The concept and grounds of invalidity of transactions

The transaction represents the actions of citizens and legal entities aimed at changing, establishing, terminating obligations and rights. When they are committed, as a rule, contracts are signed. Legislation has a number of requirements for such agreements. If they are not executed, the transactions may be declared invalid. Normative acts establish the circumstances in which this is allowed. Let us further consider the grounds for the invalidity of transactions provided for by the Civil Code of the Russian Federation .

Section 166

This norm establishes the types of grounds for invalidity of transactions :

1. By virtue of the recognition of the agreement as non-compliant with the law in court.
2. Regardless of the court decision.

In the first case, they talk about disputable, and in the second - about void transactions. As you can see, there are differences between them. First of all, they relate to the grounds of invalidity. A void transaction may be recognized as such primarily by virtue of the provisions of Ch. 9 of the Code. The norms in this chapter establish general rules. In addition, there are special grounds for the invalidity of transactions . They are fixed by the provisions of other articles of the Code, as well as other regulatory acts.

General grounds for invalidity of transactions

They are enshrined in various articles 9 of the chapter of the Code. So, article 169 as the basis for the invalidity of transactions calls their performance with a purpose contrary to the foundations of morality and the rule of law. Such agreements are also called antisocial. Fake and imaginary transactions are considered invalid. They are mentioned in article 170. The basis for the invalidity of transactions is also the execution of their persons recognized as legally incompetent due to mental illness. This circumstance is fixed in 171 articles. Three more grounds for invalidity of transactions are enshrined in norms 172, 162 and 165. They are the conclusion of an agreement:

1. In violation of the requirements for state registration (Art. 165 p. 1).
2. Minors under 14 years old. (172 articles).
3. With violation of the form, if its observance is mandatory by direct instruction in the law (clause 1 156 of the norm and clause 2, 3 of article 162).
   

Special cases

In the legislation, as mentioned above, special grounds for invalidity are also fixed. Transactions are considered void:

• Committed by a guardian who has not previously obtained the consent of the guardianship and guardianship authorities, without benefit to his ward, etc.
• Aimed at restricting the legal or legal capacity of a person.

Challenging Deals

Recognition of their invalidity is also carried out on general and special grounds. The first should include the conclusion of agreements:

1. A legal entity going beyond legal capacity.
2. Minors 14-18 years old.
3. Going beyond the authority to conclude an agreement.
4. A person limited in legal capacity by court order.
5. A citizen who is not able to understand the meaning of his behavior and lead it.

Separately, it should be said about three more grounds for the invalidity of transactions . The actions committed under the influence of:

1. Misconceptions.
2. Threats, violence, deceit, malicious agreement.
3. Severe life circumstances.

Special conditions for the recognition of invalidity of disputed transactions are provided for in federal laws. Examples are Federal Law No. 14 and Federal Law No. 208. In these regulatory acts, major transactions and related-party agreements are among the disputed ones. The Family Code also provides for the contestability of the actions of one of the spouses to dispose of common material values ​​without the consent of the second spouse.

Antisocial Agreements

Considering the concept and grounds for invalidity of transactions , it should be noted that all of them, to one degree or another, contradict moral standards and pose a danger to the rule of law. However, the legislation separately establishes the category of antisocial agreements. This need is probably due to the fact that in practice certain types of transactions can cause significant damage to public and state interests. Among them, for example, include the sale of military weapons related exclusively to the property of the country, unauthorized persons, actions aimed at the sale of narcotic compounds, and so on. By establishing inconsistency with moral standards and violation of the rule of law as grounds for the invalidity of transactions, the Civil Code of the Russian Federation emphasizes the seriousness of the danger they carry. The objective side of such agreements is formed, as a rule, by the criminal behavior of persons. Subjectively, such transactions involve indirect or direct intent. In some cases, both sides of the legal relationship act deliberately.

Imaginary agreements

The fact that there is no intention to create legal consequences acts as the basis for the invalidity of the transaction . A mock agreement is made “for the sake of sight”. It is not aimed at changing, establishing, the emergence of obligations and rights. Such transactions may be carried out for illegal purposes. For example, the parties agree to conclude an agreement on the alleged donation of property. The goal may be the desire to hide the object from foreclosure on it by a court decision. Parties may not pursue an unlawful purpose. However, in any case, if it is established that when concluding the agreement they did not mean the occurrence of legal consequences, this fact will be regarded as the basis of the invalidity of the transaction .

Fake Agreements

They differ from imaginary contracts in that they are aimed at covering another, as a rule, illegal transaction. A mock agreement is also issued for the species. However, it has a specific purpose - to cover up another contract. By virtue of this, it is recognized as null and void. The transaction that the participants in the legal relationship actually had in mind, the rules that are established by law for it apply. Moreover, it itself can be both valid and invalid.

