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Universidade Autónoma de Lisboa
e-ISSN: 1647-7251
Vol. 10, Nº. 2 (November 2019-April 2020), pp. 141-151
BETWEEN FREEDOM OF CONTRACT AND THE PRINCIPLE OF GOOD FAITH: AN
INSIDE VIEW ON THE REFORM OF PRIVATE LAW OF KAZAKHSTAN
Kamal K. Sabirov
sabirov.k@gmail.com
PhD student in Legal Sciences at L.N. Gumilyov Eurasian National University and Senior
Researcher at the Institute of Legislation of the Republic of Kazakhstan. He is the author of more
than 40 scientific articles in Kazakh and Russian languages in the field of private law issues and
active participant of the law making process in Kazakhstan.
Venera T. Konussova
konussova@mail.ru
Deputy Director of the Institute of Legislation of the Republic of Kazakhstan; PhD in Legal
Sciences. She is one of the developers of the Enterprise Code of the Republic of Kazakhstan and
one of the authors of the Kazakhstan’s law on advocacy.
Marat A. Alenov
lscc@mail.ru
Doctor of Law, Professor at L.N. Gumilyov Eurasian National University. He is one of the lead
experts in Civil Procedure in Kazakhstan. He is the author of a large number of works in the field
of private law and civil procedure.
Abstract
Over the years since Kazakhstan gained independence there have been cardinal changes in
the country's economy associated with the inflow of foreign investments. These changes
require the implementation of foreign experience in regulating economic relations and in
particularly foreign contractual institutions. The International Financial Center "Astana" has
started functioning in Kazakhstan since 2018. The acts of the International Financial Center
are based on the principles and norms of law of England and Wales. In this regard, a large-
scale reform of the private law of the Republic of Kazakhstan was launched, aimed at
identifying a number of civil-law ideas and designs that can be measured out in the Kazakh
legislation from English law. The authors of this research are direct participants of the reform.
This study is aimed at highlighting one of the issues considered within the framework of the
reform of private law: strengthening the role of the principle of freedom of contract and the
principle of good faith in the contract law of the Republic of Kazakhstan.
Keywords
Principle of good faith; freedom of contract; bona fide purchaser; legislation of Kazakhstan;
private law of Kazakhstan
How to cite this article
Sabirov, Kamal K., Konussova, Venera T.; Alenov, Marat A. (2019). "Between freedom of
contract and the principle of good faith: an inside view on the reform of private law of
Kazakhstan". JANUS.NET e-journal of International Relations, Vol. 10, N.º 2, November 2019-
April 2020. Consulted [online] on the date of the last visit, https://doi.org/10.26619/1647-
7251.10.2.10
Article received on March 5, 2018 and accepted for publication on September 25, 2019
JANUS.NET, e-journal of International Relations
e-ISSN: 1647-7251
Vol. 10, Nº. 2 (November 2019-April 2020), pp. 141-151
Between freedom of contract and the principle of good faith:
an inside view on the reform of private law of Kazakhstan
Kamal K. Sabirov, Venera T. Konussova, Marat A. Alenov
142
BETWEEN FREEDOM OF CONTRACT AND THE PRINCIPLE OF GOOD FAITH: AN
INSIDE VIEW ON THE REFORM OF PRIVATE LAW OF KAZAKHSTAN
Kamal K. Sabirov
Venera T. Konussova
Marat A. Alenov
Introduction
Despite the fact that the legal system of the Republic of Kazakhstan is the part of the
Civil law, it was formed under the influence of the Soviet legal system and inherited many
elements from it. The private law of the Republic of Kazakhstan is much like Russian
private law. This is not surprising because both systems of private law are based on the
model code of the CIS countries and also had a common history of formation within the
framework of Soviet civil law. Nevertheless, more than 27 years have passed since the
collapse of the Soviet Union and the private law of the CIS countries has altered
appreciably (Akyn and Rakhymbai, 2017).
The reform of civil legislation has been ongoing for several years in the Russian
Federation. A number of legislative acts were adopted to amend the Civil Code of the
Russian Federation; in particular the obligation law was reformed. In the course of this
reform some legal institutions of common law were implemented.
The International Financial Center “Astana” has started functioning in the Republic of
Kazakhstan since 2018. The court of the International Financial Center relies on English
contract law, in this connection it can be stated that the process of implementation of
elements of common law into the legal system of the Republic of Kazakhstan is objective.
In connection with the beginning of the activity of the International Financial Center a
large-scale reform of the legislation on the implementation of certain provisions of English
and European law is under way. The participants of this reform are the authors of this
article. At present, the Ministry of Justice developed a draft Concept for the future bill,
which immediately aroused maximum discussion in the scientific and legal community
(Konussova and Nesterova, 2016).
The purpose of the reform of civil legislation in the Republic of Kazakhstan is the
modernization and development of private law. In this regard, it was necessary to
compare approaches to the regulation of similar institutions, understand the legal logic
and identify points of contact with it. And only on this basis to deny or to accept
innovations that common law brings to the development of continental law.
JANUS.NET, e-journal of International Relations
e-ISSN: 1647-7251
Vol. 10, Nº. 2 (November 2019-April 2020), pp. 141-151
Between freedom of contract and the principle of good faith:
an inside view on the reform of private law of Kazakhstan
Kamal K. Sabirov, Venera T. Konussova, Marat A. Alenov
143
Due to the fact that the civil legislation of the Republic of Kazakhstan and the Russian
Federation are largely similar, considerable attention was paid to the Russian experience.
