THE CIVIL CODE OF THE RUSSIAN FEDERATION
(Parts One, Two and Three)
(with the Additions and Amendments of February 20, August 12, 1996,
October 24, 1997, July 8, December 17, 1999, April 16, May 15,
November 26, 2001, March 21, November 14, 26, 2002,
January 10, March 26, November 11, December 23, 2003)
Part One
Section I. The General Provisions (Articles 1-208)
Subsection 1. The Basic Provisions (Articles 1-16)
Chapter 1. The Civil Legislation (Articles 1-7)
Chapter 2. Arising of the Civil Rights and (Articles 8-16)
Duties, Exercising and Protection
of the Civil Rights
Subsection 2. The Persons (Articles 17-127)
Chapter 3. The Citizens (Natural Persons) (Articles 17-47)
Chapter 4. The Legal Entities (Articles 48-123)
§ 1. The Basic Provisions (Articles 48-65)
§ 2. The Economic Partnerships and Co- (Articles 66-106)
mpanies
1. The General Provisions (Articles 66-68)
2. The General Partnership (Articles 69-81)
3. The Limited Partnership (Articles 82-86)
4. The Limited Liability Company (Articles 87-94)
5. The Double Liability Company (Article 95)
6. The Joint-Stock Company (Articles 96-104)
7. The Subsidiary and Dependent Co- (Articles 105-106)
mpanies
§ 3. The Production Cooperatives (Articles 107-112)
§ 4. The State-Run and Municipal (Articles 113-115)
Unitary Enterprises
§ 5. The Non-Profit Organizations (Articles 116-123)
Chapter 5. Participation of the Russian Fede- (Articles 124-127)
ration, of the Subjects of the
Russian Federation and of the Mu-
nicipal Entities in the Relation-
ships, Regulated by the Civil Le-
gislation
Subsection 3. The Objects of Civil Rights (Articles 128-152)
Chapter 6. The General Provisions (Articles 128-141)
Chapter 7. The Securities (Articles 142-149)
Chapter 8. The Non-Material Values and Their (Articles 150-152)
Protection
Subsection 4. The Deals and the Representation (Articles 153-189)
Chapter 9. The Deals (Articles 153-181)
§ 1. The Concept, the Kinds and the (Articles 153-165)
Form of the Deals
§ 2. The Invalidity of the Deals (Articles 166-181)
Chapter 10. The Representation. The Warrant (Articles 182-189)
Subsection 5. The Term. The Limitation of Actions (Articles 190-208)
Chapter 11. The Counting of the Term (Articles 190-194)
Chapter 12. The Limitation of Actions (Articles 195-208)
Section II. The Right of Ownership and the Other (Articles 209-306)
Rights of Estate
Chapter 13. The General Provisions (Articles 209-217)
Chapter 14. The Acquisition of the Right of (Articles 218-234)
Ownership
Chapter 15. The Cessation of the Right of Ow- (Articles 235-243)
nership
Chapter 16. The Common Property (Articles 244-259)
Chapter 17. The Right of Ownership and the (Articles 260-287)
Other Rights of Estate to the Land
Chapter 18. The Right of Ownership and the (Articles 288-293)
Other Rights of Estate to the Li-
ving Quarters
Chapter 19. The Right of Economic Management (Articles 294-300)
and the Right of Operation Mana-
gement
Chapter 20. Protection of the Right of Ownership (Articles 301-306)
and of the Other Rights of Estate
Section III. The General Part of the Law of Obliga- (Articles 307-453)
tion
Subsection 1. The General Provisions on Obligati- (Articles 307-419)
ons
Chapter 21. The Concept and the Aspects of an (Articles 307-308)
Obligation
Chapter 22. The Discharge of Obligations (Articles 309-328)
Chapter 23. Providing for the Discharge of (Articles 329-381)
Obligations
§ 1. The General Provisions (Article 329)
§ 2. The Forfeit (Articles 330-333)
§ 3. The Pledge (Articles 334-358)
§ 4. The Retention (Articles 359-360)
§ 5. The Surety (Articles 361-367)
§ 6. The Bank Guarantee (Articles 368-379)
§ 7. The Advance (Articles 380-381)
Chapter 24. The Substitution of Persons in an (Articles 382-392)
Obligation
§ 1. The Transfer of the Creditor's (Articles 382-390)
Rights to Another Person
§ 2. The Transfer of the Debt (Articles 391-392)
Chapter 25. Responsibility for the Violation (Articles 393-406)
of Obligations
Chapter 26. The Termination of Obligations (Articles 407-419)
Subsection 2. The General Provisions on the Co- (Articles 420-453)
ntract
Chapter 27. The Concept and the Terms of the (Articles 420-431)
Contract
Chapter 28. The Conclusion of the Contract (Articles 432-449)
Chapter 29. The Amendment and the Cancellation (Articles 450-453)
of the Contract
Part Two
Section IV. Particular Kinds of Obligations (Articles 454-1109)
Chapter 30. Purchase and Sale (Articles 454-566)
§ 1. General Provisions on Purchase and (Articles 454-491)
Sale
§ 2. Retail Sale (Articles 492-505)
§ 3. Delivery of Goods (Articles 506-524)
§ 4. Delivery of Goods for State Needs (Articles 525-534)
§ 5. Sale of Agricultural Produce (Articles 535-538)
§ 6. Power Supply (Articles 539-548)
§ 7. The Sale of Real Estate (Articles 549-558)
§ 8. The Sale of Enterprises (Articles 559-566)
Chapter 31. Barter (Articles 567-571)
Chapter 32. Donation (Articles 572-582)
Chapter 33. Rent and Life Maintenance with De- (Articles 583-605)
pendence
§ 1. General Provisions on Rent and Life (Articles 583-588)
Maintenance with Dependence
§ 2. Permanent Rent (Articles 589-595)
§ 3. Life Annuity (Articles 596-600)
§ 4. Life Maintenance with Dependency (Articles 601-605)
Chapter 34. Lease (Articles 606-670)
§ 1. General Provisions on Lease (Articles 606-625)
§ 2. Hire (Articles 626-631)
§ 3. Lease of Transport Vehicles (Articles 632-649)
1. Lease of a Transport Vehicle with (Articles 632-641)
the Provision of Services for Dri-
ving and Technical Operation
2. The Lease of a Transport Vehicle (Articles 642-649)
Without Driving and Technical Ope-
ration Services
§ 4. The Lease of Buildings and Struc- (Articles 650-655)
tures
§ 5. The Lease of Enterprises (Articles 656-664)
§ 6. Financial Lease (Leasing) (Articles 665-670)
Chapter 35. The Renting of Living Accommodation (Articles 671-688)
Chapter 36. Gratuitous Use (Articles 689-701)
Chapter 37. Contract of Hiring Work (Articles 702-768)
§ 1. General Provisions on Contract of (Articles 702-729)
Hiring Work
§ 2. The Domestic Contract (Articles 730-739)
§ 3. The Building Contract (Articles 740-757)
§ 4. Contract for Design and Survey (Articles 758-762)
Works
§ 5. Contract Works for State Needs (Articles 763-768)
Chapter 38. Performance of Research and Deve- (Articles 769-778)
lopment and Technological Works
Chapter 39. The Repayable Rendering of Services (Articles 779-783)
Chapter 40. Carriage (Articles 784-800)
Chapter 41. Transport Forwarding (Articles 801-806)
Chapter 42. Loans and Credits (Articles 807-833)
§ 1. Loans (Articles 807-818)
§ 2. Credit (Articles 819-821)
§ 3. Credit Against Goods and Commer- (Articles 822-823)
cial Credit
Chapter 43. Financing Against the Assignment of (Articles 824-833)
a Monetary Claim
Chapter 44. Bank Deposit (Articles 834-844)
Chapter 45. Bank Account (Articles 845-860)
Chapter 46. Payments (Articles 861-885)
§ 1. General Provisions on Payments (Articles 861-862)
§ 2. Payments by Written Order (Articles 863-866)
§ 3. Payments by Letters of Credit (Articles 867-873)
§ 4. Payments for Collection (Articles 874-876)
§ 5. Payments by Cheques (Articles 877-885)
Chapter 47. Storage (Articles 886-926)
§ 1. General Provisions on Storage (Articles 886-906)
§ 2. Warehousing (Articles 907-918)
§ 3. Special Kinds of Storage (Articles 919-926)
Chapter 48. Insurance (Articles 927-970)
Chapter 49. Agency (Articles 971-979)
Chapter 50. Actions in the Interest of Other (Articles 980-989)
People Without Commission
Chapter 51. Commission (Articles 990-1004)
Chapter 52. Agency Service (Articles 1005-1011)
Chapter 53. Trust of Estate (Articles 1012-1026)
Chapter 54. The Commercial Concession (Articles 1027-1040)
Chapter 55. Particular Partnership (Articles 1041-1054)
Chapter 56. Public Promise of a Reward (Articles 1055-1056)
Chapter 57. Public Competition (Articles 1057-1061)
Chapter 58. Gaming and Betting (Articles 1062-1063)
Chapter 59. Liabilities for Damage (Articles 1064-1101)
§ 1. General Provisions in the Redress (Articles 1064-1083)
of Injury
§ 2. The Redress of the Injury Inflicted (Articles 1084-1094)
on the Life or Health of an Indivi-
dual
§ 3. The Redress of the Injury Inflicted (Articles 1095-1098)
by Defects in Goods, Works or Ser-
vices
