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Ending the counselling relationship


Ending Therapy | Society for the Advancement of Psychotherapy

Termination of the Therapy Relationship

As with all relationships, a therapeutic relationship has a beginning and an end. The end of a therapeutic relationship often offers an opportunity for the therapist and client to engage in the termination process, which can include looking back on the course of treatment, helping the client plan ahead and saying goodbye.

Although recognized as important, the termination of therapy has not received the empirical attention it deserves. However, results from a few studies (e.g. Quintana & Holahan, 1992; Knox, Adrians, Everson, Hess, Hill & Crook-Lyon, 2011; Marx & Gelso, 1987) do offer some support for two theoretical perspectives on therapeutic endings. The first, termination-as-loss perspective, is rooted in psychodynamic theories and describes the termination of psychotherapy as a significant loss for the client and emphasizes the importance of working through this loss in therapy (Mann, 1973; Strupp & Binder, 1985). The second, termination-as-transformation perspective (Quintana, 1993; Maples & Walker, 2014), emphasizes termination as a time for internalizing growth and transforming the therapeutic relationship by providing clients with new insights about themselves and the therapeutic relationship. Related to both these perspectives, a body of research also offers support for the importance of the therapeutic relationship during the termination phase (Knox et al., 2011; Fragkiadaki & Strauss, 2012).

Studying the Termination Phase

Intrigued by the therapeutic relationship at the end of therapy, Charles J. Gelso and I examined therapists’ perceptions of three elements of the therapeutic relationship (i.e. the working alliance, real relationship and transference) during the termination phase in a recent study (Bhatia & Gelso, 2017). Following the widely used definition by Bordin (1979), the working alliance was conceptualized in terms of the working bond and the agreement of tasks and goals between the therapist and the client. Gelso (2011) defined the real relationship as the personal bond between the therapist and the client, characterized by the extent to which the therapist and client are genuine with each other and perceive each other realistically, and this conception of the real relationship was used in the study. Transference was conceptualized as the client’s experience of the therapist based on the client’s past experiences and involving a displacement of feelings, attitudes and behaviors rooted in earlier significant relationships onto the therapist (Gelso & Bhatia, 2012).

We used the following questions to guide our research; from the therapist’s point of view, how much time is spent in the termination phase? How do therapist perceptions of working alliance, real relationship and transference during the termination phase relate to the success of the overall treatment and the effectiveness of the termination phase? How do therapist perceptions of client sensitivity to loss associate with transference during the termination phase?

Our sample consisted of 233 licensed therapists in the U. S. of varying theoretical orientations. Therapists participating in the study identified a termination phase of treatment in their work with a client. The termination phase was defined as, “the last phase of counseling, during which the therapist and client consciously or unconsciously work toward bringing the treatment to an end” (Gelso & Woodhouse, 2002, pp. 346). Thus, at the outset, the findings and implications of the study do not address therapeutic endings that occur without warning and/or client dropouts. The major findings of the study and recommendations for clinical practice are discussed below.

Key Findings

The following key findings emerged from the results of the aforementioned study:

  1. Therapists reported the number of sessions included in the termination phase, as well as the total number of sessions included in treatment. Results indicated that the percentage of time spent on termination was approximately 17 percent of the total number of sessions.
  2. Examination of therapist ratings of termination phase evaluations and overall treatment outcome revealed that the success of the termination phase correlated with the success of overall treatment to a moderate extent (r=.30, p<.01).
  3. Therapist ratings of the working alliance and the real relationship during the termination phase correlated positively with termination phase evaluation and overall treatment outcome. In a regression model with the therapy relationship elements examined together, only the working alliance significantly predicted overall treatment outcome, highlighting its unique contribution to overall treatment outcome.
  4. Therapist ratings of transference (including both positive and negative transference) were positively associated with therapist ratings of perceived client sensitivity to loss.

Suggestions for Therapeutic Work in the Termination Phase

How can the results of the study inform therapeutic work? I offer below suggestions to consider during the termination phase. It is important to note here that these suggestions are not direct guidelines emerging from the results of the study; rather they are based on possible interpretations of the findings of this study, as well as on clinical impressions in therapeutic work. These recommendations need to be considered along with a theoretical understanding of individual cases in treatment.

Spending time on termination

As per therapist reports, the average percentage of time spent on bringing treatment to an end by talking about termination was found to be approximately 17 percent of the total number of sessions, a number similar to the 16.67 percent reported by Gelso and Woodhouse (2002) in their review of termination literature. Perhaps this number can provide a rough estimate of the time to be spent on bringing treatment to a close (although more research in this realm is certainly needed).

Effectiveness of the termination phase

From the therapist’s perspective, a successful termination phase is related to better overall treatment outcome, and yet termination phase evaluations also appear to be distinct from overall treatment outcome. This finding is in line with Joyce, Piper, Ogrodniczuk, and Klien’s (2007) suggestion that the outcomes of the termination phase differ from overall treatment outcomes. In treatment then, there appears to be value in the therapist tending to the client’s experience of the termination phase, perhaps by exploring client satisfaction with the termination phase and reflecting upon the therapeutic work being done during the termination phase, over and above overall treatment outcomes.