But according to the respective Kazakh legal scientists, not all the ideas embodied in the
course of the reform of Russian private law can be considered as successful (Sulejmenov,
2016).
The reform of private law in the Russian Federation was confronted with conflicting
opinions between supporters of English contract law and adherents of the classical
German law school. Ultimately, during the reform an attempt to find a compromise, and
amendments of both sides were taken into account.
During the preparation of the draft law various issues were raised, including the
strengthening of the role of judicial practice, the development of the principle of good
faith and the principle of freedom of contract, the introduction of the concept of
"corporation" and legislative regulation of corporate relations, the development of holding
legislation, the implementation of individual institutions of contract law (estoppel,
liquidated damages, representations and warranties, indemnity clause, etc.). Thus, the
reform envisaged quite revolutionary changes in the current legislation, which logically
provoked resistance from conservative lawyers. In the end, some of the proposed
innovations of the project had to be abandoned.
Within the framework of this article, it is proposed to discuss one of the elements of the
reform of private law in the Republic of Kazakhstan, namely, the expansion of freedom
of contract and as a counterbalance the strengthening of the principle of good faith.
Generally, in contract law there are two fundamental principles coexisting: the principle
of freedom of contract and the principle of good faith in performance of the contract. And
if English law more attention is paid to the principle of freedom of contract, in continental
law the principle of good faith can be considered as a fundamental principle.
The freedom-of-contract doctrine implies that the parties of the contract have exactly
the same obligations as those provided in their contract. The principle of good faith
suggests that the parties of the contract have in front of each other a whole range of
other obligations that arise not from the contract but from the requirement to act in good
faith, as it is understood by this law and order. The principle of good faith can also exempt
a party from the performance of its contract obligations if this rule of law considers it fair
in this situation. Also, relying on the concerned principle the court can assign the
responsibilities to the party that were not prescribed in the contract. All this contradicts
the principle of freedom of the contract.
As a part of the ongoing reform of private law in Kazakhstan, there was an attempt to
find a compromise between the principle of good faith and freedom of contract.
Research Methods
We undertook an analysis of existing legal norms, as well as the content of research
materials of Kazakh, Russian, English, American and German specialists in the field of
private law with the purpose of comprehensive analysis of some issues of the reform of
private law of the Republic of Kazakhstan. During the research were used the works of
both Kazakh and foreign authors - representatives of the German and English law
JANUS.NET, e-journal of International Relations
e-ISSN: 1647-7251
Vol. 10, Nº. 2 (November 2019-April 2020), pp. 141-151
Between freedom of contract and the principle of good faith:
an inside view on the reform of private law of Kazakhstan
Kamal K. Sabirov, Venera T. Konussova, Marat A. Alenov
144
schools. The methodological basis of the study includes: system analysis, comparison,
theoretical and legal forecasting.
Main results and discussion
Expanding The Limits Of Freedom Of Contract
The historical roots of the principle of freedom of contract can be traced back to the
Roman law that gave great priority to the free expression of the will of a person and
denied any extraneous pressure. The principle of freedom of contract reached its peak in
the middle of the nineteenth century after that it began to increasingly restrict itself to
various legal orders.
In the United States freedom of contract is recognized as one of the constitutional rights
of a citizen. The Supreme Court confirmed the strengthening of this right in the case of
Frisbie v. United States, 157 U.S. 160 [1895] (Bernstein, D., 2008).
In general, we can distinguish three basic elements of freedom of contract: the freedom
to conclude a contract, the freedom to choose a contract and the freedom to determine
the content of the contract.
Here is how these elements are described in the comments to the Civil Code of the
Republic of Kazakhstan: "Any person, at his own discretion and under no coercion from
the outside, has the right: a) to decide whether to enter into or not to enter into a
contract; b) to elect a partner who wish to conclude a contract; c) to determine the terms
of the contract".
Controversial are the contracts which although not explicitly prohibited by law can be
considered unethical or immoral. For example such contracts are the contracts on
transplantation of human organs, which cause controversy among their supporters and
opponents (Trebilcock, 1993).
It is also necessary to touch on the issue of limiting the
principle of freedom of contract. There are separate cases of restriction of freedom of
contract even in English law. To such Craswell includes rules against liquated damages
and rules that prohibits the enforcement of promises unsupported by consideration
(Craswell, 1995).
The civil legislation of the Republic of Kazakhstan in paragraph 4 of Article 8 of the Civil
Code of the Republic of Kazakhstan establishes general requirements for the behavior of
citizens and legal entities. These evaluative concepts make it possible to establish general
limits of the contract, limiting the parties from abuse.
In addition, the operation of the principle of freedom of contract has certain exceptions,
assigned in legislative norms. Article 380 of the Civil Code of the Republic of Kazakhstan
prohibits compulsion to conclude a contract, while clarifying that this does not apply to
cases where the obligation to conclude a contract is provided for by the legislation or a
voluntarily accepted obligation.
The principle of freedom of contract plays a key role in the development of economy and
market relations. In the opinion of A. Didenko the contract serves as an instrument for
“democratization” of the economy and through it the society (Didenko, 2000). The
principle of freedom of contract is a logical continuation of the rights and freedoms
guaranteed by the Constitution of the Republic of Kazakhstan from this point of view.