Application

Article 1

This Law is enacted for the purpose of protecting the legitimate rights and interests of the parties to contracts, maintaining the socio-economic order and promoting the socialist modernization.

Article 2

For the purpose of this Law, a contract means an agreement on the establishment, alteration or termination of a civil right-obligation relationship between natural persons, legal persons or other organizations as subjects with equal status. Agreements on establishing such relationships as marriage, adoption and guardianship shall be governed by the provisions of other laws.

Article 38

If the State gives, according to the needs, mandatory assignments or State purchase orders, the legal persons and other organizations concerned shall conclude contracts inaccordance with the rights and obligations provided for by the relevant laws and administrative regulations.

Article 126

The parties to a foreign-related contract may choose those laws applicable to the settlement of contract disputes, unless stipulated otherwise by law. If the parties to a foreign-related contract fail to make such choice, the State laws most closely related to the contract shall apply.For the contracts to be fulfilled in the territory of the People's Republic of China on Chinese-foreign equity joint ventures, on Chinese-foreign contractual joint ventures and on Chinese-foreign cooperation in exploring and exploiting natural resources, the laws of the People's Republic of China shall apply.

Article 1.101 (ex art. 1.101) - Application of the Principles

(1) These Principles are intended to be applied as general rules of contract law in the European Communities.

(2) Principles will apply when the parties have agreed to incorporate them into their contract or that their contract is to be governed by them.

(3) These Principles may be applied when the parties:

(a) have agreed that their contract is to be governed by "general principles of law", the "lex mercatoria" or the like; or

(b) have not chosen any system or rules of law to govern their contract.

(4) These Principles may provide a solution to the issue raised where the system or rules of law applicable do not do so.

Article 1.102 - Freedom of contract

(1) Parties are free to enter into a contract and to determine its contents, subject to the requirements of good faith and fair dealing, and the mandatory rules established by these Principles.

(2) The parties may exclude the application of any of the Principles or derogate from or vary their effects, except as otherwise provided by these Principles.

Article 1.103 - Mandatory Law 

(1) Where the otherwise applicable law so allows, the parties may choose to have their contract governed by the Principles, with the effect that national mandatory rules are not applicable.

(2) Effect should nevertheless be given to those mandatory rules of national, supranational and international law which, according to the relevant rules of private international law, are applicable irrespective of the law governing the contract.

Article 1.104 - Application to questions of consent

(1) The existence and validity of the agreement of the parties to adopt or incorporate these Principles shall be determined by these Principles.

(2) Nevertheless, a party may rely upon the law of the country in which it has its habitual residence to establish that it did not consent if it appears from the circumstances that it would not be reasonable to determine the effect of its conduct in accordance with these Principles.

Article 1.106 (ex art. 1.104) - Interpretation and Supplementation 

(1) These Principles should be interpreted and developed in accordance with their purposes. In particular, regard should be had to the need to promote good faith and fair dealing, certainty in contractual relationships and uniformity of application.

(2) Issues within the scope of these Principles but not expressly settled by them are so far as possible to be settled in accordance with the ideas underlying the Principles. Failing this, the legal system applicable by virtue of the rules of private international law is to be applied.

Article 1.107 (ex Art. 1.113) - Application of the Principles by Way of Analogy 

These Principles apply with appropriate modifications to agreements to modify or end a contract, to unilateral promises and other statements and conduct indicating intention. 

Article 1.301 (ex art. 1.105) - Meaning of Terms 

In these Principles, except where the context otherwise requires: 

(1) 'act' includes omission; 

(2) 'court' includes arbitral tribunal; 

(3) an 'intentional' act includes an act done recklessly; 

(4) 'non-performance' denotes any failure to perform an obligation under the contract, whether or not excused, and includes delayed performance, defective performance and failure to co-operate in order to give full effect to the contract. 

(5) A matter is 'material' if it is one which a reasonable person in the same situation as one party ought to have known would influence the other party in its decision whether to contract on the proposed terms or to contract at all.

(6) 'Written' statements include communications made by telegram, telex, telefax and electronic mail and other means of communication capable of providing a readable record of the statement on both sides.