§ 4. Compensation for the Moral Damage (Articles 1099-1101)
Chapter 60. Obligations Due to Unjust Enrichment (Articles 1102-1109)
Part Three
Section V. Law of Succession (Articles 1110-1185)
Chapter 61. General Provisions Governing
Succession
Chapter 62. Succession by Will (Articles 1110-1117)
Chapter 63. Succession by Operation of Law (Articles 1110-1117)
Chapter 64. Acquisition of Inheritance (Articles 1118-1140)
Chapter 65. Succession of Specific Types of (Articles 1110-1117)
Assets
Section VI. International Private Law (Articles 1186-1224)
Chapter 66. General Provisions (Articles 1186-1194)
Chapter 67. The Law Governing Determination (Articles 1195-1204)
of the Legal Status of Persons
Chapter 68. The Law Governing Proprietary (Articles 1205-1224)
and Personal Non-Proprietary
Relations
The Federal Law of the Russian Federation No. 52-FZ of November 30, 1994
on Putting in Force Part One of the Civil Code of the Russian Federation
The Federal Law of the Russian Federation No. 15-FZ of January 26, 1996
on Putting in Force Part Two of the Civil Code of the Russian Federation
Federal Law No. 147-FZ of the Russian Federation of November 26, 2001
on Putting Into Force Part 3 of the Civil Code of the Russian Federation
Part One
Section I. The General Provisions
Subsection 1. The Basic Provisions
Chapter 1. The Civil Legislation
Article 1. Chief Principles of the Civil Legislation
1. The civil legislation shall be based on recognizing the equality
of participants in the relationships regulated by it, the inviolability
of property, the freedom of agreement, the inadmissibly of anybody's
arbitrary interference into the private affairs, the necessity to freely
exercise the civil rights, the guarantee of the reinstatement of the
civil rights in case of their violation, and their protection in the
court.
2. The citizens (natural persons) and the legal entities shall
acquire and exercise their civil rights of their own free will and in
their own interest. They shall be free to establish their rights and
duties on the basis of an agreement and to define any terms of the
agreement, which are not in contradiction with legislation.
The civil rights may be restricted on the basis of the Federal Law
and only to the extent, to which it shall be necessary for the purposes
of protecting the foundations of the constitutional system, morality, the
health, the rights and the lawful interests of other persons, of
providing for the defence of the country and for the state security.
3. The commodities, services and financial means shall move
unhindered throughout the entire territory of the Russian Federation.
Restrictions on the movement of commodities and services shall be imposed
in conformity with the Federal Law, if this is necessary to provide for
security, and to protect the human life and health, the environment and
the cultural benefits.
Article 2. Relations Regulated by the Civil Legislation
1. The civil legislation shall define the legal status of the
participants in the civil turnover, the grounds for the emergence and the
order of exercising the right of ownership and the other rights of
estate, the exclusive right to the results of the intellectual activity
(intellectual property); it shall regulate the contractual and other
obligations, as well as the other property and personal non-property
relations related to the former, based on the equality, the autonomous
will and the property independence of their participants.
Both the citizens and the legal entities may be the participants of
the relations, regulated by the civil legislation. The Russian
Federation, the subjects of the Russian Federation and the municipal
entities may also participate in the relations, regulated by the civil
legislation (Article 124).
The civil legislation shall regulate relations between the persons,
engaged in business activities or in those performed with their
participation, proceeding from the fact that the business activity shall
be an independent activity, performed at one's own risk, aimed at
systematically deriving a profit from the use of the property, the sale
of commodities, the performance of work or the rendering of services by
the persons, registered in this capacity in conformity with the
law-established procedure.
The rules, laid down by the civil legislation, shall be applied
toward relations with the participation of foreign citizens, of persons
without any citizenship, and also of foreign legal entities, unless
otherwise stipulated by the Federal Law.
2. The inalienable human rights and freedoms, and the other
non-material values shall be protected by the civil legislation, unless
otherwise following from the substance of these non-material values.
3. Unless otherwise stipulated by legislation, the civil legislation
shall not be applied toward the property relations, based on the
administrative or the other kind of authoritative subordination of one
party to the other party, including toward the taxation and other
financial or administrative relations.
Article 3. The Civil Legislation and the Other Acts, Containing the
Civil Legislation Norms
1. In conformity with the Constitution of the Russian Federation,
the civil legislation shall be within the jurisdiction of the Russian
Federation.
2. The civil legislation shall be comprised of the present Code and
of the federal laws (hereinafter referred to as the laws), adopted in
conformity with it, which regulate the relations, indicated in Items 1
and 2 of Article 2 of the present Code.
The norms of the civil legislation, contained in the other laws,
shall correspond to the present Code.
3. The relations, indicated in Items 1 and 2 of Article 2 of the
present Code, shall also be regulated by the Decrees of the President of
the Russian Federation, which shall not be in contradiction with the
present Code and with the other laws.
4. On the grounds and in execution of the present Code and of the
other laws, and of the Decrees of the President of the Russian
Federation, the Government of the Russian Federation shall have the right
to adopt decisions, containing the norms of the civil law.
5. If the Decree of the President of the Russian Federation or the
decision of the Government of the Russian Federation proves to be in
contradiction with the present Code or with the other law, the present
Code or the corresponding law shall be applied.
6. The operation and implementation of the norms of the civil law,
contained in the Decrees of the President of the Russian Federation and
in the decisions of the Government of the Russian Federation (hereinafter
referred to as the other legal acts), shall be defined by the rules of
the present chapter.
7. The ministries and the other federal executive power bodies may
issue the acts, containing the norms of the civil law, in the cases and
within the limits, stipulated by the present Code, by the other laws and
by the other legal acts.
Article 4. Operation of the Civil Legislation in Time
1. The acts of the civil legislation shall not be retroactive and
shall be applied toward the relations, which have arisen after they have
been put in force.
The operation of the law shall be extended toward the relations,
which have arisen before it has been put in force, only in the cases,
directly stipulated by law.
2. Concerning the relations, which have arisen before the civil
legislation act has been put in force, it shall be applied toward the
rights and duties, which have arisen after its being put in force. The
relations of the parties by the agreement, signed before the civil
legislation act has been enforced, shall be regulated in conformity with
Article 422 of the present Code.
Article 5. The Customs of the Business Turnover
1. The custom of the business turnover shall be recognized as the
rule of behavior, which has taken shape and is widely applied in a
certain sphere of business activities, and which has not been stipulated
by legislation, regardless of whether it has or has not been fixed in any
one document.
2. The customs of the business turnover, contradicting to the
provisions of legislation or to the agreement, obligatory for the
participant in the given relationship, shall not be applied.
