Division of Invalid Transactions into Null and Voidable in CivilLaw: Ideas and Results of the Russian Civil Code Reform

Abstract

As a result of the reform of the Russian Civil Code the rules on the invalidity of transactions were significantlychanged. The new legal regulation does not fully reflect the ideas that were put forward in thedevelopment of the Concept of development of civil law. The article analyzes the main changes in thelegal regulation of the invalidity of transactions and gives assessment of the results of the Civil Codereform. It concludes about inconsistency and incompleteness of the new rules, which, on the one hand, bring together legal regimes of null and voidable transactions, and on the other retain their legal differentiation.Preserving division of invalid transactions into the null and voidable at unifying their legal regimescreates additional problems of their qualification and involves the expansion of opportunities forinvalidation of transactions that are not consistent with the purposes of reform. The new common ruleson invalidity of transactions contain a huge negative potential, the use of which by dishonest personscould undermine the stability of civil turnover even more than it was in the pre-reform period. In particular,the number of kinds of null transactions increased; too broadly interpreted concept of transactionswhich violate the public interest; the requirement to invalidate voidable transactions may declare anyparty to the transaction in connection with violation of any legal requirements, etc. The article proposesto refuse legal division of invalid transactions into the null and voidable. It is proposed to establish asingle legal regime for all invalid transactions (null, voidable, failed ones), based on the presumption ofthe validity of any of the transaction resulting from the presumption of good faith and reasonablenessof any actions of the participants of civil turnover. The presumption of the validity of any transaction canbe rebutted only by a court. The legal regime of contesting transactions should be differentiated notby type of invalidity, but in accordance with the particular composition of certain invalid transactions.