring claim of the beneficiary received by the guarantor after such notification shall be satisfied by the guarantor.

Article 377. Limits of the obligation of the guarantor.
1. The obligation of the guarantor to the beneficiary provided for by the bank guarantee is limited to the payment of the amount for which the guarantee was issued. 2. The responsibility of the guarantor to the beneficiary for non-fulfillment or improper fulfillment by the guarantor of the guarantee obligation is not limited to the amount for which the guarantee is issued, unless otherwise provided in the guarantee.

Article 378. Termination of a bank guarantee.
1. The obligation of the guarantor to the beneficiary of the guarantee shall cease: 1) payment to the beneficiary of the amount for which the guarantee was issued; 2) the expiry of the period specified in the guarantee for which it was issued; 3) due to the refusal of the beneficiary of their rights under the guarantee and returning it to the guarantor; 4) due to the refusal of the beneficiary of his rights under the guarantee by a written statement of release of the guarantor from his obligations. Termination of the obligation of the guarantor on the grounds specified in subparagraphs 1, 2 and 4 of this paragraph does not depend on whether the guarantee is returned to him. 2. The guarantor, who has become aware of the termination of the guarantee, must immediately notify the principal thereof.

Article 379. Regressive requirements of the guarantor to the principal.
1. The right of the guarantor to demand from the principal in recourse the reimbursement of the sums paid to the beneficiary under the bank guarantee is determined by agreement of the guarantor with the principal, in fulfillment of which the guarantee was issued. 2. The guarantor is not entitled to demand from the principal compensation of the sums paid to the beneficiary not in accordance with the terms of the guarantee or for violation of the guarantor’s obligation to the beneficiary, unless otherwise provided by the guarantor’s agreement with the principal.

Article 380. The concept of the deposit. The form of the agreement on the deposit.
1. A deposit shall be a sum of money issued by one of the contracting parties on account of payments due from it under the payment agreement to the other party, as evidence of the conclusion of the agreement and as a guarantee of its execution. 2. Agreement on the deposit, regardless of the amount of the deposit must be made in writing. 3. In case of doubt as to whether the amount paid on account of payments due from the party under the contract is a deposit, in particular due to non-compliance with the rule established by clause 2 of this article, this amount is considered to be paid as an advance, unless proven otherwise.

Article 381. Consequences of the termination and non-performance of the obligation secured by a deposit.
1. If an obligation is terminated prior to the commencement of its performance, by agreement of the parties or due to the impossibility of performance (Article 416), the deposit must be returned. 2. If the party that provided the deposit is responsible for the non-performance of the contract, it remains with the other party. If the party that received the deposit is responsible for the non-performance of the contract, it is obliged to pay the other party a double deposit amount. Moreover, the party responsible for the non-performance of the contract is obliged to compensate the other party for the losses, offsetting the amount of the deposit, unless otherwise provided in the contract.

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