Article 6. Application of the Civil Legislation by Analogy
1. In cases when the relations, stipulated in Items 1 and 2 of
Article 2 of the present Code are not directly regulated by legislation
or by an agreement between the parties, while the custom of the business
turnover that would be applicable to them does not exist, and if this is
not in contradiction with their substance, the civil legislation shall be
applied, which regulates similar relations (the analogy of the law).
2. If it is impossible to apply the similar law, the rights and
duties of the parties shall be defined, proceeding from the general
principles and the meaning of the civil legislation (the analogy of the
right), and also from the requirements of honesty, wisdom and justice.
Article 7. The Civil Legislation and the Norms of International Law
1. The generally recognized principles and norms of international
law and the international treaties of the Russian Federation, shall be,
in conformity with the Constitution of the Russian Federation, a
component part of the legal system of the Russian Federation.
2. The international treaties of the Russian Federation shall be
directly applied toward the relations, indicated in Items 1 and 2 of
Article 2 of the present Code, with the exception of the cases, when it
follows from the international treaty that for it to be applied, a
special intra-state act shall be issued.
If the rules, laid down in the international treaty of the Russian
Federation, differ from those stipulated by the civil legislation, the
rules of the international treaty shall be applied.
Chapter 2. Arising of the Civil Rights and Duties, the Exercising
and Protection of the Civil Rights
Article 8. The Grounds for the Arising of the Civil Rights and
Duties
1. The civil rights and duties shall arise from the grounds,
stipulated by the law and by the other legal acts, as well as from the
actions of the citizens and of the legal entities, which, though not
stipulated by the law or by such acts, still generate, by force of the
general principles and of the meaning of the civil legislation, the civil
rights and duties. In conformity with this, the civil rights and duties
shall arise:
1) from the law-stipulated contracts and other deals, and also from
the contracts and other deals, which, though not stipulated by the law,
are not in contradiction with it;
2) from the acts of the state bodies and of the local
self-government bodies, which are stipulated by the law as the grounds
for the arising of the civil rights and duties;
3) from the court ruling, which has established the civil rights and
duties;
4) as a result of the acquisition of property on the grounds,
admitted by the law;
5) as a result of creating the works of science, literature and art,
of making inventions and producing other results of the intellectual
activity;
6) as a result of inflicting damage to another person;
7) as a consequence of an unjust enrichment;
8) because of other actions performed by the citizens and the legal
entities;
9) as a result of the events, with which the law or the other legal
act connects the arising of the civil legislation consequences.
2. The rights to the property, liable to the state registration,
shall arise from the moment of the registration of the corresponding
rights to it, unless otherwise stipulated by the law.
Article 9. Exercising of the Civil Rights
1. The citizens and the legal entities shall exercise the civil
rights they possess at their own discretion.
2. The refusal of the citizens and of the legal entities to exercise
the civil rights they possess shall not entail the termination of these
rights, with the exception of the law-stipulated cases.
Article 10. The Limits of Exercising the Civil Rights
1. Not admissible shall be actions by the citizens and the legal
entities, performed with the express purpose of inflicting damage to
another person, as well as the abuse of the civil rights in other forms.
Not admissible shall also be the use of the civil rights for the
purpose of restricting the competition, as well as the abuse of the
dominating position on the market.
2. In case of the person not abiding by the requirements, stipulated
in Item 1 of the present Article, the court of justice, the arbitration
court or the arbitration tribunal shall have the right to reject this
person's claim for the protection of the right he possesses.
3. In the cases when the law makes the protection of the civil
rights dependent on whether these rights have been exercised in wisdom
and honesty, the wisdom of actions and the honesty of the participants in
the civil legal relations shall be presumed.
Article 11. Protection of the Civil Rights in the Court
1. The violated or disputed civil rights shall be protected by the
court of justice, the arbitration court or the arbitration tribunal
(hereinafter referred to as the court), in conformity with the liability
of the cases to these bodies' jurisdiction, established by the procedural
legislation.
2. Protection of the civil rights in the administrative order shall
be effected only in the law-stipulated cases. The decision, adopted
administratively, may be appealed against in the court.
Article 12. The Ways of Protecting the Civil Rights
The civil rights shall be protected by way of:
- the recognition of the right;
- the restoration of the situation, which existed before the given
right was violated, and the suppression of the actions that violate the
right or create the threat of its violation;
- the recognition of the disputed deal as invalid and the
implementation of the consequences of its invalidity, and the
implementation of the consequences of the invalidity of an insignificant
deal;
- the recognition as invalid of an act of the state body or of the
local self-government body;
- the self-defence of the right;
- the ruling on the execution of the duty in kind;
- the compensation of the losses;
- the exaction of the forfeit;
- the compensation of the moral damage;
- the termination or the amendment of the legal relationship;
- the non-application by the court of an act of the state body or of
the local self-government body, contradicting the law;
- using the other law-stipulated methods.
Article 13. Recognition as Invalid of an Act of the State Body or of
the Local Self-Government Body
A non-normative act of the state body or of the local
self-government body, and also, in the law-stipulated cases, a normative
act, which does not correspond to the law or to the other legal acts and
which violates the civil rights and the law-protected interests of the
citizen or of the legal entity, may be recognized by the court as
invalid.
In case the act has been recognized by the court as invalid, the
violated right shall be liable to restoration or to protection by the
other means, stipulated by Article 12 of the present Code.
Article 14. The Self-Defence of the Civil Rights
The self-defence of the civil rights shall be admissible.
The methods of the self-defence shall be proportionate to the
violation and shall not go beyond the limits of actions that are
necessary to suppress it.
Article 15. Compensation of the Losses
1. The person, whose right has been violated, shall be entitled to
demand the full recovery of the losses inflicted upon him, unless the
recovery of losses in a smaller amount has been stipulated by the law or
by the agreement.
2. Under the losses shall be understood the expenses, which the
person, whose right has been violated, made or will have to make to
restore the violated right, the loss or the damage done to his property
(the compensatory damage), and also the undeceived profits, which this
person would have derived under the ordinary conditions of the civil
turnover, if his right were not violated (the missed profit).
If the person, who has violated the right of another person, has
derived profits as a result of this, the person, whose right has been
violated, shall have the right to claim, alongside with the compensation
of his other losses, also the compensation of the missed profit in the
amount not less than such profits.
Article 16. Compensation of the Losses Caused by the State Bodies
and by the Local Self-Government Bodies
The losses, inflicted upon the citizen or upon the legal entity as a
result of illegal actions (the inaction) on the part of the state bodies,
of the local self-government bodies or of the officials thereof,
including the issue by the state body or by the local self-government
body of an act, which is not in correspondence with the law or with the
other legal act, shall be liable to compensation by the Russian
Federation, by the corresponding subject of the Russian Federation, or by
the municipal entity.
Subsection 2. The Persons
Chapter 3. The Citizens (Natural Persons)
Article 17. The Legal Capacity of the Citizen
1. The capability to possess the civil rights and to perform duties
(the civil legal capacity) shall be recognized as equally due to all the
citizens.
2. The citizen's legal capacity shall arise at the moment of his
birth and shall cease with his death.
Article 18. The Content of the Citizens' Legal Capacity
The citizens may possess the property by the right of ownership; may
inherit and bequeath the property; may engage in business and in any
other activities, not prohibited by the law; may set up legal entities -
on their own or jointly with other citizens and legal entities; may
effect any deals, which are not in contradiction with the law, and take
part in obligations; may select the place of residence; may enjoy the
rights of the authors of the works of science, literature and art, of
inventions and of other law-protected results of the intellectual
activity; and may also enjoy other property and personal non-property
rights.
Article 19. The Name of the Citizen
1. The citizen shall acquire and exercise the rights and duties
under his own name, which includes the surname and the name proper, as
well as the patronymic, unless otherwise following from the law or from
the national custom.
In the cases and in the order, stipulated by the law, the citizen
shall have the right to make use of a pseudonym (an assumed name).
2. The citizen shall have the right to change his name in conformity
with the law-stipulated procedure. The citizen's change of the name shall
not be the ground for the termination or the change of his rights and
duties, which he has acquired under his former name.
