In the legislation there is a term such as " invalidity of the transaction." The concept, types, conditions, consequences of its conclusion quite adequately describe the relevant norms. It should be noted that the presence of this definition in the law gives greater focus and acuteness to the efforts of the courts in the fight against unscrupulous parties to relations. Let us further consider the conditions for the invalidity of transactions (briefly).
Primary requirements
Considering the invalidity of the transaction, the concept, types, conditions, consequences of its conclusion, it is necessary to note a number of circumstances that are highlighted by judicial practice. In case of non-compliance with legal requirements, the contract may be declared null and void. These include:
- The capacity of the participants.
- Registration of the contract in the prescribed form.
- Voluntary expression of will.
- Compliance of the content with the legislation.
Let's consider them separately.
Legal capacity
For citizens, it comes from the age of 18, and in some cases earlier. The first condition for the invalidity of transactions is the fact of its conclusion by incapable persons. The legislation provides for one more reservation. So, according to Article 177 of the Civil Code, a transaction concluded by a legally competent entity that at the time of signing the contract did not give a report to its actions and did not lead them would be invalid. As for legal entities, their participation in agreements is determined by the content and nature of their special and basic legal capacity. In this case, the condition for the invalidity of transactions is the fact that they are in conflict with the goals established by the charter of the organization. This is stated in article 173 of the Code.
Non-compliance with the agreement form
This fact is included in the conditions of validity and invalidity of transactions with certain reservations. The specific form of agreement may be established by law or by the parties themselves. Normative regulation is carried out in accordance with Articles 165, 162 of the Code. If the legislation does not provide a direct indication of the invalidity of transactions in connection with non-compliance by participants with appropriate forms, they will be deprived of the right to refer to witness statements in case of disputes. However, they may provide written and other evidence.
Expression of will
It should form under normal conditions. Joining one or another relationship is considered as a volitional act. It is necessary to distinguish two components in it. The first is will (subjective side), the second is expression of will (objective aspect). Both of these elements are required. Only with their combination can we talk about freedom of contract. If any component is missing, talk about a vice of will. This circumstance is considered as a condition of invalidity of transactions .
conclusions
The main conditions for the invalidity of transactions are considered above . The general state of affairs is such that if at least one violation is made, the contract loses its force. Accordingly, the results that the participants in the relationship assumed were not achieved. Considering the invalidity of the transaction, the concept, types, conditions , it should be said that the law prohibits the execution of contracts that have lost force. Moreover, the rules provide for certain measures. They are aimed at preventing the existence of relations that do not comply with the law, affecting participants, eliminating the consequences of invalid transactions.
Return received
The conditions of validity and invalidity of transactions are of great practical importance. An agreement recognized as non-conforming to the requirements loses its force, as a rule, from the moment of conclusion. This means that everything that was received by it by each participant is subject to return, according to Art. 1102 and 1103 of the Code. Here it should be taken into account the special nature of each condition of invalidity of transactions. The grounds for returning the property are not the requirements of a vindication claim. They are precisely the violations that were committed at the conclusion of the contract. Claims for invalidation of agreements have a special nature, since only at the expense of them is restoration of rights or release from obligations or both. Of course, this will not be the only requirement in the statement. The lawsuit may also contain requests for the return of all that has been executed, recovery of moral damage, compensation for losses. Regardless of additional requirements, the conditions of invalidity of transactions will be of key importance. The provision of the legislation governing this issue does not take into account the moment of good faith.
Nuances
If there is any condition for the invalidity of transactions , the person who has saved or acquired the property must return it to the other side of the relationship. The corresponding requirement is established by Article 1103 of the Code. Meanwhile, it does not apply to all cases of invalidity. In a number of situations, everything received by the participants will be recovered in favor of the state. It is worth noting that in the literature they express different opinions on this matter. Most experts believe that such a penalty should be considered as confiscation. Other authors believe that it appears as a new legal phenomenon. Still others believe that the seizure of material assets can be equated to a fine. Meanwhile, the rules governing the concept, the terms of the invalidity of the transaction , do not contain an indication of the possibility of using confiscation as a measure of influence on participants. It has some similarities with the recovery in favor of the state. However, confiscation is applied in completely different cases and does not apply to the invalidity of transactions. This measure can be applied to any property. The penalty in favor of the state applies only to those values that were the subject of the agreement and only when at least one participant has fulfilled the obligations established in it.