Article 1.302 (ex art. 1.108) - Reasonableness

Under these Principles reasonableness is to be judged by what persons acting in good faith and in the same situation as the parties would consider to be reasonable. In particular, in assessing what is reasonable the nature and purpose of the contract, the circumstances of the case, and the usages and practices of the trades or professions involved should be taken into account.

§ 158 Relief Including Restitution

§ 158 Relief Including Restitution

§ 158 Relief Including Restitution

  1. In any case governed by the rules stated in this Chapter, either party may have a claim for relief including restitution under the rules stated in §§ 240 and 376.
  2. In any case governed by the rules stated in this Chapter, if those rules together with the rules stated in Chapter 16 will not avoid injustice, the court may grant relief on such terms as justice requires including protection of the parties' reliance interests.

[Chapter 6 Mistake]

§ 197 Restitution Generally Unavailable

§ 197 Restitution Generally Unavailable

§ 197 Restitution Generally Unavailable

Except as stated in §§ 198 and 199, a party has no claim in restitution for performance that he has rendered under or in return for a promise that is unenforceable on grounds of public policy unless denial of restitution would cause disproportionate forfeiture.

§ 198 Restitution in Favor of Party Who Is Excusably Ignorant or Is Not Equally in the Wrong

§ 198 Restitution in Favor of Party Who Is Excusably Ignorant or Is Not Equally in the Wrong

§ 198 Restitution in Favor of Party Who Is Excusably Ignorant or Is Not Equally in the Wrong

A party has a claim in restitution for performance that he has rendered under or in return for a promise that is unenforceable on grounds of public policy if

  • he was excusably ignorant of the facts or of legislation of a minor character, in the absence of which the promise would be enforceable,or
  • he was not equally in the wrong with the promisor.

§ 199 Restitution Where Party Withdraws or Situation Is Contrary to Public Interest

§ 199 Restitution Where Party Withdraws or Situation Is Contrary to Public Interest

§ 199 Restitution Where Party Withdraws or Situation Is Contrary to Public Interest

A party has a claim in restitution for performance that he has rendered under or in return for a promise that is unenforceable on grounds of public policy if he did not engage in serious misconduct and

  • he withdraws from the transaction before the improper purpose has been achieved, or
  • allowance of the claim would put an end to a continuing situation that is contrary to the public interest

§ 272 Relief Including Restitution

§ 272 Relief Including Restitution

§ 272 Relief Including Restitution

§ 272 Relief Including Restitution

  1. In any case governed by the rules stated in this Chapter, either party may have a claim for relief including restitution under the rules stated In §§ 240 and 377.
  2. In any case governed by the rules stated in this Chapter, if those rules together with the rules stated in Chapter 16 will not avoid injustice, the court may grant relief on such terms as justice requires including protection of the parties' reliance interests.

[Chapter 11 – Impracticability of Performance and Frustration of Purpose]

SECTION I. GENERAL

Subsection I. GENERAL PROVISIONS

CHAPTER 1 - CIVIL LEGISLATION

Article 1. Basic principles of civil legislation.

1. Civil legislation proceeds from recognizing the equality of participants in relations regulated thereby, inviolability of property, freedom of contract, inadmissibility of someone's intervention in private affairs, necessity for civil rights to be freely exercised, ensuring restoration of violated rights and their judicial protection.

2. Citizens (individuals) and legal persons acquire and exercise their civil rights willfully and to their benefit. They are free to set their rights and responsibilities on a contractual basis and to stipulate new contract terms and conditions unless these are contrary to legislation.

Civil rights can be restricted on the basis of federal law and only to the extent deemed necessary to protect foundations of constitutional order, morality, health, rights and lawful interests of other people and to ensure national defence and security of the state.

3. Goods, services and financial resources can freely move within the entire territory of the Russian Federation.

Restrictions as to the movement of goods and services can be imposed in accordance with federal law if so required for the purposes of ensuring security, protection of people's lives and health, conservation of nature and protection of cultural values.

Article 2. Relations regulated by civil legislation.