The working alliance during the termination phase

Therapist reports reveal that the role of the alliance is particularly important during the termination phase. In light of this finding, it seems helpful to revisit the alliance and bring it to the forefront of therapeutic work during the termination phase. For example, consolidating and discussing treatment goals, a component of the working alliance, can be an important component of the termination process (Norcross, Zimmerman, Greenberg & Swift, 2017). It may also help to discuss goals pertaining specifically to the termination phase to strengthen the alliance during the termination phase. For instance, in therapeutic work with a client expressing difficulty with ending relationships, the therapist and client may determine together to work through the end of the therapeutic relationship by providing a space for the client to mourn and express feelings about the ending.

The real relationship during the termination phase

The strength of the personal bond between the therapist and the client during the termination phase also relates to good outcomes. Thus, it would benefit therapists to pay attention to the real relationship during the termination phase. Therapists can use the following questions to reflect on the strength of the real relationship; is there a real and personal relationship between the client and I, over and above a professional relationship? Am I able to understand and express what I truly feel about my client? Does my client appear to be sharing vulnerable material with me? These are just a few examples of questions that might provide insight into the strength of the real relationship (see Gelso, 2011).

Transference during the termination phase

Given the positive relationship between perceived client sensitivity to loss and transference, it appears valuable for therapists to be particularly attuned to the transference during the termination phase in the context of the client’s previous loss experiences. How transference is dealt with in therapeutic work often depends on theoretical orientation (Gelso & Bhatia, 2012), however, it appears that clients may experience feelings towards the therapist at the end of treatment as a result of previous losses across theoretical orientations. These feelings seem to be both positive and negative, at least in the eyes of the therapist, and not necessarily related to negative outcomes. Tending to transference, both positive and negative in valence, would likely represent areas of meaningful therapeutic work during termination.

Summary

To conclude, the termination phase in therapeutic work offers a unique opportunity to reflect on the ending relationship and to process the ending in the context of previous losses. Key implications for therapists include tending to the working alliance, real relationship and transference during the termination phase and evaluating the effectiveness of the termination phase of therapeutic work.

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Counseling termination and new beginnings

When preparing for a symphony, a conductor will often tell the musicians that the last note is as important as the first; after all, the last note is what the listeners will take with them. For that reason, the final note of a symphony requires just as much artistry, thought and attention as the first note.

Much like the final note of a symphony, counseling termination requires a great deal of creativity and attention to detail. Although termination is an often neglected concept in the counseling literature, it is supremely important.

Termination is the term most commonly used to describe the process of finalizing or ending a counseling experience. Yet that word conjures up images of abrupt endings or even death, so we wish that a better phrase could be identified to describe counseling endings and transitions. Perhaps the words finale or commencement, or even the euphemism new beginnings, would better capture the termination process.

Many if not most of our clients have experienced traumatic or adverse life experiences. Thus, the termination process can be particularly triggering and take on an even more significant meaning for these populations. Because of its importance, we believe that the termination process merits a closer look.

Ethics and termination

Ethically, it is a counselor’s duty to prepare clients for the counseling termination process and to terminate services when clients are no longer benefiting from counseling. Therefore, counselors ought to be thinking about termination, even at a first session.

When the time comes to end the therapeutic relationship, it is natural for there to be feelings of grief and loss and even an adjustment period. Some clients may struggle to negotiate healthy boundaries and the termination of relationships. Furthermore, clients who have experienced abuse or trauma may be especially sensitive to relationship transitions. 

Ending a therapeutic relationship requires a great deal of thought. If done ethically and competently, termination can help solidify counseling gains, empowering clients to integrate their experiences and bravely face their next chapter in life. Termination can also help model healthy boundaries and a natural and appropriate end to a relationship. Effective termination provides clients with an opportunity for continued personal growth, whereas ineffective termination can actually harm clients.

Preparing clients for termination

To best prepare clients for termination, it is essential that counselors proactively address termination. Ideally, termination should be introduced during the informed consent process. In fact, by openly discussing termination from the beginning of counseling, counselors may help galvanize client motivation because clients will see counseling as something temporary that can be used to help them reach a defined set of goals.

By weaving the idea of termination into informed consent, counselors can also encourage and elicit client feedback regarding the progress being made in counseling. Thus, clients will be liberated from the fear of “disappointing” their counselor by raising the idea of ending counseling once they feel they have received what they needed from the counseling experience. Remaining transparent about termination, from the initiation of counseling, can help clients invest in reaching their goals while concurrently empowering them to voice when they feel they are ready to end counseling.

Counselor adjustment to termination

Just as clients often experience a tangle of feelings around the end of a counseling relationship, counselors themselves can have emotional reactions to termination. As counselors, we invest much time, emotional and intellectual energy, and dedication to helping our clients. After all, the lifeblood of the counseling profession is based on building a warm connection with those we serve. As a byproduct of this relationship process, counselors do indeed develop emotions and thoughts regarding their clients. Consequently, when the counseling relationship ends, there is an adjustment period for counselors too.

