Kazakhstan contract law

KAZAKHSTAN CONTRACT LAW

Primary statute regulating contracts in Kazakhstan is Kazakhstan Civil Code. Other statutes and acts could be used as specific acts.

Freedom of a contract approach

Kazakh laws allow to make any contract parties would like. For instance, it could be combination of a sale and purchase agreement with a rental agreement. There are no limitations for variations as any contract will be valid and enforceable. However, certain basic requirements should be considered.

Basic requirements

For a certain type of contract, Kazakhstan Civil Code sets provisions that a contract must have. Otherwise, such contract will not be valid and enforceable.

Written form a contract

For commercial contracts it is the main condition that a contract is presented in written form, in order to avoid any disputes in business. However, some deals such as single purchase in a retail store, public services or contract with public offer could be made without written form, and the accept of the offer by making any action would be sufficient for compliance with the law.

Notary certification of the contract

Kazakhstan laws require to certify a contract by notary for any deals with real estate and immovable property or transfer of shares in a company with limited liability.

Offer and accept concept

Kazakhstan Civil Code allows parties to use offer and accept form of making contracts. However, Kazakhstan practice shows that majority of contracts are made after negotiations, offers and proposals. After general and important conditions, parties discuss details in the drafted contract.

At the same time, we could see that business uses offer with all the conditions to avoid any unrelated risks.

Electronical signature

Kazakhstan laws, as alternative, allow to use electronic signature for signing contracts. State laws guarantee that a contract with electronic signature will be equal to paper version of a contract if an electronic signature is issued in compliance with local requirements.

Corporate and certain approvals

Other laws must be considered in Kazakhstan contract law. For instance, Family Act requires spouse’s consent and approval of a contract, if a contract is subject to notary certification. Therefore, when an individual sales shares, his or her marriage partner must give consent for such sale certified by notary.

Regulations by other fields

For instance, a distribution agreement must comply with competition law. Otherwise, there will be high penalties.

For certain type of retail operations, the Consumer Protection Act must be considered in order to decrease any commercial risks.

Currency regulations

Local contracts could be made only with local currency payments. However, there are many expectations for using foreign currency payments for different areas. For instance, foreign legal entities and individuals could make payments in foreign currency, however currency regulations must be considered.

Enforcement of a contract

Contracts can be enforced in courts for any contract breach. However, some contracts can be enforced by notary if a contract was made by notary certification and the other party failed to implement the contract. Any written objections to notary regarding the contract, will be automatically transferred to the court capacity to review a dispute.

Our recommendations

We recommend considering state court practice for any kind of a contract in order to draft contract that will be effective in terms of future disputes and enforcement. For instance, for a construction type of contract, historically formed court practice must be considered for drafting provisions related to scope of work.

This review was prepared by Synergy Partners lawyers Mr Nurzhan Stamkulov and Mrs Symbat Tursyngali.