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Subsection 4. TRANSACTIONS. DECISIONS OF MEETINGS. REPRESENTATION

Chapter 9. TRANSACTIONS

§ 2. Invalidity of transactions

Article 166. Voidable and void transactions

1. A transaction is invalid on the grounds established by law, due to its recognition as such by the court (voidable transaction) or regardless of such recognition (void transaction).

2. A demand to recognize a voidable transaction as invalid may be submitted by a party to the transaction or by another person specified in the law.

A contestable transaction may be declared invalid if it violates the rights or legally protected interests of the person challenging the transaction, including if it entails unfavorable consequences for him.

In cases where, in accordance with the law, a transaction is contested in the interests of third parties, it may be declared invalid if it violates the rights or legally protected interests of such third parties.

A party whose behavior demonstrates its will to maintain the validity of the transaction does not have the right to challenge the transaction on grounds that this party knew or should have known about when its will was expressed.

3. A party to the transaction, and in cases provided for by law, also another person, has the right to submit a demand for the application of the consequences of the invalidity of a void transaction.

The requirement to recognize a void transaction as invalid, regardless of the application of the consequences of its invalidity, can be satisfied if the person making such a demand has a legally protected interest in recognizing this transaction as invalid.

4. The court has the right to apply the consequences of the invalidity of a void transaction on its own initiative, if this is necessary to protect public interests, and in other cases provided for by law.

5. A statement about the invalidity of a transaction has no legal significance if the person referring to the invalidity of the transaction acts in bad faith, in particular if his behavior after the conclusion of the transaction gave grounds for other persons to rely on the validity of the transaction.

Article 167. General provisions on the consequences of invalidity of a transaction

1. An invalid transaction does not entail legal consequences, except for those related to its invalidity, and is invalid from the moment of its completion.

A person who knew or should have known about the grounds for the invalidity of a contested transaction, after the recognition of this transaction as invalid, is not considered to have acted in good faith.

2. If the transaction is invalid, each party is obliged to return to the other everything received under the transaction, and if it is impossible to return what was received in kind (including when the received is expressed in the use of property, work performed or service provided), reimburse its value, if there are other consequences of the invalidity of the transaction not provided for by law.

3. If it follows from the essence of a voidable transaction that it can only be terminated for the future, the court, declaring the transaction invalid, terminates its validity for the future.

4. The court has the right not to apply the consequences of invalidity of a transaction (clause 2 of this article) if their application would contradict the fundamentals of legal order or morality.

Article 168. Invalidity of a transaction that violates the requirements of the law or other legal act

1. Except for the cases provided for in paragraph 2 of this article or other law, a transaction that violates the requirements of a law or other legal act is voidable, unless it follows from the law that other consequences of the violation not related to the invalidity of the transaction should be applied.

2. A transaction that violates the requirements of a law or other legal act and at the same time encroaches on public interests or the rights and legally protected interests of third parties is void unless it follows from the law that such a transaction is contestable or other consequences of the violation not related to the invalidity of the transaction must be applied.

Article 169. Invalidity of a transaction made for a purpose contrary to the foundations of law and order or morality

A transaction made for a purpose that is obviously contrary to the foundations of law and order or morality is void and entails the consequences established by Article 167 of this Code. In cases provided for by law, the court may recover to the income of the Russian Federation everything received under such a transaction by the parties who acted intentionally, or apply other consequences established by law.

Article 170. Invalidity of imaginary and feigned transactions

1. An imaginary transaction, that is, a transaction made only for show, without the intention of creating legal consequences corresponding to it, is void.

2. A sham transaction, that is, a transaction that was made to cover up another transaction, including a transaction on different terms, is void. To a transaction that the parties actually intended, taking into account the essence and content of the transaction, the rules relating to it are applied.

Article 171. Invalidity of a transaction made by a citizen declared incompetent

1. A transaction made by a citizen declared incompetent due to a mental disorder is void.

Each party to such a transaction is obliged to return to the other everything received in kind, and if it is impossible to return what was received in kind, to reimburse its cost.

The capable party is obliged, in addition, to compensate the other party for the actual damage it has suffered if the capable party knew or should have known about the incapacity of the other party.

2. In the interests of a citizen declared incompetent due to a mental disorder, a transaction he has made may, at the request of his guardian, be recognized by the court as valid if it was made for the benefit of this citizen.

Article 172. Invalidity of a transaction made by a minor under fourteen years of age

1. A transaction made by a minor under fourteen years of age (minor) is void. The rules provided for in paragraphs two and three of paragraph 1 of Article 171 of this Code apply to such a transaction.

2. In the interests of a minor, a transaction made by him may, at the request of his parents, adoptive parents or guardian, be recognized by the court as valid if it was made for the benefit of the minor.

3. The rules of this article do not apply to small household and other transactions of minors, which they have the right to carry out independently in accordance with Article 28 of this Code.