The citizen shall be obliged to take the necessary measures to
inform his debtors and creditors about the change of his name and shall
take the risk of the consequences that may arise in case these persons
have no information on the change of his name.
The citizen, who has changed his name, shall have the right to
demand that the corresponding changes be introduced, at his own expense,
into the documents, formalized in his former name.
3. The name, acquired by the citizen at his birth, as well as the
change of his name, shall be liable to registration in conformity with
the procedure, laid down for the registration of the acts of the civil
state.
4. The acquisition of the rights and duties under the name of
another person shall not be admitted.
5. The damage caused to the citizen as a result of an illegal use of
his name shall be liable to compensation in conformity with the present
Code.
In case the citizen's name has been distorted or used in the ways or
in the form, infringing upon his honor, dignity or business reputation,
the rules shall be applied, stipulated by Article 152 of the present
Code.
Article 20. The Place of the Citizen's Residence
1. The place, where the citizen resides permanently or most of the
time, shall be recognized as the place of his residence.
2. The place of residence of the young minors, who have not reached
14 years of age, or of the citizens who have been put under the
guardianship, shall be recognized as the place of residence of their
legal representatives - the parents, the adopters or the guardians.
Article 21. The Active Capacity of the Citizen
1. The capability of the citizen to acquire and exercise by his
actions the civil rights, to create for himself the civil duties and to
discharge them (the civil active capacity) shall arise in full volume
with the citizen's coming of age, i.e., upon his reaching the age of 18
years.
2. In case the law admits the right to enter into a marriage before
reaching the age of 18 years, the citizen, who has not reached the
law-stipulated age of 18, shall acquire the active capacity in full
volume from the moment of his entering into a marriage.
The active capacity, acquired as a result of entering into a
marriage, shall be retained in full volume in case the marriage is
dissolved before the citizen's reaching the age of 18 years.
In case the marriage is recognized as invalid, the court may pass a
decision on the underaged spouse being deprived of the full active
capacity as from the moment fixed by the court.
Article 22. Inadmissibility of Depriving the Citizen of His Legal
and Active Capacity and of the Restriction Thereof
1. No one citizen shall be restricted in his legal and active
capacity, with the exception of the cases and in conformity with the
procedure, stipulated by the law.
2. The failure to observe the law-stipulated terms and procedure for
the restriction of the citizens' active capacity or of their right to
engage in business or in any other activity shall entail the invalidation
of the act of the state or of another body, which has established the
corresponding restriction.
3. The full or the partial renouncement by the citizen of his legal
or active capacity, and the other deals, aimed at the restriction of his
legal or active capacity, shall be insignificant, with the exception of
the cases, when such deals are admitted by the law.
Article 23. The Citizen's Business Activity
1. The citizen shall have the right to engage in business activities
without forming a legal entity from the moment of his state registration
in the capacity of an individual businessman.
2. The head of the peasant (farmer's) economy, performing business
activities without setting up a legal entity (Article 257), shall be
recognized as a businessman from the moment of the state registration of
the peasant (farmer's) economy.
3. Toward the citizens' business activities, performed without
forming a legal entity, shall be correspondingly applied the rules of the
present Code, regulating the activity of the legal entities, which are
commercial organizations, unless otherwise following from the law, from
the other legal acts or from the substance of the legal relationship.
4. The citizen, engaged in business activities without forming a
legal entity with the violation of the requirements of Item 1 of the
present Article, shall have no right to refer, with respect to the deals
he has thus effected, to the fact that he is not a businessman. The court
may apply to such deals the rules of the present Code on the obligations,
involved in the performance of business activities.
Article 24. The Property Responsibility of the Citizen
The citizen shall bear responsibility by his obligations with his
entire property, with the exception of that property, upon which, in
conformity with the law, no penalty may be inflicted.
The list of the citizens' property, onto which no penalty may be
imposed, shall be compiled by the civil procedural legislation.
Article 25. Insolvency (Bankruptcy) of the Individual Businessman
1. The individual businessman, who is incapable of satisfying the
claims of his creditors, related to his performance of business
activities, may be recognized as insolvent (bankrupt) by the court
decision. From the moment of such decision being passed, his registration
in the capacity of an individual businessman shall be invalidated.
2. During the implementation of the procedure, involved in
recognizing an individual businessman to be bankrupt, his creditors by
the obligations, not related to his performance of business activities,
shall also be entitled to the right to file their claims. The claims of
the said creditors, filed by them in this order, shall stay in force
after the completion of the procedure, involved in declaring the
individual businessman to be bankrupt.
3. In case the individual businessman is declared to be bankrupt,
the claims of his creditors shall be satisfied at the expense of the
property in his possession, onto which the penalty may be imposed, in the
following order:
- in the first turn shall be satisfied the claims of the citizens,
to whom the businessman bears responsibility for inflicting injury to the
life or the health - by way of capitalization of the corresponding
periodical payments, and also the claims for the exaction of aliments;
- in the second turn shall be made the settlements, involved in the
payment of the retirement allowances and in the remuneration of labour
with the persons, working by a labour agreement, including by a contract,
and also in the payment of fees and royalties by the authors' contracts;
- in the third turn shall be satisfied the claims of the creditors,
secured against by the pledge of the property in the possession of the
individual businessman;
- in the fourth turn shall be serviced the debts by obligatory
payments into the budget and into the extra-budgetary funds;
- in the fifth turn shall be made, in conformity with the law, the
settlements with other creditors.
4. After completing the settlements with the creditors, the
individual businessman, recognized as bankrupt, shall be relieved of
discharging the other obligations, related to his business activities, as
well as of satisfying the other claims, presented for execution and taken
into account when recognizing him to be bankrupt.
The claims of the citizens, to whom the person, declared bankrupt,
bears responsibility for inflicting injury to the life or the health, and
the other claims of a personal nature shall stay in force.
5. The grounds and the procedure for the court's recognizing an
individual businessman to be bankrupt, or for his declaring himself
bankrupt shall be established by the Law on the Insolvency (Bankruptcy).
Article 26. The Active Capacity of the Minors of 14-18 Years of Age
1. The minors of from 14 to 18 years of age shall have the right to
effect deals, with the exception of those listed in Item 2 of the present
Article, upon the written consent of their legal representatives - the
parents, the adopters or the trustee.
The deal, effected by such a minor, shall be also valid, if it is
subsequently approved in written form by his parents, adopters or
trustee.
2. The minors of from 14 to 18 years of age shall have the right
independently, without the consent of the parents, the adopters or the
trustee:
1) to dispose of their earnings, student's grant or other incomes;
2) to exercise the author's rights to a work of science, literature
or art, to an invention or to another law-protected result of their
intellectual activity;
3) in conformity with the law, to make deposits into the credit
institutions and to dispose of these;
4) to effect petty everyday deals, and also the other deals,
stipulated by Item 2 of Article 28 of the present Code.
On reaching the age of 16 years, the minors shall also acquire the
right to be members of cooperatives in conformity with the laws on the
cooperatives.
3. The minors of from 14 to 18 years of age shall bear the property
responsibility for the deals they effect in conformity with Items 1 and 2
of the present Article. For the inflicted damage, such minors shall bear
responsibility in conformity with the present Code.
4. In case there are sufficient grounds, the court, upon the request
of the parents, the adopters or the trustee, or of the guardianship and
trusteeship body, may restrict the right of the minor of from 14 to 18
years of age to independently dispose of his earnings, student's grant or
other incomes, or deprive him of this right, with the exception of the
cases, when such a minor has acquired the full active capacity in
conformity with Item 2 of Article 21, or with Article 27 of the present
Code.
Article 27. Emancipation
1. The minor, who has reached the age of 16 years, may be declared
to have the full active capacity, if he works by a labour agreement,
including by a contract, or if he engages in business activities upon the
consent of the parents, the adopters or the trustee.
The minor shall be declared as having acquired the full active
capacity (emancipation) by the decision of the guardianship and
trusteeship body - upon the consent of the parents, the adopters or the
trustee, or, in the absence of such consent - by the court decision.
2. The parents, the adopters and the trustee shall not bear
responsibility for the obligations of an emancipated minor, in particular
for those obligations, which have arisen as a result of his inflicting
damage.
