Effect

Article 54
Either party has the right to request a people's court or an arbitration institution to alter or rescind any of the following contracts:
1. any contract which is made under substantial misunderstanding; or
2. any contract the making of which lacks fairness. Where a party makes the other party enter into a contract against its true will by means of deceit, coercion or taking advantage of its difficulties, the injured party has the right to request a people's court or an arbitration institution to alter or rescind the contract. Where the request of the party is an alteration to the contract, the people's court or arbitration institution shall not rescind it.
Article 55
The right to rescind shall vanish where:
1. the party with the right to rescind has not exercised it within a year from the date on which it was aware or ought to be aware of the matter for the rescission; or
2. the party with the right to rescind waivers its right by express indication or by its own act after it was aware of the matter for the rescission.
Article 56
An invalid or rescinded contract does not have legal binding force from the outset. If a part of a contract becomes invalid without affecting the validity of the other parts, the other parts remain valid.
Article 57
If a contract becomes invalid, or is rescinded or terminated, the validity of its independently existing clauses pertaining to the settlement of disputes shall not be affected.
Article 58
After a contract becomes invalid or is rescinded, any property obtained under the contract shall be returned. If it is impossible or unnecessary to return the property, compensation shall be made at an estimated price. The party at fault shall compensate the other party for the loss caused by the fault. If both parties have faults, they shall bear their respective responsibilities.
Article 59
If the parties impair by malicious conspiracy the interest of the State, of the collective or of a third party, the property they have thus obtained shall be returned to the State, the collective or the third party.
Article 4.106 (ex art. 6.106) - Incorrect information 226
A party who has concluded a contract relying on incorrect information given it by the other party may recover damages in accordance with Article 4.117(2) and (3) even if the information does not give rise to a right to avoid the contract on the ground of mistake under Article 4.103, unless the party who gave the information had reason to believe that the information was correct. 227
Article 4.109 (ex art. 6.109) - Excessive benefit or unfair advantage 241
(1) A party may avoid a contract if, at the time of the conclusion of the contract: 242
(a) it was dependent on or had a relationship of trust with the other party, was in economic distress or had urgent needs, was improvident, ignorant, inexperienced or lacking in bargaining skill, and 243
(b) the other party knew or ought to have known of this and, given the circumstances and purpose of the contract, took advantage of the first party's situation in a way which was grossly unfair or took an excessive benefit. 244
(2) Upon the request of the party entitled to avoidance, a court may if it is appropriate adapt the contract in order to bring it into accordance with what might have been agreed had the requirements of good faith and fair dealing been followed. 245
(3) A court may similarly adapt the contract upon the request of a party receiving notice of avoidance for excessive benefit or unfair advantage, provided that this party informs the party who gave the notice promptly after receiving it and before that party has acted in reliance on it. 246
Article 4.112 (ex art. 6.112) - Notice of Avoidance 266
Avoidance must be by notice to the other party. 267
Article 4.113 (ex art. 4.113) - Time limits 268
(1) Notice of avoidance must be given within a reasonable time, with due regard to the circumstances, after the avoiding party knew or ought to have known of the relevant facts or became capable of acting freely. 269
(2) However, a party may avoid an individual term under Article 4.110 if it gives notice of avoidance within a reasonable time after the other party has invoked the term. 270
Article 4.114 (ex art. 6.114) - Confirmation 271
If the party who is entitled to avoid a contract confirms it, expressly or impliedly, after it knows of the ground for avoidance, or becomes capable of acting freely, avoidance of the contract is excluded. 272
Article 4.115 (ex art. 6.116) - Effect of avoidance 273
On avoidance either party may claim restitution of whatever he has supplied under the contract or the part of it avoided, provided he makes concurrent restitution of whatever he has received under the contract or the part of it avoided. If restitution cannot be made in kind for any reason, a reasonable sum must be paid for what has been received. 274
Article 4.116 (ex art. 6.115) - Partial avoidance 275
If a ground of avoidance affects only particular terms of a contract, the effect of an avoidance is limited to those terms unless, giving due consideration to all the circumstances of the case, it is unreasonable to uphold the remaining contract. 276
Article 4.117 (ex art. 6.117) - Damages 277
(1) A party who avoids a contract under this Chapter may recover from the other party damages so as to put the avoiding party as nearly as possible into the same position as if it had not concluded the contract, provided that the other party knew or ought to have known of the mistake, fraud, threat or taking of excessive benefit or unfair advantage. 278
(2) If a party has the right to avoid a contract under this Chapter, but does not exercise its right or has lost its right under the provisions of Articles 4.113 or 4.114, it may recover, subject to paragraph (1), damages limited to the loss caused to it by the mistake, fraud, threat or taking of excessive benefit or unfair advantage. The same measure of damages shall apply when the party was misled by incorrect information in the sense of Article 4.106. 279
(3) In other respects, the damages shall be in accordance with the relevant provisions of Chapter 9, Section 5, with appropriate adaptations. 280
Article 4.118 (ex. art. 6.118) - Exclusion or restriction of remedies 281
(1) Remedies for fraud, threats and excessive benefit or unfair advantage-taking, and the right to avoid an unfair term which has not been individually negotiated, cannot be excluded or restricted. 282
(2) Remedies for mistake and incorrect information may be excluded or restricted unless the exclusion or restriction is contrary to good faith and fair dealing. 283
Article 4.119 (ex art. 6.119) - Remedies for non-performance 284
A party who is entitled to a remedy under this Chapter in circumstances which afford that party a remedy for non-performance may pursue either remedy. 285
§85 Promise to Perform a Voidable Duty
§85 Promise to Perform a Voidable Duty
Except as stated in § 93, a promise to perform all or part of an antecedent contract of the promisor, previously voidable by him, but not avoided prior to the making of the promise, is binding.