Moment of termination
Considering the conditions of invalidity of transactions and their types, it is necessary to dwell separately on the peculiarities of the results of the contract losing its strength. As mentioned above, the relationship is considered terminated at the time of the conclusion of the relevant agreement. However, this rule is far from always valid, even if there are conditions for the invalidity of transactions. Void and contested transactions in some cases are recognized as invalid for the future. An example would be property rentals. It is worth saying that the terms of the invalidity of transactions in civil law can apply not only to the entire contract as a whole, but also to its separate part, if it is assumed that it would be signed without the inclusion of the corresponding clause. This is indicated by Article 180 of the Code. For example, a court may declare a will valid, except under the condition that a citizen is included in the number of heirs and does not meet the requirements of the law established for successors. This may be, say, the owner’s killer.
Property consequences
If the contract concluded in violation of legal requirements has not been executed, then it is simply canceled. If the obligations of the invalid transaction were partially or fully repaid, the problem of property consequences arises. Its decision depends on the circumstances under which the agreement has lost force, as well as the absence / presence of intent from the participants. The law provides for three property consequences:
- Bilateral restitution. It involves the return of the position of the parties to the transaction in its original state.
- Prevention of restitution. In such a situation, everything performed is withdrawn from both parties in favor of the state.
- Unilateral restitution. In this case, everything that was performed is returned to one participant, and everything is withdrawn from the other side in favor of the state.
Bilateral Restitution
In this case, the mutual return of everything executed under the transaction in kind is carried out. In some cases, this requirement cannot be implemented. In such situations, the value of the property is returned. As Article 167 of the Code in paragraph 2 indicates, bilateral restitution is applicable in all cases where conditions for the invalidity of transactions exist. In civil law, it is provided for contracts concluded:
- With the violation of the form.
- With non-compliance with the state registration procedure.
- Going beyond legal capacity or authority limitations.
- Incapable or partially incapable persons.
- Young people under 14 liters.
- Persons who are not able to realize their actions or manage their own behavior.
- Under the influence of error.
Participants return to their original position because the completed was obtained illegally. Bilateral restitution occurs when the application of fines to participants is not possible, as they both acted through negligence or innocently. In these cases, in the presence of any condition of invalidity of transactions, the Civil Code of the Russian Federation provides that those who have fulfilled their obligations can rely on the return of their property or compensation for its value.
Unilateral restitution
In this case, only one - conscientious - participant will receive his property. The other party cannot count on the return of the executed. If she did not repay her obligations, then what is to be fulfilled is exacted in state revenue. Unilateral restitution applies to contracts concluded:
- Under the influence of violence.
- Under the influence of deception.
- Under threat.
- Under the influence of a malicious agreement concluded by a representative of one participant with another.
- In difficult circumstances.
- For a purpose that does not correspond to the basics of morality and the rule of law, if only one participant was guilty.
If the obligation is settled by both parties, then the unscrupulous counterparty must return to the other everything received. Moreover, everything is withdrawn from him in favor of the state. If the unscrupulous counterparty fulfilled the obligations partially, and the innocent subject completely, the collection of the first shall be subject to all received as well as the outstanding part. If both parties have partially implemented the terms of the transaction, then the withdrawal to state revenue is carried out in an amount equivalent to that received from the second participant.
