The consequences of declaring the transaction invalid, the Civil Code of the Russian Federation indicates in article No. 167. The result depends on many factors that the law proposes to pay attention to. First of all, it remains to be understood: from what the invalidity occurred, what reasons made it possible to recognize the material relations of the entities as not held. Failure to comply with legislative norms when concluding an agreement, violation of the interests of one participant or other persons - this is only part of the violations from the list with various cases of neglect of the law, entailing the consequences of invalidating the transaction under the Civil Code of the Russian Federation.
The meaning of the term
A transaction should be understood as the commission of actions by persons in order to establish, amend or terminate civil rights and obligations. Any relationship in society, economic relations can be considered transactions, from the purchase of a thing in a store to the conclusion of an agreement on the supply of equipment between large corporations.
The implementation of serious events is recorded in a written agreement under which participants affix their signatures. The acquisition of retail products is proved by payment documents. When the parties do not achieve the result to which they sought, since unfavorable circumstances have arisen for them, the events may be deemed legally invalid. The consequences of declaring the transaction invalid, the Civil Code of the Russian Federation emphasizes, affects the level of violated legislative requirements.
Conclusion procedure
Citizens' actions are mainly driven by circumstances, the environment in which they have to live. Subjects of various levels fix their mutual relations on the provision of services and financial transactions with an agreement.
For the transaction to take legal force, the following conditions are necessary:
- the form required by law has been complied with;
- the conclusion was carried out by competent entities;
- the content does not contradict the law;
- voluntary without coercion of the will of the participants.
The absence of the above requirements is accompanied by the consequences of invalidating the transaction - the Civil Code of the Russian Federation, article 167, as amended by the Federal Law No. 100. This means that the actions were committed in violation of the legislative norms provided for in the state.
At what point does the contract acquire legal invalidity?
The time period from which the agreement can be canceled has legal significance. The legislative act in part 1 of article 167 states: recognition of the transaction as invalid and the application of the consequences may occur from the moment of signing the contract. In practice, this does not always happen, it all depends on the content of the agreement and is executed after a certain time. Suppose citizens rented a home, you can’t immediately recognize that their transaction was obviously illegal. They used the living quarters, and the termination of the relationship will come in the future.
The Civil Code of the Russian Federation in the new version of Article 179 states that when a transaction is declared invalid, as a result, for example, a lawsuit sets in, during which the deadlines for suspension of the contract are set.
For this, documented circumstances are collected and a lawsuit is filed:
- the signing of the contract is committed with violence and threats;
- cheating was used;
- the party took advantage of the unfavorable conditions of the partner.
In any case, good reason is needed to determine the guilty party. It is required to prove that he committed the violation of the law intentionally, knew about the fraud or assisted in concluding a criminal agreement. Recognition of a transaction as invalid and application of consequences shall be considered in court.
Reasons for recognition
No one appeals to the court with unfounded allegations; such a lawsuit is still wrapped up in the judicial office. Such facts should be confirmed, and they will serve as the basis:
- violated legal requirements during the execution or execution of the contract;
- imaginary, pretense is established;
- incapacitated persons are involved;
- parties to the contract are minor citizens;
- financial transactions with specific property are prohibited;
- the signing of the agreement was carried out in violation of the law.
The presence in the pending claim of at least one reason from the entire list will entail the consequences of declaring the contract an invalid transaction.
Types of fictitious arrangements
The relationship between citizens has its own varieties, they are classified according to homogeneous attributes. Legally invalid agreements differ in the categories in which they are recognized as such by a legal act:
- disputable - by a court decision;
- void - regardless of the decision of the court, the consequences of invalidating the void transaction.
There is another type of relationship when, when signing an agreement, actions go into the category of relative invalidity. These are just the previously described cases, which depend on the receipt of the claim and its satisfaction. Proceedings in court begin after the appeal of an interested person because of his coercion to an agreement - on error, violence (Civil Code, Article No. 178, No. 179). The decision of the legal authority will indicate the consequences and recognition of the contract as an invalid transaction.
The way out of the situation proposed by law
What result will result in the unlawful signing of the agreement depends on the following criteria:
- recognition period;
- the impact of violations on legislative provisions, the rule of law, morality;
- determining profit or loss from partners.
Consequences of a court declaring a transaction invalid:
- if the execution is not completed, the agreement is canceled;
- full or partial fulfillment of obligations under a unilateral or bilateral agreement requires restitution - unilateral, mutual or to prevent this procedure.
- payment of damage to the party to which it is caused.
If the parties entered into an agreement and did not give it a move, there will be no consequences from recognizing the transaction as invalid under the Civil Code. It is canceled and no additional paperwork is required. In the performance of obligations under unlawful agreements, a loss return is due.
The notion of mutual restitution
This term should be understood as the return of items that are transferred unlawfully to possession. Mutual return occurs to each side on its merits. What the parties received as a result of the agreement, this property passes back to its owners. If there are no objects at the time:
- sold out;
- Lost
- destroyed;
- donated.
The law allows you to replace in-kind elements with monetary compensation to the participant who suffered a loss as a result.
Suppose a car was sold, the buyer got rid of it in any acceptable way. The consequence of the recognition of the disputed transaction will be invalid: payment by the purchaser of compensation at the market value for the car. It is believed that everything is executed according to the law, even with its partial application. If the vehicle is unscathed, it is returned to the owner, who also gives the money back.
What happens with unilateral restitution?
