Contract Law

A contract (a transaction involving two or more parties) is the basis of civil law relationships in every civilised legal system based on civil law categories. The multitude of terms used to designate the concept (contract, agreement, covenant, etc.) does not alter its substance, as they are all synonymous in jurisprudence.

Under the Russian Federal Civil Code, a transaction (involving two or multiple parties) is an action aimed at changing civil rights and obligations. It is necessary and sufficient that two parties (for bilateral transactions) or three or more parties (for multilateral transactions) express their will. We shall use the term "deal" hereafter as the most complete expression of the general nature of the phenomenon in terms of law. Any contract is a transaction, but not every transaction is a contract.

Transactions can have verbal or written form. The verbal form may imply more than the verbal expression of its substance. Persons' intention to transact may follow from their actions or be inferred from the parties' silence.

In most cases, written form is certainly necessary for more serious transactions. A transaction, one of the parties to which is a legal entity and the value of which exceeds 10 time the minimum wage (currently 11,000 RUR), must be in writing.

Law often requires that transactions should be notarised or registered by the state (in most cases where the transaction involves transfer of real estate title). It is necessary to bear in mind that failure to observe the form may invalidate the transaction. This rule may be set with the agreement of the parties.

Any rule may be invalidated in court if its substance, purpose, circumstances or subjects (participants) do not meet the requirements of law. For instance, transactions by incapable or not completely capable individuals may be declared invalid.

The main types of contract (most of these bilateral transactions) are regulated by the Civil Code (Part 2) this way or another and the parties must comply with the requirements set by law for a newly arising legal relationship. Some rules are alternative and may be changed with the agreement of the parties. Thus, a contract may contain three groups of provisions:

1. those originally established by law and not subject to any change; the parties do not necessarily have to refer to these provisions in their contract, as they will operate regardless of their will. These provisions may be repeated in the text of the contract without any new obligations arising for either of the parties. If the contract contains any principles contradicting these provisions, the former will be deemed null and void and only the provisions specified by law will be operative.
2. those specified by law and operating by default until changed with the agreement of the parties;
3. others which are not referred to by law and which can be established with the agreement of the parties only.

Besides, any contract can be shown to have essential features which have to be present for each specific agreement between the parties to be deemed concluded and have any legal operations.

It should be borne in mind that in the end, any contract may prove to be different from what the parties considered it to be (or wanted it to be considered as) as they made it. The name of the contract has no significant role. What is important is the substance of legal relationships arising out of the contract, according to which it will be identified with those existing in law, compared to similar types of contract or considered individual (but compliant with the transactions provision in any case).

Here are just some of the types of contract existing under Russian contract law, with many of these including several sub-types each:

• sales contract,
• rental agreement,
• contractor's agreement,
• contract of carriage,
• contract of service,
• storage contract, etc.

Rosjurconsulting lawyers provide comprehensive support of all types of contract including those involving foreign natural persons and legal entities:

• drafting the necessary contract text to the client's requirements,
• developing the optimum legal scheme for the contract,
• approval and signing by the other party,
• representation of the client's interests where notary certification or state registration is necessary,
• representation of the client's interests in court where disputes arise out of the contract.

We will be happy to help you figure out the diversity of Russia's civil law principles and assist you in making decisions at the highest level.