Russian contract law

General provisions for the formation of contracts are included in chapter 28 of the civil code. see for an English translation.

Theoretical Categories of Contract
In theory of Russian contract law all contracts are subdivided into two groups on the ground of moment of establishing rights and duties: consensual and real.

Consensual
In consensual contracts, which take their name from latin «consensus» (consent), rights and duties arise in that moment when parties reach agreement about all essential terms of a contract. The examples of consensual contracts are: 1. Contract of Sale By contract of sale one party (the seller) shall undertake to convey a thing (commodity) to the ownership of the other party (buyer), while the buyer shall undertake to accept this commodity and pay a definite amount of money (price) therefor (item 1 of Article 454 of Civil Code of Russian Federation) 2. Lease agreement Under the lease agreement (contract for lease of property) the lessor shall undertake to furnish to the leaseholder (hirer) property for charge in temporary possession and use or in temporary use (Article 606 of Civil Code of Russian Federation)

Real
In real contracts, which take their name from the latin «res» (thing), both agreement of parties and an act of transferring the thing under the contract are required to create legal rights and duties. If, in conformity with the law, the transfer of the property is also required for the conclusion of the contract, it shall be regarded as concluded from the moment of the transfer of the corresponding property (article 433 of Civil Code of Russian Federation) The examples of real contracts are: Loan Agreements Under a loan agreement, one party (the lender) shall transfer into the ownership of the other party (borrower) money or things marked by generic features, while the borrower shall undertake to return to the lender the same sum of money (the loan amount) or an equal quantity of things of the same type and quality. A loan agreement shall be deemed concluded from the moment the money or things are transferred (item 1 of Article 307 of Civil Code of Russian Federation ) However, to precisely understand the nature of a contract it is necessary to know all the legislation relating to it, not merely the legal definition. That’s why this subdivision of contracts is a matter of discussion, and also why there are differing interpretations in law theory and practice. Amendments to the Civil Law of Russian Federation may result in changes to division of contracts into consensual and real.

Arguments which can be used to show that a contract does not exist
(Grounds end examples to regard contract as insignificant)

Illegality of the form
The non-observance of the notarial form of the deal and, in the law-stipulated cases (e.g. Contract about mortgage), of the requirement for its state registration, shall entail its invalidity. Such kind of the deal shall be regarded as insignificant. (clause 1 Article 165 of CC of RF) In cases where the donor is represented by a legal entity and the value of the gift exceeds 3000 rubles; the contract contains the promise of donation in the future and such donation contract made orally shall be null and void (clause 2 Article 574)

Illegality of the subject matter
The deal, which has been aimed at the goal, flagrantly contrary to the foundations of the law and order, or of morality, shall be regarded as insignificant. (clause 1 Article 169 of CC of RF)

The agreement of the partnership participants on the restriction or elimination of the responsibility, stipulated in the present Article, shall be insignificant (clause 3 Article 75 of CC of RF)

The sham deal
, i.e., the deal, effected only for the form's sake, without an intention to create the legal consequences, corresponding to it, shall be regarded as insignificant (for example when concluded Contract of Work and Labour has performance by customer at the expenses of customer).

The feigned deal
i.e., the deal, which has been effected for the purpose of screening another deal, shall be regarded as insignificant (for example if the party conclude the contract of Sale without paying a price) (Article 170 of CC of RF) An agreement, restricting the pledger's right to bequeath the pledged property, shall be insignificant(clause 2 Article 346 of CC of RF) The contract stipulating the transfer of a gift to the donee after the death of the donor shall be null and void. (clause 3 Article 572 of CC of RF) Insurance of interests contrary to law, insurance of losses from the participation in games, lotteries and bets, insurance of expenditure to which a person can be compelled for the purpose of setting hostages free shall be null and void (Article 928 of CC of RF).

Illegality of the party
The deal, effected by the citizen, who has been recognized as legally incapable on account of a mental derangement, shall be regarded as insignificant (clause 1 Article 171 of CC of RF)