Article 28. The Active Capacity of the Young Minors
1. Only the parents, the adopters or the guardians shall effect
deals on behalf of the minors, who have not reached the age of 14 years
(the young minors), with the exception of the deals, pointed out in Item
2 of the present Article.
Toward the deals with his property, effected by the legal
representatives of the young minor, shall be applied the rules,
stipulated by Items 2 and 3, Article 37 of the present Code.
2. The minors of from 6 to 14 years of age shall have the right to
independently effect:
1) petty everyday deals;
2) the deals, aimed at deriving a free profit, which are not liable
to the notary's certification or to the state registration;
3) the deals, involved in the disposal of the means, provided by the
legal representative or, upon the latter's consent, by a third person for
a definite purpose or for a free disposal.
3. The property responsibility by the young minor's deals, including
by the deals he has effected independently, shall be borne by his
parents, adopters or guardians, unless they prove that the obligation has
been violated not through their fault. These persons, in conformity with
the law, shall also be answerable for the damage, caused by the young
minors.
Article 29. Recognizing the Citizen as Legally Incapable
1. The citizen who, as a result of a mental derangement, can neither
realize the meaning of his actions nor control them, may be recognized by
the court as legally incapable in conformity with the procedure, laid
down by the procedural legislation. In this case, he shall be put under
the guardianship.
2. The deals on behalf of the citizen, who has been recognized as
legally incapable, shall be effected by his guardian.
3. If the grounds, by force of which the citizen was recognized as
legally incapable, have ceased to exist, the court shall recognize him as
legally capable. On the grounds of the court's ruling, the guardianship,
formerly established over him, shall be recalled.
Article 30. Restriction of the Citizen's Active Capacity
1. The active capacity of the citizen, who as a result of his abuse
of alcohol or drug addiction has plunged his family into a precarious
financial position, may be restricted by the court in conformity with the
procedure, laid down by the procedural legislation. He shall be put under
the guardianship.
Such a citizen shall have the right to independently effect petty
everyday deals.
He shall have the right to effect other kinds of the deals and to
receive the earnings, the pension and other incomes, and to dispose
thereof only upon the consent of his trustee. Nevertheless, such a
citizen shall independently bear property responsibility by the deals he
has effected and for the damage he has caused.
2. If the grounds, by force of which the citizen was restricted in
his active capacity, have ceased to exist, the court shall cancel the
restriction of his active capacity. On the ground of the court ruling,
the guardianship, formerly established over him, shall be recalled.
Article 31. The Guardianship and the Trusteeship
1. The guardianship and the trusteeship shall be established to
protect the rights and interests of the legally incapable or partially
capable citizens. The guardianship and the trusteeship over the minors
shall also be established for educational purposes. The corresponding
rights and duties of the guardians and the trustees shall be defined by
the legislation on the marriage and the family.
2. The guardians and the trustees shall not need being vested with
special authority to come out in defence of the rights and interests of
their wards in their relations with any other persons, including in the
courts.
3. The guardianship and the trusteeship over the minors shall be
established in case the minors have no parents and no adopters, in case
the parents have been deprived of parental rights by the court, and also
in those cases, when such citizens have been left without parental care,
in particular when the parents have been shirking their duties, involved
in their education or in the protection of their rights and interests.
Article 32. The Guardianship
1. The guardianship shall be established over the minors and over
the citizens, who have been recognized by the court as legally incapable
as a result of a mental derangement.
2. The guardians shall be representatives of their wards by force of
the law and shall effect all the necessary deals on their behalf and in
their interests.
Article 33. The Trusteeship
1. The trusteeship shall be established over the minors aged from 14
to 18 years, and also over the citizens, who have been restricted in
their active capacity as a result of their abuse of alcohol or drug
addiction.
2. The trustees shall give their consent for effecting such deals,
which the citizens under their trusteeship have no right to effect
independently.
The trustees shall render assistance to their wards in their
exercising their rights and duties, and shall protect them from the
possible maltreatment on the part of the third persons.
Article 34. The Guardianship and Trusteeship Bodies
1. The guardianship and trusteeship bodies shall be the local
self-government bodies.
2. The court shall be obliged, within three days from the date of
the enforcement of its decision on recognizing the citizen as legally
incapable or on restricting his active capacity, to inform about this the
guardianship and trusteeship body by the place of this citizen's
residence for putting him under the guardianship or the trusteeship.
3. The guardianship and trusteeship body by the place of the wards'
residence shall exercise supervision over the activities of their
guardians and trustees.
Article 35. The Guardians and the Trustees
1. The guardian or the trustee shall be appointed by the
guardianship and trusteeship body by the place of residence of the person
in need of guardianship or trusteeship, within the term of one month from
the moment, when the said bodies have become aware of the need to
establish the guardianship or the trusteeship over the citizen. In case
of the existence of the circumstances, worthy of attention, the guardian
or the trustee may be appointed by the guardianship and trusteeship body
by the place of residence of the guardian (the trustee). If the guardian
or the trustee is not appointed for the person in need of the
guardianship or the trusteeship within the term of one month, the
execution of the duties of the guardian or the trustee shall be
temporarily imposed upon the guardianship and trusteeship body.
The appointment of the guardian or the trustee may be appealed
against by the interested persons in the court.
2. Only the adult and legally capable citizens shall be appointed as
the guardians and the trustees. The citizens, deprived of parental
rights, shall not be appointed as the guardians and the trustees.
3. The guardian or the trustee shall be appointed only upon his
consent. Account shall be taken of his moral and other personal
characteristics, his capability to perform the duties of the guardian or
the trustee, the relationships, existing between him and the person in
need of the guardianship or the trusteeship, and, if possible, also of
the wish of the ward.
4. The guardians and the trustees of the citizens in need of the
guardianship or the trusteeship, who have been kept in or placed into the
corresponding educational or medical institutions, into the institutions
for the social protection of the population or into other similar
institutions, shall be these particular institutions.
Article 36. Execution of Their Duties by the Guardians and the
Trustees
1. The duties, involved in the guardianship and the trusteeship,
shall be executed free of charge, with the exception of the
law-stipulated cases.
2. The guardians and the trustees of the underaged citizens shall be
obliged to live together with their wards. Residing of the trustee apart
from their wards, who have reached 16 years of age, shall be admissible
only upon the permission of the guardianship and trusteeship body under
the condition that this may not have a negative effect on the ward's
education and on the protection of his rights and interests.
The guardians and the trustees shall be obliged to inform the
guardianship and trusteeship bodies on the change of their place of
residence.
3. The guardians and the trustees shall be obliged to take care of
the maintenance of their wards, to provide for them all the essential
services and medical treatment, and to protect their rights and
interests.
The guardians and the trustees shall be obliged to take care of
their wards' education.
4. The duties, delineated in Item 3 of the present Article, shall
not be imposed upon the guardians and the trustees of the adult citizens,
who have been restricted in their active capacity by the court.
5. If the grounds, by force of which the citizen was recognized as
legally incapable or partially incapable as a result of his abuse of
alcohol or drug addiction, have ceased to exist, the guardian or the
trustee shall be obliged to file a request with the court on his ward to
be recognized as legally capable and on recalling the guardianship or the
trusteeship, formerly established over him.
Article 37. Disposal of the Ward's Property
1. The incomes of the citizen, put under the guardianship or the
trusteeship, including the incomes due to him from the management of his
property, with the exception of those incomes, of which the ward has the
right to dispose independently, shall be spent by the guardian or the
trustee exclusively in the ward's interest and upon the preliminary
permission of the guardianship and trusteeship body.
The guardian or the trustee shall have the right to make the
outlays, necessary for the maintenance of the ward, at the expense of the
amounts of money, due to the latter by way of his income, without
obtaining the preliminary permission from the guardianship or trusteeship
body.
2. The guardian shall not have the right to effect, and the trustee
- to give his consent to effecting, the deals, involved in the alienation
of the ward's property, including in the exchange or making a gift of it,
in leasing it out (renting it), in giving it into a gratuitous use or in
pawning it, or to effect the deals, entailing the renouncement of the
rights possessed by the ward, the division of his property into parts or
the apportioning of shares out of it, which would entail the reduction of
the ward's property.