Ideally, this adjustment period would include a space for self-supervision, with counselors objectively evaluating their performance and efficacy with the client. Counselors can identify potential growth areas and reflect on their professional strengths as part of this process.

Before engaging in such objective evaluation, however, counselors may need to sort through their residual feelings of loss. These feelings may be further complicated by countertransference. If, for instance, a counselor’s personal experience aligned with that of the client who recently terminated, the counselor’s emotional reaction may be intensified. If there is a positive prognosis for the client, the termination process may catalyze feelings in the counselor of fulfillment, competency and even confidence. If, however, the client terminates abruptly or has a less than favorable prognosis, the counselor may experience feelings of incompetence and disillusionment, especially if the counselor’s lived experiences mirror those of the client. In these instances, counselors must make processing their emotions around termination a priority.

Although it is imperative to cultivate self-awareness surrounding countertransference throughout the counseling relationship, monitoring countertransference at termination may be especially important. Counselors ought to be cognizant of their emotions and willing to process these emotions, whether positive or negative, at the end of a counseling relationship.

In summation, while clients often experience grief and a sense of loss at the conclusion of the counseling process, counselors may also have emotional reactions to the termination process. Counselors should monitor these reactions, discuss them in supervision, consult with peers, and seek personal counseling if necessary to ensure that even as they adjust to the loss of a therapeutic relationship with a client, the quality of the services they provide to their remaining clients remains top-notch. Being aware that termination is a two-way street that affects the counselor-client dyad allows counselors to more effectively understand, and thus cope with, the emotions and thoughts that ending a therapeutic relationship may stir up.

Client ambivalence around termination

Even when counselors introduce the discussion of termination in the initial stages of the counseling relationship, it is natural for many clients to experience some anxiety and disillusionment with the idea. After all, the counseling relationship may be one of the only times, if not the only time, in their lives when they have experienced safety, trust, compassion and care. Given that these virtues are basic human needs, it makes sense that clients may be reluctant to end the counseling relationship.

Some clients may manifest this reluctance by continually raising “new” issues or concerns anytime the possibility of termination is mentioned. Clients may even return to the behaviors that led them to counseling initially. For example, a client who self-injures and works toward abstinence over the course of counseling may engage in self-injury again as the idea of termination nears. Rather than viewing this as a counseling failure, counselors should remember that, like counseling itself, termination is not linear.

At its core, termination involves the ending of a relationship, likely resulting in feelings of grief and loss. Thus, space should be made for clients to experience, rather than avoid, those feelings that come with the natural ending of a relationship. Encouraging clients to utilize the coping and emotional regulation skills they have gained over the course of counseling can assist in managing the emotions surrounding termination. This action also helps to reinforce the learning that occurred throughout the counseling process. Walking alongside clients as they grieve the loss of the counseling relationship allows them to experience the conclusion of a relationship in a nurturing and empathetic environment and helps them develop so that they can better manage future losses and transitions.

Counselors should continually assess for termination readiness when working with clients. One way to do this is to ask clients questions such as, “Do you think you are benefiting from counseling?” and “How will you know when our time here together is coming to an end?” Questions such as these set an expectation that counseling will end and serve to empower clients to help determine when it will conclude. By trusting clients and actively listening to their experiences and sense of how they are (or are not) benefiting from counseling, counselors help clients prepare for the termination process.

The termination process

When it comes to the actual process of termination, counselors can take many different approaches with clients. The interests and developmental level of clients and the content of counseling should all be considered when planning termination activities. Termination is often an ideal time to incorporate active, engaging and creative interventions that encourage clients to engage in active learning and reflection upon the counseling process as a whole.

Often, as termination nears, client engagement and enthusiasm in counseling diminish. By using active and creative termination interventions, counselors can inject new enthusiasm into the last several counseling sessions. Clients tend to more readily remember counseling interventions in which they are interactively involved.

Regardless of the specific intervention used, termination is an ideal time to incorporate an optimistic, empowering and future-oriented approach. Counselors can compassionately empathize with clients who are reluctant to terminate while concurrently encouraging them to see the end of counseling as a new adventure in which they can apply the skills they have learned throughout counseling. Assuming such a tone as a counselor assists clients in developing a future-focused orientation. This may help propel them through the natural grieving process that often accompanies the ending of a counseling relationship.

Creative termination activities 

A variety of creative termination techniques can be used with clients. Ideally, the counselor can dedicate several sessions to fully processing and exploring the termination process. A few examples of creative termination activities follow.

One-way trip for trauma: This activity can be used with clients who have worked on trauma issues or those who have worked to let go of something while in counseling. Clients can take the materials that they have accumulated throughout the counseling process that are associated with their trauma narratives — writings, journals, worksheets, illustrations, etc. — and either rip them up, color over them, or simply fold them neatly.

After the materials are collected, counselors should provide clients with a small box or container (these are easily obtained from everyday recycled products or by purchasing them in bulk on the internet). Next, clients can be given a variety of tape. Clients then
place their trauma narrative materials into the container, tape the container shut, and decorate the container as they see fit. At this point, counselors can process with clients how their traumatic past need not dictate their future. Clients can then discuss how leaving the counseling relationship symbolizes their having processed and worked through their trauma.