Article 173. Invalidity of a transaction of a legal entity made in conflict with the goals of its activities

A transaction made by a legal entity in conflict with the goals of its activities, which are definitely limited in its constituent documents, may be declared invalid by the court at the request of this legal entity, its founder (participant) or another person in whose interests the restriction is established, if it is proven that the other party the transaction knew or should have known about such a restriction.

Article 173.1. Invalidity of a transaction made without the consent of a third party, a body of a legal entity or a state body or local government body required by law

1. A transaction made without the consent of a third party, a body of a legal entity or a state body or local government body, the need to obtain which is provided for by law, is voidable, unless it follows from the law that it is void or does not entail legal consequences for the person authorized to give consent, if absence of such consent. It may be declared invalid at the request of such a person or other persons specified in the law.

The law or, in the cases provided for by it, an agreement with the person whose consent is required to complete a transaction may establish other consequences of the absence of the necessary consent to complete a transaction than its invalidity.

2. Unless otherwise established by law, a voidable transaction made without the legally required consent of a third party, a body of a legal entity or a state body or local government body may be declared invalid if it is proven that the other party to the transaction knew or should have known about the absence of the moment of completion of the transaction with the necessary consent of such person or such body.

3. A person who has given the consent required by law to carry out a voidable transaction does not have the right to challenge it on grounds that this person knew or should have known at the time of expressing consent.

Article 174. Consequences of violation by a representative or body of a legal entity of the conditions for the exercise of powers or interests of the represented or interests of the legal entity

1. If the powers of a person to carry out a transaction are limited by an agreement or regulation on a branch or representative office of a legal entity, or the powers of a body of a legal entity acting on behalf of a legal entity without a power of attorney are limited by the constituent documents of the legal entity or other documents regulating its activities in comparison with how they are defined in the power of attorney, in the law or as they may be considered obvious from the situation in which the transaction is made, and in its execution such a person or such body went beyond the limits of these restrictions, the transaction may be declared invalid by the court at the claim of the person in whose interests the restrictions are established only in cases when it is proven that the other party to the transaction knew or should have known about these restrictions.

2. A transaction made by a representative or acting on behalf of a legal entity without a power of attorney by a body of the legal entity to the detriment of the interests of the represented or the interests of the legal entity may be declared invalid by the court at the claim of the represented or at the claim of the legal entity, and in cases provided for by law, at the claim brought in their interests by another person or other body, if the other party to the transaction knew or should have known about obvious damage to the represented or to the legal entity or there were circumstances that indicated collusion or other joint actions of the representative or body of the legal entity and the other party to the transaction in damage to the interests of the represented person or the interests of a legal entity.

Article 174.1. Consequences of a transaction in relation to property, the disposal of which is prohibited or limited

1. A transaction made in violation of the prohibition or restriction on the disposal of property arising from the law, in particular from the legislation on insolvency (bankruptcy), is void to the extent that it provides for the disposal of such property (Article 180).

2. A transaction made in violation of the ban on the disposal of the debtor’s property, imposed in court or in another manner established by law in favor of his creditor or other authorized person, does not interfere with the exercise of the rights of the said creditor or other authorized person, which were secured by the ban, except in cases where the acquirer of the property did not know and should not have known about the ban.

Article 175. Invalidity of a transaction made by a minor aged fourteen to eighteen years

1. A transaction made by a minor aged fourteen to eighteen years without the consent of his parents, adoptive parents or guardian, in cases where such consent is required in accordance with Article 26 of this Code, may be declared invalid by the court at the claim of the parents, adoptive parents or guardian.

2. The rules of this article do not apply to transactions of minors who have become fully capable.

Article 176. Invalidity of a transaction made by a citizen whose legal capacity has been limited by a court

1. A transaction to dispose of property made without the consent of the trustee by a citizen whose legal capacity is limited by the court (Article 30) may be declared invalid by the court at the suit of the trustee.

If such a transaction is declared invalid, the rules provided for in paragraphs two and three of paragraph 1 of Article 171 of this Code are applied accordingly.

2. The rules of this article do not apply to transactions that a citizen with limited legal capacity has the right to carry out independently in accordance with Article 30 of this Code.

Article 177. Invalidity of a transaction made by a citizen incapable of understanding the meaning of his actions or managing them

1. A transaction made by a citizen, although legally capable, was at the time of its completion in such a state where he was not able to understand the meaning of his actions or manage them, may be declared invalid by the court at the claim of this citizen or other persons whose rights are protected by law interests are violated as a result of its commission.

2. A transaction made by a citizen who was subsequently declared incompetent may be declared invalid by the court at the request of his guardian if it is proven that at the time of the transaction the citizen was not able to understand the meaning of his actions or manage them.

A transaction made by a citizen who is subsequently limited in legal capacity due to a mental disorder may be declared invalid by the court at the request of his trustee if it is proven that at the time of the transaction the citizen was not able to understand the meaning of his actions or manage them and the other party to the transaction knew or should have know about it.

3. If a transaction is declared invalid on the basis of this article, the rules provided for in paragraphs two and three of paragraph 1 of Article 171 of this Code are applied accordingly.