§ 155 When Mistake of Both Parties as to Written Expression Justifies Reformation
Where a writing that evidences or embodies an agreement in whole or in part fails to express the agreement because of a mistake of both parties as to the contents or effect of the writing, the court may at the request of a party reform the writing to express the agreement, except to the extent that rights of third parties such as good faith purchasers for value will be unfairly affected.
§ 156 Mistake as to Contract Within the Statute of Frauds If reformation of a writing is otherwise appropriate, it is not precluded by the fact that the contract is within the Statute of Frauds.
§ 157 Effect of Fault of Party Seeking Relief
A mistaken party's fault in failing to know or discover the facts before making the contract does not bar him from avoidance or reformation under the rules stated in this Chapter, unless his fault amounts to a failure to act in good faith and in accordance with reasonable standards of fair dealing.
§ 158 Relief Including Restitution
§ 158 Relief Including Restitution
§ 158 Relief Including Restitution
(1) In any case governed by the rules stated in this Chapter [mistake], 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]
Topic 5 – Restitution
§ 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
(a) 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
(b) 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
(a) he withdraws from the transaction before the improper purpose has been achieved, or
(b) allowance of the claim would put an end to a continuing situation that is contrary to the public interest
§ 376 Restitution When Contract Is Voidable
§ 376 Restitution When Contract Is Voidable
A party who has avoided a contract on the ground of lack of capacity, mistake, misrepresentation, duress, undue influence or abuse of a fiduciary relation is entitled to restitution for any benefit that he has conferred on the other party by way of part performance or reliance.
§ 380 Loss of Power of Avoidance by Affirmance
(1) The power of a party to avoid a contract for incapacity, duress, undue influence or abuse of a fiduciary relation is lost if, after the circumstances that made the contract voidable have ceased to exist, he manifests to the other party his intention to affirm it or acts with respect to anything that he has received in a manner inconsistent with disaffirmance.
(2) The power of a party to avoid a contract for mistake or misrepresentation is lost if after he knows or has reason to know of the mistake or of the misrepresentation if it is non-fraudulent or knows of the misrepresentation if it is fraudulent, he manifests to the other party his intention to affirm it or acts with respect to anything that he has received in a manner inconsistent with disaffirmance.
(3) If the other party rejects an offer by the party seeking avoidance to return what he has received, the party seeking avoidance if entitled to restitution can, after the lapse of a reasonable time, enforce a lien on what he has received by selling it and crediting the proceeds toward his claim in restitution.
§ 381 Loss of Power of Avoidance by Delay
(1) The power of a party to avoid a contract for incapacity, duress, undue influence or abuse of a fiduciary relation is lost if, after the circumstances that made it voidable have ceased to exist, he does not within a reasonable time manifest to the other party his intention to avoid it.
(2) The power of a party to avoid a contract for misrepresentation or mistake is lost ifafter he knows of a fraudulent misrepresentation or knows or has reason to know of a non-fraudulent misrepresentation or mistake he does not within a reasonable time manifest to the other party his intention to avoid it. The power of a party to avoid a contract for non-fraudulent misrepresentation or mistake is also lost if the contract has been so far performed or the circumstances have otherwise so changed that avoidance would be inequitable and if damages will be adequate compensation.
