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Article 390. Preliminary Agreement

as amended by (12) Law of No. 211 of 2nd March 1998 of the Republic of Kazakhstan. Concerning the Introduction of Amendments and Additions to the Civil Code of the Republic of Kazakhstan (General Part), and to the Decree of the Supreme Soviet of the Republic of Kazakhstan "Concerning the Implementation of the Civil Code of the Republic of Kazakhstan (General Part)".

1. In accordance with a preliminary agreement, the parties assume an obligation to conclude in the future an agreement on the transfer of assets, performance of work or rendering services (principal agreement) on the terms specified in the preliminary agreement.

2. A preliminary agreement shall be concluded in the form as established by legislation for the principal agreement, and if the pro-forma of the principal agreement is not established, then in writing. Failure to comply with rules for the pro-forma of the preliminary agreement shall entail its invalidity.

3. A preliminary agreement must contain the provisions which allow the identification of the subject-matter, and other material conditions of the principal agreement.

4. In a preliminary agreement the period shall be indicated within which the parties are obliged to conclude the principal agreement.

When such a period is not defined in the preliminary agreement, the agreement envisaged by it shall be subject to conclusion within one year from the moment of the conclusion of the preliminary agreement.

5. In the cases where one party which concluded a preliminary agreement evades the conclusion of the agreement which is envisaged thereby, it shall be obliged to compensate the other party for the losses incurred by that, unless it is otherwise stipulated in legislation or the agreement.

6. The obligations which are stipulated in the preliminary agreement shall terminate if prior to the expiry of the period within which the parties must conclude the principal agreement, it is not concluded, or none of the parties sends to the counter-party the proposal to conclude the agreement.

7. A letter of intent (agreement of intentions), unless it directly provides for the intent of the parties to impart to it the status of a preliminary agreement, shall not be deemed to be a civil law agreement and failure to execute it shall not entail any legal consequences.

Article 391. An Agreement for the Benefit of a Third Party

1. An agreement shall be recognised to be an agreement for the benefit of a third party, in which the parties established that the debtor shall be obliged to carry out the execution not to the creditor but to a third party who is indicated or not indicated in the agreement and who has the right to claim from the debtor the execution of the obligations for his benefit.

2. Unless it is otherwise stipulated in legislation or agreement, from the moment that the third party expressed to the debtor the intention to exercise its right in accordance with the agreement, the parties may not dissolve or amend without the consent of the third party the agreement concluded by them.

3. A debtor in an agreement shall have the right to make objections against the claim of a third party, which he may make against the creditor.

4. In the case where a third party waives a right which is granted to it in accordance with the agreement, the creditor may use that right, unless that contradicts legislation and the agreement.

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