Article 178. Invalidity of a transaction made under the influence of a material misconception

1. A transaction made under the influence of a mistake may be declared invalid by the court at the request of the party acting under the influence of the mistake, if the mistake was so significant that this party, having reasonably and objectively assessed the situation, would not have completed the transaction if it had known about the actual state of affairs.

2. If the conditions provided for in paragraph 1 of this article are met, the error is assumed to be sufficiently significant, in particular if:

1) the party made an obvious reservation, typo, typo, etc.;

2) the party is mistaken regarding the subject of the transaction, in particular those of its qualities that are considered essential in circulation;

3) the party is mistaken regarding the nature of the transaction;

4) the party is mistaken regarding the person with whom he enters into a transaction or a person associated with the transaction;

5) a party is mistaken regarding a circumstance that it mentions in its expression of will or from the presence of which it is obvious to the other party when making a transaction.

3. Misconception regarding the motives for the transaction is not sufficiently significant to invalidate the transaction.

4. A transaction cannot be declared invalid on the grounds provided for in this article if the other party agrees to maintain the validity of the transaction on the conditions that the party acting under the influence of a mistake assumed. In this case, the court, refusing to recognize the transaction as invalid, indicates these terms of the transaction in its decision.

5. The court may refuse to recognize a transaction as invalid if the error under the influence of which the party to the transaction acted was such that it could not be recognized by a person acting with ordinary prudence and taking into account the content of the transaction, accompanying circumstances and characteristics of the parties.

6. If a transaction is declared invalid as made under the influence of a mistake, the rules provided for in Article 167 of this Code are applied to it.

The party on whose claim the transaction is declared invalid is obliged to compensate the other party for the actual damage caused to it as a result, except for cases where the other party knew or should have known about the existence of a mistake, including if the mistake arose as a result of circumstances depending on it.

The party on whose claim the transaction is declared invalid has the right to demand from the other party compensation for losses caused to it if it proves that the error arose as a result of circumstances for which the other party is responsible.

Article 179. Invalidity of a transaction made under the influence of deception, violence, threat or unfavorable circumstances

1. A transaction made under the influence of violence or threat may be declared invalid by the court at the request of the victim.

2. A transaction made under the influence of deception may be declared invalid by the court at the request of the victim.

Deliberate silence about circumstances that a person should have reported with the conscientiousness required of him under the terms of the transaction is also considered deception.

A transaction made under the influence of deception of the victim by a third party may be declared invalid at the request of the victim, provided that the other party or the person to whom the unilateral transaction was addressed knew or should have known about the deception. It is considered, in particular, that a party knew about the deception if the third party guilty of deception was its representative or employee or assisted it in completing the transaction.

3. A transaction on extremely unfavorable terms, which a person was forced to make as a result of a combination of difficult circumstances, which the other party took advantage of (a enslaving transaction), may be declared invalid by the court at the request of the victim.

4. If a transaction is declared invalid on one of the grounds specified in paragraphs 1 - 3 of this article, the consequences of invalidity of the transaction established by Article 167 of this Code shall apply. In addition, losses caused to the victim are compensated by the other party.

The risk of accidental destruction of the subject of the transaction is borne by the other party to the transaction.

Article 180. Consequences of invalidity of part of the transaction

The invalidity of a part of a transaction does not entail the invalidity of its other parts, if it can be assumed that the transaction would have been completed without the inclusion of its invalid part.

Article 181. Limitation periods for invalid transactions

1. The limitation period for claims to apply the consequences of the invalidity of a void transaction and to declare such a transaction invalid (clause 3 of Article 166) is three years.

The limitation period for these claims begins from the day when the execution of a void transaction began, and in the event of a claim being brought by a person who is not a party to the transaction, from the day when this person learned or should have known about the beginning of its execution. In this case, the limitation period for a person who is not a party to the transaction, in any case, cannot exceed ten years from the date of commencement of execution of the transaction.

2. The limitation period for a claim to declare a voidable transaction invalid and to apply the consequences of its invalidity is one year. The limitation period for the said claim begins from the day the violence or threat under the influence of which the transaction was concluded ceased (clause 1 of Article 179), or from the day when the plaintiff learned or should have learned about other circumstances that are the basis for declaring the transaction invalid.

Civil Code of the Russian Federation. Table of contents:

Recognition of transactions as invalid is associated with the elimination of those property consequences that arose as a result of their execution. The general rule is to return the parties to the property position that existed before the execution of the invalid transaction. Each party is obliged to return to the other party everything received under the invalid transaction. This return of the parties to their original position is called bilateral restitution. If it is impossible to return what has been performed in kind, as, for example, in the case of using a thing, performing work, providing services, or destruction or loss of a thing, then the party is obliged to compensate the cost of the lost thing, work, services or rent, i.e. replace what was performed in kind with monetary compensation (Article 167 of the Civil Code).