The procedure for the management of the ward's property shall be
laid down by the law.
3. The guardian, the trustee, their spouses and close relations
shall have no right to effect any deals with the ward, with the exception
of those involved in giving their own property to the ward as a gift or
into a gratuitous use, or to substitute the ward in signing the deals or
in conducting the court proceedings between the ward and the guardian's
or the trustee's spouse and their close relations.
Article 38. Confidential Management of the Ward's Property
1. In case of a need for the permanent management of the ward's
realty and valuable movable property, the guardianship and trusteeship
body shall sign with the manager, selected by this body, a contract on
the confidential management of such property. In this case, the guardian
or the trustee shall retain his powers with respect to that property of
the ward, which has not been given into the confidential management.
While the manager exerts the legal powers, involved in the
management of the ward's property, the rules, stipulated by Items 2 and
3 of Article 37 of the present Code, shall be extended to his activity.
2. The confidential management of the ward's property shall be
terminated on the grounds, stipulated by the law for cancelling the
contract on the confidential management of the property, and also in the
cases, when the guardianship and the trusteeship are recalled.
Article 39. Relieving and Dismissal the Guardians and the Trustees
from the Execution of Their Duties
1. The guardianship and trusteeship body shall relieve the guardian
or the trustee of the execution of his duties in case the ward is
returned to his parents or is adopted.
In case the ward is placed into an educational or into a medical
institution, an institution for the social protection of the population
or into another similar institution, the guardianship and trusteeship
body shall relieve the formerly appointed guardian or trustee of the
execution of his duties, if this does not contradict to the ward's
interests.
2. In case of the existence of the sound reasons (such as an
illness, the change of the financial position, the absence of mutual
understanding between him and the ward, etc.), the guardian or the
trustee may be relieved of the execution of his duties upon his request.
3. In case of an improper execution by the guardian or by the
trustee of the duties imposed on him, including in the case of his making
use of his guardian's or trustee's status in his own selfish interests or
of his leaving the ward without the proper supervision and the necessary
assistance, the guardianship and trusteeship body shall have the right to
dismiss the guardian or the trustee from the execution of these duties
and to take the necessary measures for making the guilty citizen
answerable in conformity with the law, stipulated liability.
Article 40. Recalling the Guardianship and the Trusteeship
1. The guardianship and the trusteeship over the adult citizens
shall be recalled in the cases when the court passes the decision on
recognizing the ward as legally capable or on cancelling the restriction
of his active capacity upon the petition of the guardian, of the trustee
or of the guardianship and trusteeship body.
2. The guardianship over the young minor shall be recalled on his
reaching the age of 14 years, and the citizen, who has formerly performed
the functions of the young minor's guardian, shall become the minor's
trustee without any additional decision made to this effect.
3. The trusteeship over the minor shall be recalled without any
special decision upon his reaching the age of 18 years, and also in the
case of his entering into a marriage, or in the other cases, when he
acquires the full active capacity before attaining his majority (Item 2
of Article 21, and Article 27).
Article 41. Patronage over the Legally Capable Persons
1. Upon his request, the adult legally capable person, who on
account of the poor condition of his health cannot exercise and protect
his rights and perform his duties, may be put under the trusteeship in
the form of patronage.
2. The patron (assistant) of the adult legally capable citizen may
be appointed by the guardianship and trusteeship body only upon the
consent of such citizen.
3. The property, belonging to an adult capable ward, shall be
disposed of by his patron (assistant) on the grounds of the contract of
commission or of confidential management, signed with the ward. The
everyday and other kind of deals, aimed at the maintenance and at the
satisfaction of the ward's everyday needs, shall be effected by his
patron (assistant) upon the consent of the ward.
4. The patronage over an adult legally capable citizen, established
in conformity with Item 1 of the present article, shall be recalled upon
the demand of the citizen, put under the patronage.
The patron (assistant) of the citizen, put under the patronage,
shall be relieved of the fulfillment of the duties imposed on him in the
cases, stipulated by Article 39 of the present Code.
Article 42. Recognition of the Citizen as Missing for an Unknown
Reason
The citizen may be recognized by the court, on the ground of an
application, filed by the interested persons, as missing for an unknown
reason, if at the place of his residence there is no information on the
place of his stay in the course of one year.
If it is impossible to establish the date of receiving the last
information on the missing person, the first day of the month, next to
that during which the last information on the missing person was
received, shall be regarded as the beginning of the term to be calculated
for recognizing the fact of the given person to be missing for an unknown
reason, and in the case of the impossibility to establish this month -
the first day of January of the next year.
Article 43. The Consequences of Recognizing the Citizen as Missing
for an Unknown Reason
1. If the property, belonging to the citizen, who has been
recognized as missing for an unknown reason, requires a permanent
management, it shall be passed, on the grounds of the court decision, to
the person, who shall be appointed by the guardianship and trusteeship
body and who shall act on the ground of the contract of confidential
management, signed with the said body.
Out of this property an allowance shall be paid for the maintenance
of the citizens, whom the person, missing for an unknown reason, is
obliged to keep, and the debts by the other obligations of the said
person, missing for an unknown reason, shall be serviced.
2. The guardianship and trusteeship body shall have the right to
appoint the manager of the missing citizen's property before the expiry
of one year from the date of receiving the last information on the place
of his stay.
3. The consequences of recognizing the person as missing for an
unknown reason, not stipulated by the present Article, shall be defined
by the law.
Article 44. Repeal of the Decision on Recognizing the Person as
Missing for an Unknown Reason
In case the citizen, who has been recognized as missing for an
unknown reason, turns up, or the place of his stay is discovered, the
court shall repeal its decision on recognizing him as missing for an
unknown reason. On the grounds of the court's decision, the management of
this citizen's property shall be recalled.
Article 45. Declaring the Citizen as Dead
1. The citizen may be declared by the court as dead, if at the place
of his residence there has been no information on the place of his stay
in the course of five years, and in case he has disappeared under the
life-hazardous circumstances, or under such circumstances as give the
ground for supposing that he might have perished as a result of a
definite accident - if he has been missing in the course of six months.
2. The serviceman or the other citizen, who has been missing in
connection with military operations, shall not be declared by the court
as dead until the expiry of two years from the date of the cessation of
the military operations.
3. The date of the departure of the citizen, who has been declared
as dead, shall be the date of the coming into force of the court decision
on declaring him as dead. In the case of declaring as dead the citizen,
who has disappeared under the life-hazardous circumstances or under such
circumstances as give the ground to suppose that he might have perished
as a result of a definite accident, the court may recognize the day of
this citizen's supposed perish as the date of his death.
Article 46. The Consequences of the Turning up of the Citizen,
Declared as Dead
1. In the case the citizen, who has been declared as dead, turns up,
or the place of his stay is discovered, the court shall cancel its
decision on declaring him as dead.
2. Regardless of the time of his turning up, the citizen shall have
the right to demand from any person the return of the remaining property,
which has been gratuitously passed to that person after the citizen was
declared as dead, with the exception of the cases, stipulated by Item 3
of Article 302 of the present Code.
The persons, to whom the property of the citizen, who has been
declared as dead, passed as a result of commercial deals, shall be
obliged to return to him this property, in case it has been proved that,
while acquiring the property at issue, they were aware that the citizen,
declared as dead, is actually alive. If the property at issue cannot be
returned in kind, its cost shall be recompensed.
Article 47. Registration of the Civil State Acts
1. The following civil state acts shall be liable to the state
registration:
1) the birth;
2) entering into a marriage;
3) the dissolution of the marriage;
4) the adoption;
5) the establishment of the paternity;
6) the change of the name;
7) the death of the citizen.
2. The registration of the civil state acts shall be effected by the
civil registration bodies by making the corresponding entries into the
Civil Registers (Civil Acts Books) and by issuing certificates to the
citizens on the ground of these entries.
3. The civil state acts shall be corrected and amended by the civil
registration bodies in case there are sufficient grounds for effecting
this and there is no dispute between the interested persons.