(3) In determining what is a reasonable time, the following circumstances are significant:
(a) the extent to which the delay enabled or might have enabled the party with the power of avoidance to speculate at the other party's risk;
(b) the extent to which the delay resulted or might have resulted in justifiable reliance by the other party or by third persons;
(c) the extent to which the ground for avoidance was the result of any fault by either party; and (d) the extent to which the other party's conduct contributed to the delay.
(4) If a right or duty of the party who has the power of avoidance for non-fraudulent misrepresentation or mistake is conditional on an event that is fortuitous or is supposed by the parties to be fortuitous, a manifestation of intention under Subsection (1) or (2) is not effective unless it is made before any adverse change in his situation resulting from the occurrence of that event or a material change in the probability of its occurrence.
§ 382 Loss of Power to Affirm by Prior Avoidance
(1) If a party has effectively exercised his power of avoidance, a subsequent manifestation of intent to affirm is inoperative unless the other party manifests his assent to affirmance by refusal to accept a return of his performance or otherwise.
(2) A party has not exercised his power of avoidance under the rule stated in Subsection (1) until
(a) he has regained all or a substantial part of what he would be entitled to by way of restitution on avoidance,
(b) he has obtained a final judgment of or based on avoidance, or
(c) the other party has materially relied on or manifested his assent to a statement of disaffirmance.
§ 383 Avoidance in Part
A contract cannot be avoided in part except that where one or more corresponding pairs of part performances have been fully performed by one or both parties the rest of the contract can be avoided.
§ 384 Requirement That Party Seeking Restitution Return 
(1) Except as stated in Subsection
(2), a party will not be granted restitution unless
(a) he returns or offers to return, conditional on restitution, any interest in property that he has received in exchange in substantially as good condition as when it was received by him, or
(b) the court can assure such return in connection with the relief granted.
(2) The requirement stated in Subsection (1) does not apply to property
(a) that was worthless when received or that has been destroyed or lost by the other party or as a result of its own defects,
(b) that either could not from the time of receipt have been returned or has been used or disposed of without knowledge of the grounds for restitution if justice requires that compensation be accepted in its place and the payment of such compensation can be assured, or
(c) as to which the contract apportions the price if that part of the price is not included in the claim for restitution.
§ 385 Effect of Power of Avoidance on Duty of Performance or on Duty Arising Out of Breach
(1) Unless an offer to restore performance received is a condition of avoidance, a party has no duty of performance while his power of avoidance exists.
(2) If an offer to restore performance received is a condition of avoidance, a duty to pay damages is terminated by such an offer made before the power of avoidance is lost.

Article 167. General Provisions on Consequences of Invalidity of Transaction

1. An invalid transaction shall not entail legal consequences, except for those which are connected with its invalidity, and it shall be invalid from the moment of its conclusion.
2. In the event a transaction is invalid, each of the parties shall be obliged to return to the other everything received under the transaction, and if it is impossible to return that received in kind (including when the received is expressed in the use of property, a job performed, or a service provided), to compensate its value in money, unless other consequences of the invalidity of the transaction have been provided for by a law.
3. If it follows from the content of a contested transaction that it may be only terminated for the future time, the court when deeming the transaction to be invalid shall terminate its validity for the future.
Article 171. Invalidity of Transaction Concluded by Citizen Deemed to Lack Active Capacity
1. A transaction concluded by a citizen deemed to lack active capacity as a consequence of mental disorder shall be null. Each of the parties to such a transaction shall be obliged to return to the other everything received in kind, and if it is impossible to return that received in kind, to compensate its value in money. The party having active capacity shall be obliged, in addition, to compensate the other party for the real damage incurred by it, if the actively capable party knew or should have known about the incapacity of the other party.
2. In the interests of a citizen deemed to lack active capacity as a consequence of mental disorder, the transaction concluded by him may, at the demand of his trustee, be deemed by a court to be valid if it was concluded to the advantage of this citizen.
Article 172. Invalidity of Transaction Concluded by Minor Under Fourteen Years of Age
1. A transaction concluded by a minor who has not reached fourteen years of age (youth) shall be null. To such transaction shall apply the rules provided for by Article 171(1), paragraphs two and three, of this Code.
2. In the interests of the youth, a transaction concluded by him may at the demand of his parents, adoptive parents, or trustee be deemed by a court to be valid if it was concluded to the advantage of the youth.
3. The rules of this Article shall not extend to petty domestic and other transactions of youth which they have the right to conclude on their own in accordance with Article 28 of this Code.