In some cases, the law provides for a sanction for the commission of an invalid transaction in the form of recovery of the income received by the state. This sanction applies only to the guilty party who deliberately commits an invalid transaction, while the injured party receives back everything received by the guilty party or is awarded compensation if it is impossible to return it in kind. Such a sanction is provided for the guilty party for completing a transaction under the influence of deception, violence, threat, malicious agreement between a representative of one party and the other, or a combination of difficult circumstances (clause 2 of Article 179 of the Civil Code). If both parties are guilty of committing an illegal transaction for a purpose that is obviously contrary to the foundations of law and order or morality, then everything received by the parties or due for execution is recovered as the income of the Russian Federation. If only one party acted guilty, then the guilty party is obliged to compensate the other party for everything received under the transaction, and what is due to the guilty party is collected as state income (Article 169 of the Civil Code).

Along with the general consequences of the invalidity of transactions, special ones are also applied in the form of imposing an obligation to compensate for damage incurred by one of the parties as a result of the conclusion and execution of an invalid transaction. This sanction can be considered as a measure of civil liability. Only real damage is subject to compensation, i.e. only disparagement in property and expenses actually incurred by the party. Such consequences are provided for the party who entered into a transaction with an incompetent person if she knew or should have known about the incapacity (clauses 2, 3, Article 171 of the Civil Code). This rule applies to transactions made with citizens under or over 14 years of age who have limited legal capacity or are unable to understand the meaning of the actions they perform or manage them.

In transactions in which a sanction is provided for the guilty party in the form of recovery of the state's income, an additional consequence is compensation to the victim for actual damage.

In transactions made under the influence of a mistake, additional consequences are applied to the party through whose fault the mistake arose. She is obligated to compensate for actual damages. If the error arose through the fault of the erring party itself, or due to circumstances beyond its control, then the erring party is obliged to compensate for real damage to the other party, which the latter could have suffered as a result of the recognition of the concluded transaction as invalid (clause 2 of Article 178 of the Civil Code).

The legislator considered it necessary in a number of cases to specifically highlight the negative consequences for the party of certain transactions, which can also be considered violating the principles of morality. These include transactions made under the influence of deception, threat, violence, malicious agreement between a representative of one party and the other party, or enslaving transactions. All of them, like those discussed in Art. 169 of the Civil Code are recognized as invalid and entail the transfer of property to the income of the Russian Federation as a sanction. However, the preservation of this type of transactions (Article 179 of the Civil Code) is currently in parallel with those discussed in Art. 169 of the Civil Code is justified, since they continue to be considered voidable and not void, as is the case with respect to transactions contained in Art. 169 Civil Code.

The invalidity of a transaction means that an action performed in the form of a transaction does not entail the emergence, change or termination of civil rights and obligations to which it was aimed. This does not mean that an invalid transaction does not entail any legal consequences at all. Completing an invalid transaction is an illegal action (clause 2 of Article 167 of the Civil Code).

A transaction is considered invalid not from the moment this fact is established or recognized by the court, but from the moment it is completed. Therefore, the legal consequences of such a transaction apply to the actions of the parties to the transaction, carried out from the moment the transaction is completed until the court makes a corresponding decision, and may extend to actions that have not yet been carried out by one of the parties to the transaction (see Part 2.3 of Article 169 of the Civil Code).

If the transaction is invalid, the parties, as a general rule, are obliged to return to each other everything received under the transaction in kind, and if this is not possible, to reimburse the value of what was received in money. This mutual return of property is called bilateral restitution.

Other consequences of invalidity of transactions are provided for, in particular, Art. 169 and 179 Civil Code. So, part 3 of Art. 169 and art. 179 of the Civil Code provide for unilateral restitution, i.e. return of property to the party who had no intent when making the transaction, or to the injured party, and Part 2 of Art. 169 does not allow restitution at all.

Compensation for losses as a right consequence of an invalid transaction is provided for only by special rules (see Articles 178 and 179 of the Civil Code). In other cases, the Civil Code does not require compensation for losses that may be caused to the parties to the transaction.

The consequences of failure to comply with the notarial form of a transaction apply to transactions, the notarial form of which is established both by law and by agreement of the parties.

A transaction, the notarial form of which is not observed, is void (see paragraph 1 of Article 160 of the Civil Code). The consequences provided for in Art. 167 Civil Code.

Failure to comply with the requirement for state registration entails the invalidity of the transaction only in cases provided for by law. Thus, failure to comply with the requirement to register a mortgage agreement in the manner established for registration of transactions with the relevant property entails its invalidity (see paragraphs 3 and 4 of Article 339 of the Civil Code).

Transactions that are recognized by law as invalid due to non-compliance with the requirement for their registration are void. The consequences provided for in Art. 167 Civil Code.

Clause 2 allows for a transaction that has not been notarized to be recognized as valid in court in order to protect the rights and legitimate interests of a bona fide party. Recognition of a valid notarized transaction is possible if two conditions are met:

• a) one of the parties has fully or partially executed the transaction;
• b) the other party avoids completing the transaction. Subsequent notarization of the transaction is not required in this case.