If there is a dispute between the interested persons, or if the
civil registration body refuses to correct or to amend the entry, the
dispute shall be resolved by the court.
The entries on the civil state acts shall be annulled or restored by
the civil registration body on the ground of the court decision.
4. The bodies, performing the registration of the civil state acts,
the procedure for registering these acts, the order of the restoration
and annulment of the entries of the civil state acts, the forms for the
civil acts books and for the certificates, as well as the procedure for
and the term of the keeping of the civil acts books shall be defined by
the Law on the Civil State Acts.
Chapter 4. The Legal Entities
§ 1. The Basic Provisions
Article 48. The Concept of the Legal Entity
1. The legal entity shall be recognized as an organization, which
has in its ownership, economic management or operative management the
set-apart property and which is answerable by its obligations with this
property and may on its own behalf acquire and exercise the property and
the personal non- property rights, to discharge duties and to come out as
a plaintiff and as a defendant in the court.
The legal entities shall have an independent balance or an estimate.
2. In connection with taking part in the formation of the property
of the legal entity, its founders (participators) shall be entitled to
the rights of obligation with respect to this legal entity, or the rights
of estate to its property.
To the legal entities, with respect to which their participants have
the rights of obligation, shall be referred the economic partnerships and
companies, and the production and consumer cooperatives.
To the legal entities, with respect to whose property their founders
have the right of ownership or another right of estate, shall be referred
the state and the municipal unitary enterprises, as well as the institutions,
financed by the owner.
3. To the legal entities, with respect to which their founders
(participants) shall not have the property rights, shall be referred the
public and religious organizations (the associations), the charity and
other funds, and the amalgamations of the legal entities (the
associations and the unions).
Article 49. The Legal Capacity of the Legal Entity
1. The legal entity shall enjoy the civil rights that correspond to
the goals of its activity, stipulated in its constituent documents, and
shall discharge the duties related to this activity.
The commercial organizations, with the exception of the unitary
enterprises and the other law-stipulated kinds of organizations, shall
possess the civil rights and discharge the civil duties, indispensable
for the performance of any kinds of activity that are not prohibited by
the law.
The legal entity shall engage in the individual kinds of activity,
the list of which shall be defined by the law, only on the ground of a
special permit (license).
2. The legal entity may be restricted in its rights only in the
cases and in conformity with the procedure, stipulated by the law. The
decision on the restriction of its rights may be appealed against by the
legal entity in the court.
3. The legal capacity of the legal entity shall arise at the moment
of its establishment (Item 2 of Article 51) and shall cease at the
moment, when its liquidation is completed (Item 8 of Article 63).
The right of the legal entity to engage in an activity, for the
performance of which a license shall be drawn, shall arise from the
moment of its obtaining such a license, or from the time indicated in the
license, and shall cease after the expiry of the term of its operation,
unless otherwise stipulated by the law or by the other legal acts.
Article 50. Commercial and Non-Profit Organizations
1. The legal entities may be either the organizations, which see
deriving profits as the chief goal of their activity (the commercial
organizations), or those organizations, which do not see deriving profits
as such a goal and which do not distribute the derived profit among their
participants (the non-profit organizations).
2. The legal entities that are commercial organizations, may be set
up in the form of the economic partnerships and companies, of the
production cooperatives and of the state and the municipal unitary
enterprises.
3. The legal entities that are non-profit organizations, may be set
up in the form of the consumer cooperatives, of the public or religious
organizations (associations), financed by the owner of the institutions,
of the charity and other funds, and also in the other law-stipulated
forms.
The non-profit organizations shall engage in the business activity
only so far as it helps them to achieve the goals, in the name of which
they have been established, and of the kind that corresponds to these
goals.
4. The creation of the alliances of the commercial and (or) the
non-profit organizations in the form of associations and unions shall be
admissible.
Article 51. State Registration of Legal Entities
1. A legal entity shall be subject to state registration with the
authorized state body in conformity with the procedure, laid down by the
Law on Registration of Legal Entities. The data on state registration
shall be entered to the Unified State Register of Legal Entities, which
shall be open to the general public.
The refusal of state registration of a legal entity shall be only
allowed in the cases stipulated by law.
The refusal of state registration of a legal entity, as well as the
avoidance of such registration, may be appealed against with the court.
2. The legal entity shall be regarded as established from the moment
of making an appropriate entry to the Unified State Register of Legal
Entities.
Article 52. Constituent Documents of the Legal Entity
1. The legal entity shall operate on the ground of the Rules, or of
the constituent agreement and the Rules, or only of the constituent
agreement. In the law-stipulated cases, the legal entity, which is not a
non-profit organization, may operate on the ground of the general
provisions on the given type of organizations.
The constituent agreement of the legal entity shall be signed, and
the Rules shall be approved by its founders (participants).
The legal entity, created in conformity with the present Code by one
founder, shall operate on the ground of the Rules, approved by this
founder.
2. In the constituent documents of the legal entity shall be
indicated the name of the legal entity, the place of its location, the
way in which the legal entity's activity is managed, and the other
information, required by the law for legal entities of the corresponding
type. In the constituent documents of the non-profit organizations and of
the unitary enterprises, and in the law-stipulated cases - also of the
other commercial organizations, shall be defined the object and the goals
of the legal entity's activity. The definition of the object and of the
goals, pursued by the commercial organization, may also be stipulated by
the constituent documents, in the cases, when it is not obligatory by the
law.
In the constituent agreement, the founders shall assume upon
themselves an obligation to create the legal entity, shall delineate the
order of their joint activities, involved in its creation, and the terms
for the transfer to it of their property and for their participation in
its activity. The agreement shall also define the terms and procedure for
the distribution of the profits and losses among the participants, for
the management of the legal entity's activity and for the founders' (the
participants') withdrawal from its structure.
3. The amendments, made in the constituent documents, shall come
into force for the third persons from the moment of their state
registration, and in the cases, established by the law - from the moment
of notifying about the effecting of such amendments the body, performing
the state registration. However, the legal entities and their founders
(participants) shall not have the right to refer to the absence of the
registration of such amendments in their relationships with the third
persons, who have acted with account for such amendments.
Article 53. The Legal Entity's Bodies
1. The legal entity shall acquire the civil rights and shall assume
upon itself the civil duties through its bodies, acting in conformity
with the law, with the other legal acts and with the constituent
documents.
The procedure for the appointment or the election of the legal
entity's bodies shall be laid down by the law and by the constituent
documents.
2. In the law-stipulated cases, the legal entity shall have the
right to acquire the civil rights and to assume upon itself the civil
duties through its participants.
3. The person, who by force of the law or of the legal entity's
constituent documents comes out on its behalf, shall act in the interests
of the legal entity it represents honestly and wisely. He shall be
obliged, upon the demand of the founders (the participants) of the legal
entity, to recompense the losses he has inflicted upon the legal entity,
unless otherwise stipulated by the law or by the agreement.
Article 54. The Name and the Place of Location of the Legal Entity
1. The legal entity shall have its own name, which shall contain an
indication of its legal-organizational form. The names of non-commercial
organisations, and in the cases specified by law, the names of commercial
organisations shall contain an indication of the nature of the legal
person's activity.
2. The place of location of a legal entity shall be determined by
the place of its state registration. The state registration of a legal
entity shall be carried out at the location of a standing executive body
thereof, and in the event of the absence of a standing executive body, it
shall be done by other body or person empowered to act on behalf of the
legal entity without a letter of authority.
3. The name and the place of location of the legal entity shall be
pointed out in its constituent documents.
4. The legal entity, which is a commercial organization, shall have
a trade name.
The legal entity, whose trade name has been registered in conformity
with the established procedure, shall be entitled to an exclusive right
of its use.
The person, illegally making use of somebody else's registered trade
name, shall be obliged, upon the demand of the owner of the right to the
trade name, to stop making use of it and to recompense the inflicted
losses.
The procedure for the registration and the use of the trade name
shall be laid down by the law and by the other legal acts in conformity
with the present Code.