This intervention can also be paired with a “new beginning” celebration to signify the start of a new chapter in clients’ lives. Although shifting the language from “termination” to “new beginning” may seem like nothing more than a euphemism, the language is immensely important. Helping
clients who have a history of trauma understand that they do indeed have a future, despite the pain and hopelessness they have endured in the past, is a powerful intervention.

Sticker chart/memory book: Younger clients may struggle to fully grasp the concept of termination or to engage in metacognitive reflection on the counseling process as a whole. Thus, with these clients, more developmentally appropriate and artistic interventions are often indicated. For instance, a sticker or picture chart could be maintained throughout the counseling process, with clients placing a sticker on the chart each time they come to counseling. Clients can even draw pictures, along with using the stickers, to illustrate a “story” of their time in counseling. As termination approaches, clients can further illustrate their chart, review what they have learned so far, and place more stickers on the chart signifying their achievements in counseling.

Another effective approach is working together with younger clients to create a memory book with pictures, words, stickers and decorations that will help them remember their time in counseling in a more concrete manner. Both of these interventions allow child clients to take a tangible item with them as they end the counseling process.

Aloha lei (hello-goodbye) activity: Counselors can explain to clients that the word aloha means both hello and goodbye. Counselors can then discuss with clients that every end is the start of a new beginning, as is the case with the end of counseling.

For the activity, paper flowers can be cut out (clients can select the color of the materials to enhance autonomy). Clients can write effective coping skills, memorable counseling experiences, or other notable takeaways on the flowers. Next, punch a hole in each flower and thread them along the string. Family members or caregivers can also be involved in the process (with client consent), adding their own flowers to the lei. The lei can then be given to the client as a parting gift. This intervention involves creativity and metaphor in a way that summarizes the counseling experience while actively involving the client.

Building blocks: This activity can be tailored to clients of any age. During the final session, counselors can bring a number of building blocks, Legos, Jenga blocks, or other toy blocks to session. Clients can then construct a tower or creation of their choosing. Each block in the creation can represent a powerful moment in counseling, a coping skill clients now possess, or another skill clients have learned during counseling.

As the height of the tower increases, clients may become anxious, especially as the tower begins to lean. If the tower ultimately falls, the counselor can explain that, given the clients’ fundamental skills — the skills they assigned to each block — the tower can be rebuilt. This intervention helps clients understand that even if they experience the inevitable “falls” of life, they possess the fundamental “building block” skills to rebuild. This intervention is a tactile and empowering activity for the end of counseling.

Goodbye letter: There are many variations of a goodbye letter that can be used as the counseling process comes to a close. Counselors can provide a letter template with certain blanks to be filled in, or they can simply provide a blank piece of paper on which clients can write their own letter. Adding prompts or sentence stems for clients to complete can add a degree of structure to the letter.

There is flexibility in terms of the letter’s point of view. Goodbye letters can be written from client to counselor, from counselor to client, or even from the perspective of the process of counseling itself being personified. Possible writing prompts include “One thing I remember from counseling is …” or “The most memorable moment of counseling was …” Although counselor creativity can yield limitless possible prompts, it is important that the goodbye letter be narrowed to focus on the most relevant moments of the counseling process. It is also important to keep the activity strengths-based (as is the case with any termination activity).

Survivor tree: Survivor trees can serve as a creative intervention to foster and celebrate resilience in the final stage of the counseling relationship. They can be either simple or complex, depending on the clients’ developmental abilities. Survivor trees may be drawn out to explore clients’ areas of growth (the branches), clients’ future hopes and aspirations (leaves and buds), coping skills that clients have learned in order to stay grounded (the trunk and roots), and even what struggles clients have worked through in counseling (dead leaves beneath the tree).

As the tree grows and expands on the paper, the counselor can weave in the idea that trees survive multiple seasons every year. Some seasons leave barren branches, whereas other seasons are rife with leaves and buds. Nevertheless, the tree survives and continues to bloom, even after a cold or barren season. Clients can then reflect how their resilience has allowed them to overcome previous barren seasons. They might also reflect on how the skills they learned in counseling can help engender resilience during future difficult seasons of life. Taking the example of the tree eventually blooming despite the adversity of winter, clients can explore how they can go forth in life and bloom beautifully, no matter the adversities they face.

Making a case for counseling: With this activity, clients are invited to create a “case” and fill it with various objects to help them summarize and conceptualize their experience in counseling. Depending on the client’s interests, the case can take on a variety of forms (e. g., a purse, an athletic shoebox, a favorite cereal box). Client autonomy can be reinforced by allowing clients creative license in decorating and designing their cases.

