A controversial and insignificant deal: the difference, consequences and examples

What are void transactions, and in addition the consequences of void and disputable transactions, is specified in the Civil Code.

Invalid

The legislation provides for 2 variants of invalid transactions - this is a disputable and insignificant transaction. What is the invalidity of a transaction? In fact, this is the non-occurrence of that outcome and result that the parties or one of the parties that signed the agreement wished, but, on the contrary, the occurrence of such a result of the transaction, which is laid down by law. In order to recognize the agreement of the parties as invalid, it is necessary to take into account the nature of the violations committed at its conclusion. The disputable and insignificant deal is different.

The contested transaction

In the event that after the conclusion of the agreement, even if it was concluded with some violations, none of its participants announced to the judicial authorities that it should be declared invalid, such a contract can be executed by the participants. In this case, such an action should not be filed and any interested persons. Such execution of the contract will not contradict the legislation. That is, a disputable transaction is a contract or a one-sided transaction, although committed with violation, but entailing in certain cases the appearance for the parties that committed it, the legal result.

In this case, the parties retain the right to judicial protection of their interests. An example is the situation in which a minor child aged between 14 and 18 years has made a major transaction. At the same time, his parents did not give consent to this. Legally, there is a violation of the law, and parents have the right to file a claim with the court with a claim to recognize the concluded agreement as invalid. However, they are entitled not to file a claim, thereby, as it were, approving the conclusion of the transaction. Such a character means that a disputable transaction is a relatively invalid transaction.

Varieties of contested transactions

Thus, the legislator granted citizens and legal entities the opportunity to determine whether they should apply to the judiciary to safeguard their own interests, or there is no such need, and the parties themselves will resolve this issue. A disputable and insignificant transaction can be subdivided into species, depending on the grounds. The list of these grounds is established by regulatory enactments. Civil law believes that a disputable transaction is a transaction committed:

• Organization and extending beyond the boundaries of its legal capacity;
• Under the influence of delusion;
• Persons limited by the court in capacity;
• By conflation of grave factors, violence, threat, deceit, willful agreement of the agent of one party with another;
• Persons who can not realize the importance of their own actions or manage them;
• Person outside the boundaries of her authority;
• Children aged 14 to 18 years.

Void transactions

As already noted, there are two types of transactions, which can be recognized as invalid. This is a disputable and insignificant deal. The difference between them is that the latter is considered absolutely invalid from the moment of its immediate conclusion. As a result of such a conclusion of the contract, the principles of civil legislation are seriously violated. Recognition of a void transaction is required when its commission, as well as further execution, grossly violates not only the rights of an individual citizen, but also the interests of the whole society. Such transactions are contrary to the established system of values of society, and therefore, can not be placed in dependence on the will of its participants, as in a disputable transaction.

Types of void transactions

The list of such transactions is established by law. These include transactions:

• Feigned;
• With incompetent;
• Opposing the foundations of law and order and morality;
• Do not meet the rule or other legal acts;
• With persons under 14 years of age;
• Imaginary;
• Completed in violation of the form specified by the legislation under the fear of invalidity.

Who can file a claim

Legislative acts, in particular, the Civil Code, established that a claim on the basis of which invalid disputable and void transactions will be recognized as such, only the person specified in the text of the law has the right to file. As follows from the aforesaid, on the disputable transactions to such persons first of all are the direct participants of the arising legal relationship, that is, the transaction. Also, such a person may be another interested person, that is, whose rights and interest are affected by the transaction. Examples of disputable and void transactions are manifold. So, such can serve as a contract concluded by a limited liability company, the commission of which goes beyond the limits of the legal capacity of this society. The claim for the recognition of this contract as invalid can be filed in court by the founder of the company, the company itself, its counterparty, as well as the controlling and supervising state body.

In some situations, the legislator specifically reduces the list of persons who will be able to challenge the transaction, granting such a right only to its participants. So, the norm of 174 of the Civil Code states that an action for invalidating a concluded transaction that was committed by a representative of an organization in excess of his powers, in turn restricted by constituent documents, can only be submitted to the judicial authorities by a person in whose interests such limitations of authority are established. At the same time, no one else, including the other side, can declare such claims. However, in some cases in legislative acts the list of persons who have the right to file a complaint with a judicial body is expanding, such powers are granted to persons who did not participate in the conclusion of the transaction. This may be the tax authorities, and antitrust, and many others.

Invalidity of a void transaction

Recognition of a void transaction is possible by sending a suit to the court. However, it should be borne in mind that it will be invalid regardless of whether there is a court decision. However, if the person concerned submits a claim to recognize such a transaction as invalid, he will be obliged to consider it in the general procedure. When issuing an act, the court will be required to indicate in its decision that the transaction is void. The results of its invalidity may be applied by the judicial authority on its own initiative or at the request of any interested person.

Especially it is necessary to take into account that an insignificant transaction does not cause any legal results, therefore it is recognized as invalid from the time it was committed.

Dependence on bases

A disputable and insignificant transaction, as already understood, is considered different. However, the law provides that the same transactions, if there are certain grounds, can be recognized as null and void. For example, a contract for the purchase and sale of real estate following privatization of state property may be insignificant, but it is also possible to recognize it as a contested transaction. It depends on the reason, on the basis of which the contract will be recognized as invalid.

The norms of the Civil Code of the Russian Federation establish a general relationship between such transactions. In cases where the legislator has not provided that a transaction that does not comply with legislative acts is considered to be contested or does not have other consequences of the infringement, the rules for an insignificant transaction must be applied to it. In other words, the nullity of a transaction is invalidity, which is related to its illegality, unless otherwise provided by law. If the normative acts provide for a different option, it will be considered that this is a disputable transaction. This follows from article 168 of the code mentioned above.

The difference between invalid transactions from non-committed

Invalid disputable and void transactions must be distinguished from non-concluded ones. The latter are imperfect due to the lack of general conditions that are necessary for the transaction to be completed. An example could be a one-sided transaction - the issuance of a check, in which his requisites are not specified. Such a check will be considered invalid, and the transaction itself is imperfect, unconnected. In the case of contracts, examples include improper acceptance or non-agreement between the parties about the essential terms of the contract.

If a contract or unilateral transaction is not concluded, then, accordingly, there are no reasons for using the consequences of invalid transactions. In such situations, the legislator recommends the use of general norms and requirements on civil liability, as well as on unjust enrichment. However, here there is also some complexity. Some violations in some situations may cause invalidation, in other cases they indicate that the transaction was not concluded. Usually such include violations of the form of the transaction and the order of its conclusion.

From violations that entitle the counterparty to demand the termination of the transaction, it is still necessary to distinguish between void and controversial transactions. The table placed above and delimiting these two types will help the reader to systematize the information obtained.