Clause 3 provides for the possibility of a court making a decision to register a transaction if two conditions are met:

• a) the transaction was completed in the proper form, i.e. the requirements established for a simple written form of a transaction have been met, and in cases established by law or agreement of the parties, for its notarization;
• b) one of the parties avoids registering the transaction.

The decision to register a transaction is made at the request of the interested party, and is the basis for registering the transaction.

Evasion of a party from notarization of a transaction or its registration is a failure to comply with the requirements of the law regarding the form of the transaction, or the agreement of the parties to give the transaction a notarial form. Therefore, the party that unreasonably evades notarization of a transaction or its registration is obliged to compensate the other party for losses caused by the delay in completing the transaction or its registration.

Since in paragraphs. 2-4 of the Civil Code we are talking about at least two parties to the transaction; it can be concluded that the rules established by them apply only to bilateral and multilateral transactions.

If the transaction is invalid, each party is obliged to return to the other everything received under the transaction, and if it is impossible to return what was received in kind (including when the received is expressed in the use of property, work performed or service provided), reimburse its value in money - if there are other consequences The invalidity of a transaction is not provided for by law. Civil Code of the Russian Federation (Part One) dated November 30, 1994. // Russian newspaper. - 1994.- December 8.- Art. 167

This action is called bilateral restitution (restoration of the previous state). Bilateral restitution applies to transactions made by minors under 14 years of age; to transactions made by minors aged 14 to 18 years, if they are declared invalid; to transactions made by a citizen whose legal capacity is limited by a court, in the event of their being declared invalid; to invalid transactions that go beyond the scope of special legal capacity, etc.

It should be borne in mind that the above rule is of a general nature and is applied whenever a special rule does not establish other consequences for a particular type of invalid transaction.

The application of other consequences (restoration of one party to a transaction to its original position or recovery of everything transferred under the transaction to the state) is permissible only in cases where there is a direct prescription for this by a special law. Since there is no such indication, the general rule of restoring both parties to their original position applies.

Restoring one side to its original position

The meaning and basis for the restoration of one party is that, in appropriate cases, the invalidity of a transaction is caused by the unlawful, guilty (intentional) actions of one of the parties, while the other party was the victim of the illegal actions of its counterparty. In these cases, the guilty party must be punished and, conversely, the interests of the injured party must be protected and its rights restored.

Unilateral restitution means that only one of the parties to the transaction has the right to return what it gave to the other party. Alekseev S.S. Civil law: textbook / ed. S.S. Alekseeva - 2nd ed., revised. and additional - M.: Prospekt, 2009. - P.105 The latter does not have the right to property restoration. What was transferred by this party to the other is subject to collection to the state. Unilateral restitution is provided for, for example, in Art. 179 of the Civil Code, which determines the consequences of transactions made under the influence of deception, violence, threat, unintentional agreement between a representative of one party and the other party, or a combination of difficult circumstances.

If a transaction is declared invalid by the court at the request of the victim as made under the influence of deception, violence, threats and some other circumstances, then the other party returns to the victim everything received under the transaction, and if it is impossible to return what was received in kind, its value in money is reimbursed. The property received by the victim from the other party under the transaction, as well as the property due to him in compensation for what was transferred to the other party, turns into the income of the Russian Federation.

Unilateral restitution may take place subject to certain conditions. For example, if there is intent (Article 189 of the Civil Code - transactions made for a purpose contrary to the foundations of law and order and morality).

Conversion of the property transferred under the transaction to the income of the state - this type of basic property sanctions is imposed by law on the parties who made the transaction, for the purpose of knowingly contrary to the foundations of law and order and morality. If there is intent on the part of both parties to such a transaction - in the case of execution of the transaction by both parties - everything received by them under the transaction is recovered from the income of the Russian Federation, and in the case of execution of the transaction by one party, from the other side everything received by it and everything due from it is recovered from the income of the Russian Federation to the first party in compensation for what was received. Civil Code of the Russian Federation (Part One) dated November 30, 1994. // Russian newspaper. - 1994.- December 8.- Art. 169

In case of execution of a transaction by one party, the other party collects as income of the Russian Federation everything received by it and everything due from it to the first party in compensation for what was received. If there is intent on the part of only one of the parties to such a transaction, everything received by it under the transaction must be returned to the other party, and what the latter received or what was due to it in compensation for what was performed shall be recovered as the income of the Russian Federation.

Such a penalty is undoubtedly of a punitive nature. D.M. Genkin considers it essentially a confiscation carried out in a civil manner, known only to Soviet civil law. But there is another opinion (V.A. Ryasentsev), according to which collection to the state’s income is a new legal phenomenon created by the Soviet state, and not confiscation, since the latter is unknown to civil law and is applied only in cases strictly limited by law.

We cannot agree with these arguments. The recovery of the subject of an invalid transaction for the benefit of the state is, by its nature, precisely confiscation, the use of which is permitted in specially provided cases.