Restitution Restriction
Such a measure is provided for cases of recognition of the invalidity of a contract concluded for a purpose contrary to the foundations of morality and order. Having established the corresponding rule in Article 169 of the Code, the legislator was guided by the fact that the intention of the parties applies not only to the signing of the agreement, but also to its execution. Accordingly, if both participants acted with intent and both fulfilled their obligations, everything they received is transferred to the state. There are situations when one side has paid off obligations in full, and the other partly. In this case, everything received by the second participant is seized in favor of the state, and that which he still had to fulfill. If the property has been used and cannot be returned in kind, its value is compensated.
Difficulty in practice
Among the many problems, the key issue is the consequences of void contracts. It often happens that a thing transferred under such an agreement has already been sold to third parties. Accordingly, vindication in such a situation is impossible. The law in this case limits the restitution to monetary compensation. If the party that received the thing is insolvent, then the subject of the transaction will be lost. The shallow external effect of restitution, according to article 167 of the Code, lies in the fact that it does not concern subjective legal possibilities. The thing must be returned not because the person had any right to it, but because it was transferred. The result of these features is not only the high efficiency and effectiveness of restitution. Its property of preliminary protection also appears. For example, it is likely that the tenant has sold the thing he is using to a third party entity. Due to the fact that he did not have a right to it, according to the rules of restitution, this property is returned to him. Subsequently, the lessor may demand the return of the thing, as well as compensation for damages. From this we can conclude that the judicial practice interprets restitution in an expanded manner. But this approach cannot be called indisputable. This is due to a number of circumstances. This approach involves liability for a bona fide purchaser, and not for a person who violates the interests of the owner. This is inconsistent with the literal meaning of Article 167 of the Code, which says only about participants in a void transaction, and not about someone else.
Housing disputes
They also often have restitution problems. Housing disputes occur, as a rule, according to one scenario. The living space is alienated, then sold, exchanged, transferred by other means to third parties. If it is discovered that the transaction was illegal from the very beginning, then all subsequent ones will also become unlawful. This situation is quite common in practice. On the one hand, insignificance in itself means that the original owner should be automatically restored, regardless of the return of the premises. At the same time, a bona fide buyer is protected from vindication by virtue of the restriction provided for in article 302. The courts seem to be facing an insoluble question. Refusing to satisfy a vindication claim, they should recognize the right to retain housing for the illegal but bona fide owner. In the best case, the situation is resolved by reaching a compromise - the original owner of the premises is recognized as the owner, and the subjects who settled can get a legal opportunity to use the object or become tenants.
Economic disputes
Often the subject of the requirements is not recognition of the invalidity of the agreement, but the fact of nullity is revealed during the proceedings. Such disputes involving tax authorities are quite common. The Federal Tax Service, recognizing the nullity of joint venture agreements of commercial enterprises concluded for tax evasion, apply financial sanctions to the parties. In the process of appealing against the relevant acts, the plaintiffs are asked to apply bilateral restitution. As a result, counterparties return to their original position. This causes the disappearance of the object of taxation - the turnover of products, services or works. Consequently, the grounds for imposing tax sanctions are eliminated.
Additionally
Recently, the practice has become quite widespread when agreements are signed by deputy directors of executive structures of commercial enterprises or other officials, although they do not have the authority to do so. Often, the company’s seal is printed on the documents, and the decryption of the signature contains the name of the head. Contractors rarely raise the issue of their invalidity. As a rule, this argument is left in case of a dispute. Recognizing such an agreement invalid, the court should pay attention to the legal status of the entities that signed it. If they are indicated in the constituent documentation as bodies of a legal entity, then their actions are qualified under Article 174 of the Code. That is, they are considered as going beyond authority. If persons are not indicated in the executive structures of the company, then they must act in accordance with the power of attorney. If it is absent, the invalidity of the transaction is recognized on the basis of its conclusion by an unauthorized person. Often, the responsibility of the guilty participant is not significant in comparison with the benefit that he could have received upon conclusion of the agreement. Some experts suggest supplementing the legislation with an indication of the admissibility of imposing a fine on such a counterparty in the amount of the cost of the transaction executed by the other party.