Clients can be encouraged to include various objects in the box that they find important and valuable to the counseling process (e.g., a grounding stone, a worksheet with coping skills, a journal). Furthermore, clients can create decorative scraps of paper to add to the box. These papers can include notable moments in counseling, emotions surrounding the counseling process, skills learned, or other tools with which the client can face the future trials and travails of life outside of the counseling relationship. If family members or significant others are involved in the counseling process, they can also add items to the client’s case (if the client agrees to their participation). This intervention is relatively open to interpretation and can include myriad creative avenues to help clients gain closure.

New beginnings

Regardless of the specific intervention used, termination is a vital part of the counseling process. During termination, counselors should convey a great deal of warmth and compassion to clients, while simultaneously aiming to empower them and promote their self-worth.

To reiterate, it is important to understand that semantics matter. The word termination conjures up brutal images of loss. In truth, the end of counseling is really the start of a new beginning; it is as if one chapter is closing and counselors are handing the pen off to clients to write their own next chapters. In so doing, counselors play their role in helping to ensure that the next chapter will be a good one.

The end of counseling, just like the end of a symphony, is not simply the end. Rather, it is a resounding note that acts as a gateway to new beginnings.

 

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Victoria Kress is a professor at Youngstown State University and a licensed professional clinical counselor supervisor, a national certified counselor, and a certified clinical mental health counselor. She has published a number of journal articles on counseling termination and further addresses the topic in her textbooks, Counseling Children and Adolescents and Treating Those With Mental Disorders. Contact her at [email protected].

Marissa Marie is a licensed professional counselor working at Youth Intensive Services in Youngstown, Ohio. She uses trauma counseling with those who have been involved in the sex trafficking industry. Contact her at [email protected].

 

Letters to the editor: [email protected]

Counseling Today reviews unsolicited articles written by American Counseling Association members. To access writing guidelines and tips for having an article accepted for publication, go to ct.counseling.org/feedback.

 

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Opinions expressed and statements made in articles appearing on CT Online should not be assumed to represent the opinions of the editors or policies of the American Counseling Association.

Application. A review of the practice of applying by arbitration courts of the norms of the Civil Code of the Russian Federation on certain reasons for the termination of obligations

Appendix

Review

of the use of

Courts of the Civil Code of the Russian Federation

On some grounds for termination of obligations

1. unless otherwise provided agreement of the parties, the termination of the contract entails the termination of obligations for the future and does not deprive the creditor of the right to demand from the debtor the amounts of the principal debt and property sanctions formed before the termination of the contract in connection with non-performance or improper performance of the contract. nine0003

A closed joint-stock company filed a lawsuit against a limited liability company with an arbitration court to recover the amount of rent arrears and a contractual penalty for delay in paying it.

By decision of the court of first instance, the claim was denied, since the disputed lease agreement was terminated by agreement of the parties and the obligations arising from it, by virtue of the provisions of paragraph 2 of Article 453 of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation, the Code), were terminated. nine0003

The court of cassation annulled the decision of the court of first instance on the following grounds.

The parties concluded a lease agreement for non-residential premises for a period of one year. Seven months after the conclusion of the contract, it was terminated by agreement of the parties. Since the defendant by the time of termination of the contract formed a debt on rent, the plaintiff applied to the arbitration court with the specified requirement.

Pursuant to paragraph 1 of article 407 of the Civil Code of the Russian Federation, an obligation is terminated in whole or in part on the grounds provided for by the Code, other laws, other legal acts or an agreement. In accordance with paragraph 2 of Article 453 of the Civil Code of the Russian Federation, upon termination of the contract, the obligations of the parties cease. It follows from the content of paragraph 3 of Article 453 of the Civil Code of the Russian Federation that in the event of termination of the contract, obligations are considered terminated from the moment the parties conclude an agreement to terminate the contract, unless otherwise follows from this agreement. nine0003

As follows from the materials of the case, until the termination of the contract, there were no circumstances indicating the termination of obligations between the parties. Therefore, the term of the contract at the time of its termination has not expired.

Thus, the defendant is obliged to pay the plaintiff the amount of rent arrears and, unless otherwise provided by the agreement on termination of the contract, the very fact of termination of the contract does not terminate this obligation and does not exclude the possibility of applying liability measures in connection with the tenant's violation of the terms of the contract. Termination of the lease agreement entails the termination of obligations for the future and does not deprive the lessor of the right to demand from the tenant the amount of the principal debt and property sanctions formed before the termination of the agreement in connection with the failure of the latter to fulfill the agreement. nine0003

The agreement of the parties to terminate the lease agreement does not release the tenant from the obligation to pay the lessor the rent arrears and the contractual penalty for late payment in accordance with the requirements of paragraph 3 of Article 453 of the Civil Code of the Russian Federation.

Since the court of first instance did not examine the validity of the amount of money claimed by the plaintiff, the case was sent for a new trial on the merits.

2. The customer's unilateral refusal to perform the contract for the provision of services for compensation (clause 1 of Article 782 of the Civil Code of the Russian Federation) does not terminate the customer's obligation to pay the contractor the necessary expenses that he has incurred on account of services not yet rendered until the moment the customer unilaterally refuses to perform the contract. nine0003

The joint-stock company filed a claim with the arbitration court against the limited liability company for the recovery of expenses incurred on account of services not rendered until the moment the customer unilaterally refused to perform the contract.