Article 175. Invalidity of Transaction Concluded by Minor from Fourteen to Eighteen Years of Age
1. A transaction concluded by a minor from fourteen to eighteen years of age without the consent of his parents, adoptive parents, or guardian in the instances when such consent is required in accordance with Article 26 of this Code may be deemed by a court to be invalid upon the suit of the parents, adoptive parents, or guardian. If such transaction has been deemed to be invalid, the rules provided for by Article 171(1), paragraphs two and three, of this Code shall apply respectively.
2. The rules of this Article shall not extend to transactions of minors who have come to have full active capacity.
Article 176. Invalidity of Transaction Concluded by Citizen Limited by Court in Active Capacity
1. A transaction relating to the disposition of property concluded without the consent of the guardian by a citizen limited by a court in active capacity as a consequence of alcohol or drug abuse may be deemed by a court to be invalid upon the suit of the guardian. If such transaction has been deemed to be invalid, the rules provided for by Article 171(1), paragraphs two and three, of this Code shall apply respectively.
2. The rules of this Article shall not extend to petty domestic transactions which a citizen limited in active capacity has the right to conclude on his own in accordance with Article 30 of this Code.
Article 177. Invalidity of Transaction Concluded by Citizen Not Capable to Understand the Purport of His Actions and Directing Them
1. A transaction concluded by a citizen, although having active capacity but at the moment of concluding it being in a state when he was not capable to understand the purport of his actions or to direct them, may be deemed by a court to be invalid upon the suit of this citizen or other persons whose rights or interests protected by law have been violated as a result of the conclusion thereof.
2. A transaction concluded by a citizen who is subsequently deemed to lack active capacity may be deemed by a court to be invalid upon the suit of the trustee if it can be proved that at the moment of concluding the transaction the citizen was not capable of understanding the import of his actions or directing them.
3. If a transaction is deemed to be invalid on the grounds of this Code, the rules provided for by Article 171(1), paragraphs two and three, of this Code shall apply respectively.
Article 178. Invalidity of Transaction Concluded under Influence of Delusion
1. A transaction concluded under the influence of delusion having material significance may be deemed by a court to be invalid upon the suit of the party which acted under the influence of delusion. Delusion as to the nature of a transaction, the identity, or such qualities of its subject which considerably reduce the possibility of using it for its purpose shall have material significance. Delusion as to the motives of a transaction shall not have material significance.
2. If a transaction is deemed to be invalid as concluded under the influence of delusion, the rules provided for by Article 167(2) of this Code shall apply respectively. In addition, the party upon whose suit the transaction was deemed to be invalid shall have the right to demand from the other party compensation for real damage caused to it if it is proved that the delusion arose through the fault of the other party. If it not proved, the party at whose suit the transaction was deemed to be invalid shall be obliged to compensate the other party at its demand for real damage caused to it even if the delusion arose through circumstances beyond the control of the deluded party.
Article 179. Invalidity of Transaction Concluded Under Influence of Fraud, Coercion, Threat, or Ill- Intentioned Agreement of Representative of One Party with Other Party or Coincidence of Grave Circumstances
1. A transaction concluded under the influence of fraud, coercion, threat, or ill-intentioned agreement between a representative of one party with the other party, as well as a transaction which a person was forced to conclude as a consequence of the coincidence of grave circumstances on conditions extremely disadvantageous for himself which the other party took advantage of (transaction on crushing terms) may be deemed by a court to be invalid upon the suit of the victim.
2. If the transaction was deemed invalid on one of the grounds specified in point 1 of this Article, then the other party shall return to the victim everything received by it under the transaction, and if it is impossible to return that received in kind, the value thereof shall be compensated in money. Property received under a transaction by the victim from the other party, as well as that due to it in compensation for what was transferred to the other party, shall go to the revenue of the Russian Federation. If it is impossible to transfer the property to the revenue of the Russian Federation in kind, the value thereof in money shall be recovered. In addition, the other party shall compensate the victim for real damage caused to it.
Article 180. Consequences of Invalidity of Part of Transaction
The invalidity of part of a transaction shall not entail the invalidity of its other parts if it is possible to suppose that the transaction would have been well concluded without including the invalid part thereof.
Article 181. Periods of Limitation for Invalid Transactions
1. A suit concerning the application of consequences of the invalidity of a null transaction may be filed within ten years from the date when the fulfillment thereof commenced.
2. A suit to deem a contested transaction to be invalid and concerning the application of the consequences of its invalidity may be filed within a year from the date of the termination of the coercion or threat under whose influence the transaction was concluded (Article 179[1]), or from the date when the plaintiff learnt or should have learnt about other circumstances which are the grounds for deeming the transaction to be invalid.