According to civil law, an enslaving transaction is an extremely unprofitable agreement for one of the parties, infringing on its rights and imposed on it under circumstances that precluded free expression of will. Article 179 of the Civil Code of Russia notes that such a transaction, as a rule, is concluded under the influence of violence, deception, threat, malicious conspiracy of representatives of one party and other difficult circumstances. At the same time, at the suit of the victim, the court may declare the bonded transaction invalid.
Describing the concept of “bonded deal”, jurists distinguish its following features:
- the victim forcedly made a transaction as a result of a combination of difficult circumstances;
- the other party to the transaction was well aware of the circumstances of the victim and tried to use them to obtain their own benefit;
- the terms of the transaction are extremely unfavorable for the victim.
Only in the presence of the indicated features can a casual transaction be challenged in court. In fact, the victim, when filing a lawsuit, needs to prove the presence of 3 of the above circumstances in a particular transaction. Practice, in turn, shows that positive decisions on these claims are a rarity. If the extreme disadvantage of this or that agreement for one of the parties is connected with its illiteracy, lack of information, or even a manifestation of generosity, then such a deal can no longer be challenged. The concept of “bonded transaction” includes fraudulent transactions. It is also worth noting that Russian law provides for criminal liability in case of coercion to complete a certain transaction or to refuse it under the threat of violence or damage to other people's property. This includes the dissemination of information that is harmful to the rights and interests of both the victim and his family.
But in judicial practice, a single position on the application of Art. 179 describing enslaving transactions. The following questions constantly arise before lawyers:
- What circumstances can be considered difficult in the context of this article (insolvency, serious illness, etc.)?
- What are the criteria for the disadvantage of certain transaction conditions?
- What signs indicate dishonesty of the other side?
The most common example of a bonded transaction is the sale of land or a house for debt. In addition, quite often a bonded transaction provides for extremely high interest on the use of funds. If the transaction was deemed enslaving, then the other party returns to the victim all that she received as a result of the transaction. In the event that the received cannot be returned in kind, its value is reimbursed in money. Despite the fact that bonded transactions are made quite often, Art. 179 is relatively rarely used in practice. In most cases, victims regain their rights in criminal proceedings, which greatly simplifies the resolution of the dispute. Under other circumstances, it is not always easy to find grounds for invalidating the agreement.