It followed from the materials of the case that between the plaintiff (executor) and the defendant (customer) a contract for the provision of consulting services was concluded for a period of one year. During the first three months, the contractor provided the customer with services that were paid for, but then the customer, referring to the provisions of paragraph 1 of Article 782 of the Civil Code of the Russian Federation, unilaterally refused to fulfill the contract for the provision of services for compensation. nine0003

The plaintiff, in support of the existence of these expenses, referred to the involvement of co-executors in the execution of the contract for the provision of services for a fee, which corresponds to the terms of this contract. In connection with the unilateral refusal of the defendant from the contract, the plaintiff was subject to compensation for the costs associated with the provision of services by co-executors.

In objections to the claim, the defendant believed that, within the meaning of paragraph 1 of Article 782 of the Civil Code of the Russian Federation, the plaintiff has the right to recover only the expenses actually incurred by him in connection with the services already rendered. The mentioned norm does not regulate the issue of payment of expenses incurred by the contractor in connection with the services not provided at the time of the unilateral refusal of the customer. Consequently, the unilateral refusal of the customer to execute the contract for the provision of services for compensation terminates his obligation to pay the contractor the named expenses. nine0003

The Court of First Instance recognized the defendant's arguments as well founded and dismissed the claim.

The Court of Cassation annulled the decision of the Court of First Instance and sent the case back for a new trial on the following grounds.

Unilateral refusal to perform the contract is allowed only in cases stipulated by law or the contract. Article 782 of the Civil Code of the Russian Federation establishes one of such cases when the obligations of the customer and the contractor are terminated due to a unilateral refusal to fulfill the contract for the provision of services for compensation. nine0003

By virtue of paragraph 1 of Article 779 of the Civil Code of the Russian Federation, 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. In accordance with paragraph 1 of Article 781 of the Code, the customer is obliged to pay for the services rendered to him on time and in the manner specified in the contract. These norms of the law, establishing the obligation of the customer to pay the contractor for the services rendered by him, do not regulate the issue of paying the contractor for the expenses incurred by him in connection with the services rendered. At the same time, in accordance with paragraph 1 of Article 782 of the Civil Code of the Russian Federation, the customer has the right to refuse to execute the contract for the provision of services for compensation, provided that the contractor pays the expenses actually incurred by him. The named legislative norm just regulates those cases when the contractor has incurred expenses on account of services not yet rendered in connection with the unilateral refusal of the customer from the contract. nine0003

Thus, the conclusion of the court of first instance on the termination of the customer's obligation to pay the contractor the costs that he incurred on account of the services not provided until the customer's unilateral withdrawal from the contract of services is incorrect.

Since, when resolving the dispute, the court of first instance incorrectly applied the substantive law and therefore did not consider the issue of the presence and amount of these costs, as well as the question of whether these costs are necessary for the execution of the contract between the contractor and the customer, the case was sent for a new trial . nine0003

3. The relationship between the creditor and the debtor to forgive the debt can be qualified as a gift only if the court establishes the intention of the creditor to release the debtor from the obligation to pay the debt as a gift. In this case, debt forgiveness must be subject to the prohibitions established by Article 575 of the Civil Code of the Russian Federation, paragraph 4 of which does not allow donations in relations between commercial organizations.

A limited liability company (lender) applied to an arbitration court with a claim against a joint-stock company (borrower) to recover interest under a loan agreement and a penalty for late repayment of the loan amount. nine0003

As follows from the documents submitted to the court, the defendant, having received funds from the plaintiff under the loan agreement, undertook to return the loan amount and pay interest for the use of the funds within the time period established by the agreement. Since the borrower did not fulfill his obligations in a timely manner, the head of the lender sent a letter to him demanding to immediately return the loan amount, indicating that if this requirement is met, the lender will release the borrower from paying interest for the use of funds and penalties for late repayment of the loan amount. The borrower repaid the loan. nine0003

In his objections to the claim, the defendant pointed out that he had no obligation to pay interest and penalties, since these obligations were terminated by debt forgiveness.

The Court of First Instance satisfied the claim, motivating its decision as follows.

Debt forgiveness is the release by the creditor of the debtor from property obligations. In this regard, debt forgiveness is a kind of donation (Article 572 of the Civil Code of the Russian Federation), therefore it must be subject to the prohibitions established by Article 575 of the Civil Code of the Russian Federation, in accordance with paragraph 4 of which gifts are not allowed in relations between commercial organizations. nine0003

Thus, the forgiveness of the debt by the lender is void, does not entail any consequences, therefore the borrower's obligation to pay interest under the loan agreement and the penalty for late repayment of the loan amount has not ceased.

The court of cassation annulled the decision of the court of first instance and dismissed the claim on the following grounds.

In accordance with Article 415 of the Civil Code of the Russian Federation, an obligation is terminated by the release by the creditor of the debtor from his obligations, if this does not violate the rights of other persons in relation to the property of the creditor. nine0003

No information was provided to the Court on the basis of which it would be possible to conclude that the debt forgiveness violated the rights of third parties in relation to the creditor's property.