Participation in an agreement by the legally incompetent

Particular attention should be paid to these grounds of invalidity of transactions . Agreements entered into by persons who were declared legally incompetent by the court are void due to the fact that these entities lack the ability to carry out independent, purposeful activities and evaluate its results. This category of agreements includes all contracts concluded by the legally incompetent. These include small household transactions. Meanwhile, the legislation contains one significant reservation. At the request of the guardian of a legally incapable person, a void transaction may be deemed valid if it is concluded to the benefit of that person. The corresponding provision is enshrined in Article 171 of the Code (paragraph 2). If at the time of conclusion of the agreement the subject was not recognized by the court as legally incapable, but due to his mental disorder he could not understand the meaning of his behavior and manage it, the contract on the guardian’s suit may be invalidated.

Transactions with minors under 14

As a general rule, such agreements are considered null and void. The exception is transactions stipulated in Article 28 of the Code (clause 2). Children are not fully able to independently and purposefully evaluate their behavior and its results. Meanwhile, at the request of legal representatives, the agreement may be deemed valid if it is concluded to the benefit of the child. Of course, transactions made by persons under six years of age on their own will be void. This is due to the fact that such children cannot be recognized even with limited legal capacity.

Shape disorder

As mentioned above, such a ground for invalidity of transactions of the Civil Code can be applied only in the case of a direct indication in the legislation. The nullity of the agreement in such situations is determined by the fact that it was not given a proper form from the point of view of law, which allows one to correctly perceive the will of the subject and consider this form to be legal.

Registration Failure

In some cases, even if there are no violations in the form of a transaction, it can be declared invalid if the state registration procedure is not followed. The most striking example is the contract of sale of real estate. To transfer ownership, such an agreement must go through state registration. Failure to comply with the procedure entails a defective legal composition, the completeness of which is necessary for the occurrence of legal consequences that are acceptable by the norms and desired by the participants in the legal relationship.

Grounds for the invalidity of the disputed transaction

In practice, a lot of agreements are concluded by legal entities beyond their legal capacity. This category of contracts is divided into the following independent types:

1. Contracts executed by a person in contradiction with the objectives of activity established by the constituent documentation. For example, it may be a trade agreement concluded by an insurance company or a commercial bank.
2. Transactions made by a person who does not have a license to conduct relevant activities.

A permit shall be considered absent if:

• it is withdrawn by the authorized structure that issued it;
• not received;
• its term has expired;
• the amount of rights enshrined in the permit is exceeded.

Go beyond authority

The viability of transactions in such cases is recognized subject to a number of conditions. First of all, the powers should be clearly limited by the contract or constituent documents in comparison with how they are established in the legislation, powers of attorney, or how they will become obvious based on the situation. Secondly, a legal entity or a citizen, concluding an agreement, must go beyond the limits indicated above. Thirdly, the second participant in the legal relationship knew or should have known about the established limits of authority.

Agreements concluded under the influence of fraud

They are disputed because one participant is deliberately misled before the achievement of a goal beneficial to the second participant (deceiving). Such actions may be performed by a counterparty or a third party. At the same time, the latter can act in legal relations both on behalf of the counterparty and independently. For the recognition of invalidity it does not matter how the deception is committed. It can be, for example, active and expressed in the intentional message of false information. Fraud is also considered non-reporting of information significant to the second party. In addition, the recognition / invalidity of such transactions does not take into account the presence / absence of selfish goals, as well as holding the deceiver liable for fraud.

Effects

The legislation enshrines both the grounds and consequences of the invalidity of the transaction . The basic rules are established by 167 articles of the Code. The norm states that invalid agreements do not give rise to legal consequences, except for those related to its illegality. A party to the contract that knew or could know about its non-compliance with the rules of law is considered an unscrupulous participant. As a general rule, if a transaction is recognized as invalid, each party must return to the other everything received by agreement. In some cases, however, the implementation of this requirement is not possible for objective reasons. For example, property is damaged, destroyed, etc. In such situations, the law provides for the possibility of the injured party to demand compensation for material values, unless otherwise provided by norms. If it follows from the essence of the agreement that it can only be terminated for a future period, the court, recognizing the invalidity of the transaction, terminates its effect, respectively, for the future. Clause 4 167 of the Article of the Code contains a clause of particular practical importance. The norm states that the court may not apply the consequences of a transaction deemed invalid if it is not consistent with the foundations of law and order or morality. Of course, the corresponding decision should be motivated. For this, the court is obliged to comprehensively study the circumstances of the case, the conditions in which the agreement was concluded and many other significant factors.