Only the party who acted without intent can demand back what was performed. If, with the intent of one party, the transaction is executed by the other, the latter has the right to receive what was executed back. The guilty party must transfer to the state revenue everything that was due from it. If the transaction was executed only by an intentional party, the innocent party must transfer to the state the income of everything that was completed under the transaction, but must not fulfill it itself.

Additional property consequences of invalidity of transactions - the use of this type of property consequences, such as bilateral restitution, in some cases may not fully restore the original property position of the party to the transaction. In order to achieve real restoration of a certain person to the original property position, the law, in relation to a limited number of invalid transactions, provides for additional property consequences.

Additional property consequences: compensation for real damage incurred (in a transaction with an incapacitated person, declared invalid by the court if the other party knew about his incapacity); non-admission of restitution - everything received under the transaction goes into state income (the transaction was made for a purpose contrary to the foundations of law and order and morality, with the intent of both parties). Grudtsyna L.Yu. Civil law of Russia: textbook / ed. L.Yu. Grudtsina, A.A. Spektor.- M.: Justitsinform, 2008. -P.97

So, for example, if a transaction is declared invalid as made under the influence of a mistake, then each party is obliged to return to the other everything received under the transaction, and if it is impossible to return what was received in kind, to compensate its value in money. Civil Code of the Russian Federation (Part One) dated November 30, 1994. // Russian newspaper. - 1994.- December 8.- Art. 167

The party on whose claim the transaction is declared invalid has the right to demand from the other party compensation for actual damage caused to it if it proves that the error arose through the fault of the other party.

This type of property consequences of the invalidity of a transaction was established in order to protect and ensure the reality of restoration of the rights and legitimate interests of minors, minors, incompetents and some other citizens specified in the law. Additional property consequences apply beyond the basic ones. Only in case of confiscation, additional property consequences are not provided for by law. These consequences can be imposed only in cases expressly provided for by law. Among the grounds for imposing additional property consequences, it is necessary to highlight objective and subjective aspects. The first includes the presence of losses among the above-mentioned persons, the second includes the counterparty’s awareness of the relevant facts or his guilt, which can be either in the form of intent or in the form of negligence.

1. An invalid transaction does not entail legal consequences, except for those related to its invalidity, and is invalid from the moment of its completion.

A person who knew or should have known about the grounds for the invalidity of a contested transaction, after the recognition of this transaction as invalid, is not considered to have acted in good faith.

2. If the transaction is invalid, each party is obliged to return to the other everything received under the transaction, and if it is impossible to return what was received in kind (including when what was received is expressed in the use of property, work performed or service provided), reimburse its cost, if other consequences The invalidity of a transaction is not provided for by law.

3. If it follows from the essence of a voidable transaction that it can only be terminated for the future, the court, declaring the transaction invalid, terminates its validity for the future.

4. The court has the right not to apply the consequences of invalidity of a transaction (clause 2 of this article) if their application would contradict the fundamentals of legal order or morality.

Commentary on Article 167 of the Civil Code of the Russian Federation

1. An invalid transaction does not give rise to the legal consequences that the parties who made it sought to achieve, but entails the consequences of its invalidity, which are established by law and, as a general rule, are unfavorable for the participants in an invalid transaction. In this case, the invalidity of a transaction, if there are proper legal grounds for it, as a general rule occurs from the moment of its completion.

However, the Civil Code allows exceptions to these general rules. According to paragraph 2 of Art. 172 an insignificant transaction of a minor in his interests may be recognized by the court as valid. In addition, a voidable transaction may be declared invalid by the court not from the moment it was completed, but for the future (see paragraph 6 of this commentary).

2. The general consequence of the invalidity of a transaction, relating to both voidable and void transactions, is, in accordance with paragraph 2, the return to each of the parties of everything received under the transaction, called mutual restitution. If it is impossible to return the item received, its value in money will be refunded.

When reimbursing the cost, two questions may arise: how it should be determined and at what point. In the event of a dispute between the parties, these issues should be resolved according to the rules of the Civil Code on the price of the contract (clause 3 of Article 424) and the date of determination of compensable losses (clause 3 of Article 393), as norms that can be used by analogy with the law.

3. Other consequences of the invalidity of the transaction, which, according to clause 2 of Art. 167 may be provided for by law; they are defined in the Civil Code in different ways: in general form and for certain types of invalid transactions.

A general additional consequence is the rule of Art. 1103 of the Civil Code on the application of the provisions on unjust enrichment to demands for the return of goods executed under an invalid transaction. This is an important innovation of the Civil Code compared to previous legislation.

According to Art. 1103 of the Civil Code, the rules of Ch. 60. Liabilities due to unjust enrichment (Articles 1102 - 1109). This allows the parties to an invalid transaction, in addition to the return of what was received under the transaction in kind or its value, to also demand income that was or could be extracted from this property, and interest on monetary compensation (Article 1107). When returning property or reimbursing its value, you can demand reimbursement of necessary expenses with an offset to the benefits received (Article 1108).