1. Civil legislation defines the legal status of participants in civil circulation, grounds for the rise and order for the exercise of property right and other real rights, exclusive rights to the results of intellectual work (intellectual property), regulates contractual and other obligations, as well as other proprietary and related personal non-propriety relations based on the equality, autonomy of will and propriety independence of their participants.

Participants in relations regulated by civil legislation include citizens and legal persons. Also, the Russian Federation, Russian Federation subjects and municipal formations can participate in relations regulated by civil legislation (article 124).

Civil legislation regulates relations between persons engaged in entrepreneurial activities or participating in them where it proceeds from the concept that an activity is entrepreneurial if it is carried on independently and at one's own risk and is aimed at regular profit-making through using property, selling goods, performing jobs and providing services by persons registered in this quality according to the procedure established by the law.The rules laid down by civil legislation apply to relations in which foreign citizens and foreign legal persons are participants unless otherwise provided for by federal law.

2. Inalienable human rights and freedoms and other immaterial goods are protected by civil legislation unless it follows differently from the nature of these immaterial goods.

3. Civil legislation does not apply to property relations based on administrative or other authoritative subordination of one party to another, including tax and other financial relations unless otherwise stipulated by the legislation.

Article 3. Civil legislation and other acts containing civil law norms.

1. According to the Russian Federation Constitution, civil legislation falls within competence of the Russian Federation.

2. Civil legislation consists of this Code and other federal laws adopted in line with it (hereafter referred to as "laws") which regulate relations specified in pts. 1 and 2, art. 2 of this Code.

Civil law norms contained in other laws must be in conformity with this Code.

3. Relations specified in pts. 1 and 2, article 2 of this Code can also be regulated by Russian Federation Presidential edicts which must not contravene this Code and other laws.

4. On the basis and in fulfilment of this Code, other laws and Russian Federation Presidential edicts, the Russian Federation government has the right to pass enactments containing civil law norms.

5. If a Russian Federation Presidential edict or Russian Federation governmental enactment conflicts with this Code or some other law, this Code or relevant law shall be applied.

6. Operation and application of the civil law norms contained in Russian Federation residential edicts and Russian Federation governmental enactments (hereafter referred to as "other legal acts) are determined by the rules set in this chapter.

7. Ministries and other executive federal agencies can issue acts containing civil law norms only in the cases and within the limits specified by this Code, other laws and other legal acts.

Article 4. Duration of civil legislation.

1. Civil legislation acts are not retroactive and apply to relations arising after they have come into effect.

A law applies to relations which had arisen prior to its coming into effect only in the instances immediately provided for by the law.

2. As to the relations arising before a civil legislation act comes into effect, the latter applies to the rights and duties which arise after its enactment. The parties' relations under a contract signed before the civil legislation act comes into effect are regulated according to article 422 of this Code.

Article 6. Application of civil legislation by analogy.

1. In the cases where relations specified by pts. 1 and 2 in article 2 of this Code are not directly regulated by the legislation or by the parties' agreement and there is no applicable business custom, civil legislation regulating similar relations (analogy of the statute) is applied to such relations unless this is contrary to their essence.

2. If it is impossible to use the statute analogy, the parties' rights and duties are determined proceeding from general principles and tenor of civil legislation (analogy of the law), as well as requirements of conscientious, reason and justice.

Article 7. Civil legislation and international law norms. 1. Universally recognized principles and norms of international law and international agreements signed by the Russian Federation are, according to the Russian Federation Constitution, part of Russian Federation's legal system.

2. International agreements of the Russian Federation are directly applicable to relations mentioned in pts. 1 and 2, article 2 of this Code except in the cases when it follows from the international agreement that its application requires issuing a national act.

If an international agreement of the Russian Federation establishes rules differing from those provided for by civil legislation, then the international agreement rules shall apply.

CHAPTER 2

Arising of civil rights and duties, exercise and protection of civil rights.

Article 8. Grounds for the arising of civil rights and duties.

1. Civil rights and duties arise from the grounds provided for by the law and other legal acts, as well as from actions of citizens and legal persons which, though not stipulated by the law and such acts, give rise to civil rights and duties by virtue of general principles and tenor of civil legislation.