The contract is considered to be committed in violation of the law if it was concluded by fraudulent means. In this case, the consequences of declaring the transaction invalid will be assigned, and restitution will be one-sided.
The violator is obliged on the basis of a court decision to recover costs, return illegally obtained property or compensate for damage. An example is the case from judicial practice. Citizen at a respectable age returned home ownership. Relatives were able to prove that the gift of the nurse framed under threats.
In what cases does failure occur?
The consequences of declaring the transaction invalid include the right of the court to refuse restitution. The situation is controversial, since production is accompanied by a legal concept - a contradiction with the rule of law and morality from the evaluation category.
A similar procedure is used with criminal transactions in the sale of prohibited materials. Income derived from the sale of weapons and drugs is seized, if there is not enough money, the offender must pay the debt.
Consequences of declaring a transaction invalid in bankruptcy
Judicial practice shows that during the consideration of cases, judges try to maintain the contractual conditions, not to cancel the agreement. Officials take such a step if the challenge is bankruptcy. The situation with the ruin of debtors is not unambiguous. Federal Law No. 127 on Insolvency, adopted on 10/01/2015, is still in force and is in high demand. Such financial agreements are special and require additional reasons to be declared invalid. They were divided for reasons:
- suspicious
- with preference.
Bankruptcy proceedings take a long time, while debt is growing. During this period, the borrower can get rid of the property that will be sold. He rewrites a car or a summer cottage to relatives, he will not take away his only housing to pay off his debt to the bank.
The consequences of declaring the transactions invalid is the attachment of the seized property to the bankruptcy estate . When in-kind purchase cannot be returned, reimburse at its value in cash. Take into account its price at the time of purchase, and what losses were formed due to changes in value. The financial manager will not search for new owners if there has been a re-registration for a close relative or acquaintance. The rights of buyers are protected by the Civil Code of the Russian Federation, as described in article No. 302. The debtor will have to return the money at the market value of transport or real estate.
Which transactions are suspicious?
Article 61.2 of Federal Law No. 127 is fully devoted to suspicious transactions and methods of contesting them. Such actions include any financial transactions conducted after filing an application with the arbitration tribunal or the year before, when applying for bankruptcy. An analysis will be conducted by the financial manager to establish the circumstances:
- under what conditions the sale was conducted, relative to market prices;
- the cost of similar facilities;
- difference between prices.
Only the size of the money matters in this study. The specialist will not find out the participation of persons and their interest, since the fact of sale and purchase is recorded. It is the duty of the manager to challenge the actions taken; if such a proposal comes from creditors, he may be punished with penalties.
In what order do they dispute?
A presentation on recognition of a financial transaction as unlawful by a borrower does not occur in a separate lawsuit, but during a bankruptcy proceeding. For evaluation by the court, it is necessary to submit an application drawn up in accordance with the general requirements that the proceedings make. It is necessary to inform the creditor about the procedure, send a notification by postal order, copies of the documentation with the application and attachments. They file a petition with the same agency that is considering the bankruptcy case.
For the right to apply:
- external and bankruptcy trustees at the request of the participants in the process, on their own initiative or application from the lenders, the counterparties themselves can not participate in this matter;
- persons authorized by creditors if the managers do not take appropriate action;
- bankruptcy creditors with claims exceeding 10% of the total debts.
All individuals are entitled to appeal if their interest is affected.
The grounds for protest are standard, as in other cases for recognition of invalidity:
- violated laws and regulations;
- contradictions with law and morality;
- incompetence of subjects.
For some time now, an item has been added to this list, attributing to abuse the illegality of the petition to appeal the transaction. This is possible with selfish intentions to prevent the recognition of bankruptcy.
There are still grounds for appeal against sales during the insolvency procedure, which are considered special:
- For unequal counter-performance, in the process they justify the assessment of alienated or acquired things, financial actions can dispute during the period of consideration of the reasons for the ruin or within 12 months before submitting the application.
- Deliberate harm to creditors.
- Determination of preferences between financial institutions.
In this case, consider the transaction:
- changed the order of making debts;
- with interim measures for individual lenders;
- in case of early repayment of debts.
An appeal on these grounds may begin during the bankruptcy process, a month or six months before it. Provided that the counterparty was aware of the ruin of the borrower.
It should be noted that not all actions are recognized as not legal.
These include:
- agreements concluded to fulfill obligations;
- Transactions completed for ordinary households — rent or utility bills.
The court may not recognize the transaction as invalid if the debtor sold the property at a higher price than he owed to the institutions and paid off his creditors.
Case Study
The pensioner filed an application with the Arbitration Court for declaring her bankrupt. Before the trial, she designed her car of domestic production on her son, as sold for 50,000 rubles. The manager made inquiries to the relevant authorities about the availability of property, withdrew all available bank cards - the procedure went through all the legislative norms. During the trial, the judge checked the documents. The question was asked: were there transactions equal or higher than 300,000 rubles? There really were no such sales and purchases.
The manager explained the sale of the machine to the judge, as the funds needed and spent on legal expenses. The pensioner was granted a petition; she was declared bankrupt. As a result, all debts to banks were written off. This is a special case and it is not worth hoping for court loyalty.
There are other examples when the re-registration of property becomes a fictitious transaction, since the procedure is performed by an interested person. No matter where the car is located, regardless of its condition and the number indicated in the contract of sale, the court will demand that a commercial amount be paid for the vehicle. The determination of market value will be entrusted to an independent appraiser. An unlucky borrower can lose not only money for illegal sale, but also get penalties.