Assessing the court of first instance's qualification of debt forgiveness as a type of donation, the court of cassation pointed out that the qualifying sign of a donation is, in accordance with paragraph 1 of Article 572 of the Code, its gratuitousness. At the same time, civil law proceeds from the presumption that the contract is compensated (paragraph 3 of Article 423 of the Civil Code of the Russian Federation). Therefore, the forgiveness of a debt is a gift only if the court establishes the intention of the creditor to release the debtor from the obligation to pay the debt as a gift. The absence of the creditor's intention to gift the debtor may be evidenced, in particular, by the relationship between the forgiveness of the debt and the receipt by the creditor of property benefits under any obligation between the same persons. nine0003

Having examined the relations of the parties, the court of cassation found that the purpose of the debt forgiveness transaction was to ensure the return of the amount of the debt in the unforgiven part without going to court, that is, the creditor had no intention to gift the debtor.

Since in this case the creditor had no intention of releasing the debtor from his obligation as a gift, the claim was dismissed.

4. An obligation may be terminated on the grounds provided for in Article 417 of the Civil Code of the Russian Federation, and in cases where an act of a local government body has been issued that makes it impossible to fulfill the obligation. nine0003

The limited liability company filed a claim with the arbitration court against the joint-stock company for the recovery of a penalty in connection with the latter's failure to fulfill the obligation to provide an advance.

As follows from the case file, the parties concluded a construction contract, according to which the plaintiff undertook to build a processing plant on a land plot owned by the defendant. The defendant violated the obligation in terms of the timely provision of an advance to the plaintiff, so the latter filed a lawsuit in court. nine0003

The defendant asked the court to dismiss the plaintiff's claim, referring to the fact that his obligations to the plaintiff ceased due to the publication after the conclusion of this agreement of the decision of the head of the administration of the municipality, as a result of which the fulfillment of the obligation became impossible (Article 417 of the Civil Code of the Russian Federation). By the aforementioned resolution, the land plot, on the basis of paragraph 1 of Article 11 of the Land Code of the Russian Federation, was seized for municipal needs.

The Court of First Instance disagreed with the defendant's opinion and satisfied the claim on the basis of the following. nine0003

The basis for termination of an obligation, provided for in Article 417 of the Civil Code of the Russian Federation, is the impossibility of performance due to the issuance of an act by a state body, which includes federal bodies and bodies of constituent entities of the Russian Federation. The provisions of this article of the Code cannot be applied in the event of an act of a local self-government body issuing, therefore the defendant's reference to the termination of the obligation is incorrect.

The court of cassation annulled the decision of the court of first instance and dismissed the claim on the following grounds. nine0003

According to paragraph 1 of article 417 of the Civil Code of the Russian Federation, if, as a result of the issuance of an act of a state body, the fulfillment of an obligation becomes impossible in whole or in part, the obligation is terminated in full or in the corresponding part. The parties that have suffered losses as a result of this have the right to demand their compensation, based on Articles 13 and 16 of the Code, which establish the same procedure for compensating losses caused to a citizen or legal entity as a result of illegal actions (inaction) of both state acts and local governments. It follows that these losses may also arise when an act of a local self-government body is issued, including one that makes it impossible to fulfill an obligation. nine0003

Based on this, the court of cassation stated: the interpretation of the provisions of Articles 13, 16, 417 of the Civil Code of the Russian Federation allows us to conclude that the obligation can be terminated due to the impossibility of performance even in cases where an act of a local government body has been issued.

At the same time, the court of cassation recognized that since the issue of the consequences of the issuance by a local government of an act that made the fulfillment of an obligation impossible is not directly regulated by law, paragraph 1 of Article 6 of the Civil Code of the Russian Federation (an analogy of the law) is subject to application. Similar relations are regulated by Article 417 of the Code, which should be applied to the relations in question. nine0003

Thus, the obligations of the parties arising from the construction contract, by virtue of Article 417 of the Civil Code of the Russian Federation, have ceased.

5. Revocation of the debtor's license caused by illegal actions of the licensee, and failure to fulfill the obligations in connection with this, are not grounds for the termination of the debtor's obligations as a result of the issuance of an act by a state body (Article 417 of the Civil Code of the Russian Federation).

The joint-stock company applied to the arbitration court with a claim against the limited liability company for the recovery of damages in connection with the failure to fulfill the obligation. nine0003

As follows from the materials of the case, an agreement was concluded between the parties, according to which the defendant undertook to carry out certain activities for compensation. By virtue of the provisions of paragraph 1 of Article 49 of the Civil Code of the Russian Federation and the Federal Law "On Licensing Certain Types of Activities", the defendant has the right to engage in this activity only on the basis of a special permit (license). At the date of conclusion of the contract, the defendant had a license.