Accordingly, civil rights and duties arise:

1) from contracts and other transactions provided for by the law, as well as contracts and other transactions that, not being provided for by the law, do not contravene it;

2) from acts by state agencies and local self-government bodies stipulated by the law as grounds for the rise of civil rights and duties;

3) from a judicial decision that has established civil rights and duties;

4) as the result of acquiring property on grounds permitted by the law;

5) as the result of creating works of science, literature, art, inventions and other products of intellectual activity;

6) on account of damage inflicted on some other person;

7) on account of unjust enrichment;

8) on account of other actions by citizens and legal persons;

9) on account of events to which the law or other legal act relates the ensuing of civil and legal consequences.

2. Property rights that are subject to state registration arise from the time the proper property rights have been registered unless otherwise stipulated by the law.

Article 9. Exercise of civil rights.

1. Citizens and legal persons exercise at their discretion the civil rights belonging to them.

2. Refusal by citizens and legal persons to exercise their rights does not entail termination of these rights except in the cases specified by the law.

Article 11. Judicial protection of civil rights

Article 11. Judicial protection of civil rights

1. Protection of violated or disputed civil rights is carried out by the court of law, court of arbitration or arbitration tribunal (hereafter referred to as "court") according to the jurisdiction for cases laid down by procedural legislation.

2. Protecting civil rights administrative is possible only in the cases specified by the law. An administrative made decision can be appealed to the court.

Article 155. Duties Regarding Unilateral Transaction

A unilateral transaction shall create duties for the person who has concluded the transaction. It may create duties for other persons only in the instances established by law or by agreement with those persons.

Article 156. Legal Regulation of Unilateral Transactions The general provisions on obligations and on contracts shall respectively apply to unilateral transactions insofar as this is not contrary to law or to the unilateral character and essence of the transaction.

CHAPTER 27. CONCEPT AND CONDITIONS OF CONTRACT.

Article 420. Concept of Contract.

1. A contract shall be deemed to be an agreement of two or several persons concerning the establishment, change, or termination of civil rights and duties.

2. The rules for bilateral and multilateral transactions provided for by Chapter 9 of this Code shall apply to contracts.

3. The general provisions on obligations (Articles 307 to 419) shall apply to obligations which arose from a contract unless otherwise provided by rules of this

Chapter and by rules on individual types of contracts contained in this Code.

4. The general provisions on contract shall apply to contracts concluded by more than two parties unless this is contrary to the multilateral character of such contracts.

Article 421. Freedom of Contract.

Article 421. Freedom of Contract.

Article 421. Freedom of Contract.

1. Citizens and legal entities shall be free in concluding a contract.

Coercion to conclude a contract shall not be permitted except for instances when the duty to conclude a contract has been provided for by this Code, by a law, or by a voluntarily accepted obligation.

2. The parties may conclude a contract which is either provided for or is not provided for by a law or other legal acts.

3. The parties may conclude a contract which contains elements of various contracts provided for by a law or other legal acts (mixed contact). The rules on contracts whose elements are contained in a mixed contract shall apply in respective parts to the relations of the parties under a mixed contract unless it follows otherwise from the agreement of the parties or the essence of the mixed contract.

4. The conditions of a contract shall be determined at discretion of the parties except for instances when the content of the respective condition has been prescribed by a law or other legal acts (Article 422).

In instances when a condition of a contract has been provided for by a norm which applies insofar as not established otherwise by agreement of the parties (dispositive norm), the parties may by their agreement exclude the application thereof or establish a condition which differs from that provided therein. In the absence of such agreement, the condition of the contract shall be determined by the dispositive norm.

5. If a condition of a contract has not been determined by the parties or by a dispositive norm, the respective conditions shall be determined by the customs of business usage applicable to the relations of the parties.

Article 422. Contract and Law.

1. A contract must correspond to rules established by a law and other legal acts (imperative norms) which are binding upon the parties and prevailing at the moment of its conclusion.

2. If after the conclusion of a contract a law is adopted which establishes rules binding upon the parties other than those in force when the contract was concluded, the conditions of the contract concluded shall retain force except for instances when it is established in the law that its effect extends to relations which arose from the contracts previously concluded on.