4. In relation to certain types of invalid transactions, as an exception to the general rules of paragraph 2 of Art. 167, mutual restitution is not provided for and a rule is introduced on the return of what is received by only one party (Article 179 of the Civil Code of the Russian Federation) or on the recovery of what is received under the transaction into budget revenue (Article 169 of the Civil Code).

5. In some cases of invalidity of transactions, the Civil Code, as other additional consequences, gives the interested party the right to demand compensation for losses incurred as a result of such invalidity. The claim for damages is allowed by virtue of Art. Art. 178, 179, 687, paragraph 3 of Art. 951. If this right is not mentioned in the Civil Code, there is no basis for making such a claim.

In relation to the executed and preserved part of the transaction, as a general rule, the mutual rights and obligations of the parties remain in force. For example, when terminating an invalid lease agreement for the future, the parties are obliged to fulfill their mutual obligations related to the actual use of the property (pay rent, costs of maintaining the property, etc.). However, a court decision, taking into account the specifics of individual cases of invalidity, may result in a different solution to this issue.

Commentary to Art. 167 Civil Code of the Russian Federation

1. The commented article establishes the general legal consequences of invalid transactions, which boil down to the following. First of all, this article reveals the essence of an invalid transaction as an action that does not give rise to the legal consequences for which it was intended. In paragraph 1 of Art. 167 directly states that an invalid transaction entails only those legal consequences that are associated with its invalidity.

This provision, however, has certain exceptions. So, according to paragraph 1 of Art. 165 of the Civil Code, the court may recognize as valid a transaction that is not in the notarial form required by law; in accordance with paragraph 2 of Art. 172 of the Civil Code, the court may recognize as valid a transaction of a minor made to his benefit, etc.

2. Further, as a general rule, a transaction is invalid from the moment it is completed (clause 1 of Article 167). This provision, quite natural for void transactions, is fundamental for voidable transactions. The latter do not give rise to the consequences for which they were intended from the very beginning, and not from the moment the court decision to invalidate them enters into force, which has retroactive effect.

This rule has an exception, which is provided for in paragraph 3 of Art. 167. In a number of cases, based on the nature of the voidable transaction, it can only be terminated for the future. Thus, if the subject of the transaction was the provision of services or the provision of property for temporary use, returning the parties to the original position in the event of partial execution of the transaction turns out to be impossible, since the corresponding service has already been consumed, and useful properties have been extracted from the property in the process of its use. In this case, the court, declaring the transaction invalid, terminates its validity for the future. This means that the terms of the transaction that was declared invalid by the court are applied to the relations of the parties that took place before the court decision entered into force.

This exception applies only to voidable transactions. If a similar situation arises in relation to void transactions, the relations of the parties are regulated mainly by the rules on unjust enrichment.

Recognition of a transaction as invalid should be distinguished from termination and cancellation of a transaction, in which the rights and obligations of the parties, as a general rule, cease only for the future.

3. Finally, it should be borne in mind that the general consequences of the invalidity of transactions, as well as all other provisions of § 2 Ch. 9 of the Civil Code, apply to contracts, unless otherwise established by the rules on certain types of contracts and Art. 431.1 of the Civil Code (see commentary to Article 431.1 of the Civil Code).

4. The rules of the commented article apply to both voidable and void transactions. The different procedures for declaring them invalid do not have any impact on the consequences of their invalidity. In other words, after a voidable transaction is declared invalid, it is no different from a void transaction.

There are also some exceptions to this rule. One of them, namely the possibility of terminating a contested transaction only for the future (clause 3 of Article 167), was already discussed in clause 2. In addition, in accordance with clause 3 of Art. 431.1 of the Civil Code, in the event of invalidation at the request of one of the parties to an agreement that is a voidable transaction and the execution of which is related to the implementation of business activities by its parties, the general consequences of the invalidity of the transaction are applied, unless other consequences of the invalidity of the agreement are provided for by the agreement of the parties, concluded after the recognition of the agreement as invalid and not affecting the interests of third parties, and also not violating public interests (see commentary to Article 431.1 of the Civil Code). Finally, there are more specific differences in the consequences of the invalidity of individual voidable and void transactions. Thus, only in voidable transactions is unilateral restitution possible (Article 179 of the Civil Code), as well as compensation for damage caused by one party to the transaction to the other (Articles 178, 179 of the Civil Code).

5. Paragraph 1 of the commented article has been supplemented with a new paragraph indicating the bad faith of a person who knew about the grounds for the invalidity of a contested transaction, if the contested transaction is declared invalid. From the meaning of this rule it follows that the party should have known about this already at the time of the transaction. Although such a rule has not been established in relation to void transactions, by analogy with the law one can draw a similar conclusion in relation to a party who knew about the nullity of the concluded transaction.

A finding of bad faith by one of the parties to a transaction may serve as a basis for applying sanctions provided for by law, in particular, filing a claim for damages.