Subsequently, due to repeated violations of licensing requirements and conditions, the authorized state body applied to the court to annul the license issued to the limited liability company to carry out the relevant activities. The application was granted. nine0003

The defendant ceased to fulfill his obligations under the contract with the plaintiff, referring to the impossibility of fulfilling them. If, as a result of the issuance of an act of a state body, the fulfillment of an obligation becomes impossible in whole or in part, the obligation is terminated in full or in the relevant part (paragraph 1 of Article 417 of the Civil Code of the Russian Federation). At the same time, this norm does not imply the possibility of compensation for losses in connection with the termination of the obligation.

In substantiation of the claim, the plaintiff pointed out that the defendant's reference to the termination of the obligation due to the impossibility of performance in this case is untenable. The defendant was deprived of a license to carry out certain activities due to his illegal actions, that is, he himself contributed to the impossibility of fulfilling the obligation. nine0003

The court recognized the plaintiff's position as justified and satisfied the claim, based on the following.

According to paragraph 1 of Article 416 of the Code, an obligation is terminated by the impossibility of performance if it is caused by a circumstance for which neither party is responsible. In particular, one of such circumstances is the termination of the obligation as a result of the issuance of an act by a state body (paragraph 1 of Article 417 of the Civil Code of the Russian Federation), including related to the deprivation of a license to carry out a certain type of activity. However, in the case under consideration, the deprivation of the defendant's license was caused by the latter's unlawful actions, that is, by the circumstance for which he, based on the content of paragraph 1 of Article 416 of the Code, is responsible. Since the impossibility of fulfilling the obligation has actually occurred and the limited liability company is responsible for this within the meaning of Article 416 of the Civil Code of the Russian Federation, the defendant's obligation to carry out activities in kind has ceased, but not the obligation to compensate for losses caused by the fact that execution in kind did not follow. nine0003

Having applied the general provisions on liability for failure to fulfill an obligation, the court satisfied the claim.

6. From the moment of completion of the liquidation of an institution, the creditors of this institution who have not declared their claims in the process of liquidation of the institution shall lose the right to satisfy such claims at the expense of the owner of the property of this institution.

The joint-stock company applied to the arbitration court with a claim against the municipality represented by the city administration for the recovery of debts for the equipment supplied to the municipal institution. nine0003

From the materials of the case it followed that between the joint-stock company (the seller) and the municipal institution (the buyer) a contract of sale was concluded. The buyer received the equipment, but did not pay due to lack of funds. Subsequently, by the decision of the owner of the property of the institution (municipal formation represented by the city administration), the institution was liquidated, as evidenced by an extract from the register of legal entities on its liquidation. At the same time, no violations of the established procedure for the liquidation of the institution were identified. nine0003

Consultant Plus: note.

Federal Law No. 99-FZ of May 5, 2014, effective September 1, 2014, Article 63 of the Civil Code of the Russian Federation was amended. Provisions on subsidiary liability of the owner of the property of an institution being liquidated for the obligations of this institution are contained in paragraph 7 of Article 63 of the new wording.

The joint-stock company based its claim on the provisions of paragraph 6 of Article 63 of the Civil Code of the Russian Federation, according to which, if the liquidated institution does not have enough funds to satisfy the claims of creditors, the latter have the right to apply to the court with a claim to satisfy the remaining part of the claims at the expense of the owner of the property of this institution. In addition, the plaintiff referred to the fact that, based on paragraph 2 of Article 120 of the Civil Code of the Russian Federation, if an institution has insufficient funds to satisfy creditors' claims, the owner of the relevant property bears subsidiary liability for its obligations. nine0003

The claim was satisfied by the decision of the court of first instance: the debt of the liquidated institution was collected from the municipality.

The court of cassation annulled the decision of the court of first instance and dismissed the claim on the following grounds.

In accordance with the provisions of Article 407 of the Civil Code of the Russian Federation, an obligation is terminated in whole or in part on the grounds provided for by the Code, other laws, other legal acts or an agreement.

By virtue of Article 419 of the Civil Code of the Russian Federation, an obligation is terminated by the liquidation of a legal entity (debtor or creditor), except in cases where, by law or other legal acts, the fulfillment of the obligation of a liquidated legal entity is assigned to another person (for claims for compensation for harm caused to life or health, and etc.). nine0003

It follows from paragraph 6 of Article 63 of the Civil Code of the Russian Federation that this provision refers to the satisfaction of creditors of a liquidated (that is, in the process of liquidation), and not a liquidated institution. If a creditor makes a claim against a legal entity (institution) being liquidated, the owner of the property of the latter shall bear subsidiary liability for the debts of the institution. If a creditor fails to present a corresponding claim against an institution in the process of liquidation, he shall be deprived of the right to present a claim against a subsidiary debtor. nine0003

The materials of the case testified that the plaintiff did not file a corresponding claim during the liquidation of the institution, therefore, he lost the right to collect debts from the owner of the property of the institution for claims not declared by him during the liquidation process.

In this regard, by virtue of Article 419 of the Civil Code of the Russian Federation, the obligation of the institution ceased from the moment of its liquidation.

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3.2.3. Upon request, receive from the Contractor complete and reliable information about the prospects (probability) of admission to educational programs at universities included in the list, which was compiled as a result of receiving services in accordance with this Agreement.

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