6. The general consequence of the invalidity of a transaction is bilateral restitution - the return by the parties of everything received under the transaction to each other. According to paragraph 2 of Art. 167 mutual restitution occurs in all cases, unless the law establishes other consequences of the invalidity of the transaction.

By its legal nature, bilateral restitution is a special sanction that expresses the state’s negative attitude towards a transaction that does not comply with certain legal requirements. However, this sanction does not apply to measures of civil liability, and therefore does not require, for its application, the establishment of the guilt of the parties and other conditions of civil liability.

By its nature, restitution applies only when the transaction is at least partially fulfilled by the parties. If the parties have not yet begun to execute the transaction, the matter is limited to stating its invalidity, which should be regarded as a ban on its execution.

7. Within the meaning of paragraph 2 of Art. 167 of the Civil Code, mutual provision under an invalid transaction that was executed by both parties is considered equal until proven otherwise. When satisfying the demand of one party to an invalid transaction to return what the other party received, the court simultaneously considers the issue of collecting in favor of the latter everything that the first party received, unless other consequences of invalidity are provided for by law.

8. In cases where the return of what was received under the transaction in kind is impossible (for example, the property transferred under the transaction has been consumed, the work has been completed, the service has been provided, etc.), the parties are obliged to compensate what was received in money. This rule is not always applicable, since the consumption of the corresponding good often makes it pointless to return its value in response to receiving the price paid for it. Nevertheless, this rule is useful because, firstly, it is suitable for most situations and, secondly, it demonstrates the legislator’s consistent approach to the consequences of invalid transactions.

The cost of what is received is determined by agreement of the parties, and in the event of a dispute, it is established on the basis of the rules enshrined in clause 3 of Art. 393 of the Civil Code, which can be applied by analogy with the law.

Taking into account the special nature of the temporary use of an individually defined thing, the limitation period for a claim for its return, regardless of the moment the transaction is declared invalid, begins no earlier than the refusal of the relevant party to the transaction to voluntarily return it (paragraph 2, paragraph 2, article 200 of the Civil Code).

9. Bilateral restitution, and if it is impossible to return what was received in kind, replacing it with a cash equivalent is applied unless other consequences of the invalidity of the transaction are provided for by law. “Other consequences provided for by law” mean consequences of two kinds.

First, there are consequences that occur in lieu of bilateral restitution. These include the return of what was transferred under the transaction to only one party (unilateral restitution), recovery of everything received under the transaction to the income of the Russian Federation (lack of restitution), recognition of the transaction as valid (clause 2 of Article 165, clause 2 of Article 172 of the Civil Code) and the impossibility of reclaiming things from a bona fide purchaser, subject to the conditions provided for in Art. 302 Civil Code.

Secondly, these are consequences that can occur along with bilateral restitution and are of an auxiliary nature in relation to it. They are:
a) making settlements related to both the income extracted from the property while it was in the possession of the other party, and the costs of maintaining the property, as well as its improvement. Although this aspect of the relationship between the parties to the article being commented on, as well as in general by the rules of Chapter. 9 of the Civil Code, not regulated, to it, by direct order of Art. 1103 of the Civil Code, the rules on the return of unjust enrichment are applicable. Therefore, the legal basis for settlements between the parties to an invalid transaction is Art. 1107, 1108 Civil Code;
b) recovery of losses in the form of actual damage that the party considered the victim suffered through the fault of the other party in connection with the recognition of the transaction as invalid (clause 1 of Article 171, clause 1 of Article 172, clause 2 of Article 178, clause 2 Art. 179, paragraph 3 Art. 951 Civil Code). By its legal nature, this claim is of a tortious nature.

10. Paragraph 4 provides the court with the opportunity not to apply the consequences of invalidity of a transaction if, in the opinion of the court, this would contradict the fundamentals of law and order and morality. When making such a decision, the court must not limit itself to an abstract reference to the fundamentals of law and order and morality, but point out specific circumstances that, in its opinion, prevent the application of the general consequences of the invalidity of the transaction.

On the concept of “the foundations of law and order and morality”, see the commentary to Art. 169 Civil Code.

Judicial practice under Art. 167 Civil Code of the Russian Federation

Positions of the highest courts on Article 167 of the Civil Code.

Supreme Court of the Russian Federation

1. Determination of October 7, 2019 in case No. A73-11583/2015
2. Determination of October 4, 2019 in case No. A66-5899/2017
3. Determination of October 1, 2019 in case No. A65-28630/2016
4. Determination of October 1, 2019 in case No. A63-12302/2018
5. Determination of October 1, 2019 in case No. A14-24627/2017
6. Determination of October 1, 2019 in case No. A14-24625/2017
7. Determination of October 1, 2019 in case No. A41-60743/2016
8. Determination of October 1, 2019 in case No. A60-21836/2018
9. Determination of September 30, 2019 in case No. A40-239289/2015
10. Determination of September 30, 2019 in case No. A27-4297/2016