Article 55. The Representations and the Subsidiaries
1. The representation shall be a set-apart subdivision of the legal
entity, situated outside of the place of its location, which represents
and protects the legal entity's interests.
2. The subsidiary shall be the legal entity's set-apart subdivision,
situated outside of the place of its location and performing all its
functions or a part thereof, including the functions of representation.
3. The representations and the subsidiaries shall not be legal
entities. They shall be given the property of the legal entity, by which
they have been set up, and shall operate in conformity with the
provisions it has approved.
The managers of the representations and the subsidiaries shall be
appointed by the legal entity and shall act on the ground of its warrant.
The representations and the subsidiaries shall be named in the
constituent documents of the legal person, who has set them.
Article 56. The Legal Entity's Responsibility
1. The legal entities, with the exception of the institutions,
financed by their owner, shall be answerable by their obligations with
the entire property in their possession.
2. The state-run enterprise and the institution, financed by the
owner, shall be answerable by their obligations in conformity with the
order and on the terms, stipulated by Item 5 of Article 113 and by
Articles 115 and 120 of the present Code.
3. The founder (the participant) of the legal entity or the owner of
its property shall not be answerable by the legal entity's obligations,
and the legal entity shall not be answerable by the obligations of the
founder (the participant) or of the owner, with the exception of the
cases, stipulated by the present Code or by the constituent documents of
the legal entity.
If the insolvency (bankruptcy) of the legal person has been caused
by the founders (participants), by the owner of the legal entity's
property or by the other persons, who have the right to issue the
obligatory instructions for the given legal entity, or may determine its
actions in any other way, in case the legal entity's property proves to
be insufficient, the subsidiary liability by the legal entity's
obligations may be imposed upon such persons.
Article 57. Reorganization of the Legal Entity
1. The reorganization of the legal entity (the merger, affiliation,
division, branching off, transformation) shall be effected by the
decision of its founders (participants) or of the legal entity's body,
authorized for this by the constituent documents.
2. In the law-stipulated cases, the reorganization of the legal
entity in the form of its division or of the branching off from its
structure of one or of several legal entities, shall be effected by the
decision of the authorized state bodies or by the court decision.
If the founders (the participants) of the legal entity, its
authorized body or the legal entity's body, which has been authorized to
effect the reorganization by its constituent documents, fail to effect
the legal entity's reorganization within the term, fixed in the decision
of the authorized state body, the court shall appoint, upon the claim of
the said state body, an outside manager as the legal entity and shall
entrust to him the given legal entity's reorganization. From the moment
of the appointment of an outside manager, the powers, involved in the
management of the legal entity's affairs, shall pass to him. The outside
manager shall come out on behalf of the legal entity in the court, shall
compile the divisional balance and shall present it for examination to
the court, together with the constituent documents of the legal entities,
created as a result of the reorganization. The endorsement of the said
documents by the court shall be the ground for the state registration of
the newly emerging legal entities.
3. In the law-stipulated cases, the reorganization of the legal
entities in the form of the merger, affiliation or transformation shall
be effected only upon the consent of the authorized state bodies.
4. The legal entity shall be regarded as reorganized, with the
exception of the cases of reorganization in the form of affiliation, from
the moment of the state registration of the newly created legal entities.
In case of the reorganization of the legal entity in the form of
another legal entity's affiliation to it, the former shall be regarded as
reorganized from the moment of making an entry about the cessation of
activity of the legal entity, affiliated to it, into the State Register
of the Legal Entities.
Article 58. Legal Succession in the Reorganization of Legal Entities
1. In case of the merger of the legal entities, the rights and
duties of every one of them shall pass to the newly emerged legal entity
in conformity with the transfer deed.
2. In case of the legal entity's affiliation to another legal
entity, the rights and duties of the former legal entity shall pass to
the latter legal entity in conformity with the transfer deed.
3. In case of the division of the legal entity, its rights and
duties shall pass to the newly emerged legal entities in conformity with
the divisional balance.
4. In case of the branching off from the structure of the legal
entity of one or of several legal entities, the rights and duties of the
reorganized legal entity shall pass to every one of these in conformity
with the divisional balance.
5. In case of the transformation of the legal entity of one type
into a legal entity of a different type (the change of its
legal-organizational form), the rights and duties of the reorganized
legal entity shall pass to the newly emerged legal entity in conformity
with the transfer deed.
Article 59. The Transfer Deed and the Divisional Balance
1. The transfer deed and the divisional balance shall contain
provisions on the legal succession by all obligations of the reorganized
legal entity with respect to all its creditors and debtors, including the
obligations, disputed by the parties.
2. The transfer deed and the divisional balance shall be endorsed by
the founders (participants) of the legal entity or by the body, which has
adopted the decision on the reorganization of the legal entities, and
shall be presented, together with the constituent documents, for the
state registration of the newly emerged legal entities, or for the
introduction of amendments into the constituent documents of the existing
legal entities.
The failure to present, together with the constituent documents,
correspondingly, the transfer deed or the divisional balance, and the
absence in these of the provisions on the legal succession by the
obligations of the reorganized legal entity, shall entail the refusal to
effect the state registration of the newly emerged legal entities.
Article 60. Guarantees for the Rights of the Legal Entity's
Creditors in Case of Its Reorganization
1. The founders (the participants) of the legal entity or the body,
which have adopted the decision on the legal entity's reorganization,
shall be obliged to notify about it in written form the creditors of the
reorganized legal entity.
2. The creditor of the reorganized legal entity shall have the right
to claim that the obligation, by which the given legal entity is the
debtor, be terminated or that the latter discharge it before the fixed
date.
3. If the divisional balance does not make it possible to define the
legal successor of the reorganized legal entity, the newly emerged legal
entities shall bear to its creditors the joint responsibility.
Article 61. Liquidation of the Legal Entity
1. The liquidation of the legal entity shall entail its termination
without the transfer of its rights and duties to the other entities by
way of legal succession.
2. The legal entity may be liquidated:
- by the decision of its founders (participants), or of the legal
entity's body, authorized for this by the constituent documents,
including in connection with the expiry of the term, for which the given
legal entity has been created, with its achieving the goal, for the sole
purpose of which it has been established;
- by the court decision in case of gross violations of law made in
the establishment thereof, where these violations cannot be rectified, or
of the performance of an activity without a proper permit (license), or
of an activity, prohibited by the law, or with other gross violations of
the law or of the other legal acts, or in case of the systematic
performance by the public or by the religious organization (the
association), by the charity or the other fund of an activity,
contradicting the goals, set in its Rules, and also in the other cases,
stipulated by the present Code.
3. The claim for the liquidation of the legal entity on the grounds,
stipulated in Item 2 of the present Article, may be lodged with a court
by the state body or by the local self-government body, to which the
right to present such a claim has been granted by the law.
By the court decision on the liquidation of the legal entity, the
fulfillment of the duties, involved in implementing the liquidation of
the legal entity, may be imposed upon its founders (participants), or
upon the body, authorized to effect the liquidation of the legal entity
by its constituent documents.
4. The legal entity, which is a commercial organization or which
operates in the form of a consumer cooperative, a charity or another
fund, shall also be liquidated in conformity with Article 65 of the
present Code as a result of its being recognized as insolvent (bankrupt).
If the cost of the legal entity's property proves to be insufficient
to satisfy the creditors' claims, it shall be liquidated only in
conformity with the procedure, stipulated by Article 65 of the present
Code.
The provisions on the liquidation of the legal entities as a result
of their insolvency (bankruptcy) shall not be extended to the state-run
enterprises.
Article 62. The Duties of the Person Who Has Adopted the Decision
on the Liquidation of the Legal Entity
1. The founders (the participants) of a legal entity or the body,
who (which) have adopted the decision on liquidation of the legal entity,
shall be obliged to immediately notify about this in written form the
authorized state body which shall enter the information on the given
legal entity, being in the process of liquidation, to the Unified State
Register of Legal Entities.
2. The founders (the participants) of a legal entity or the body,
who (which) have adopted the decision on liquidation of the legal entity,
shall appoint a liquidation commission (the liquidator), and shall
establish, in conformity with the present Code and other laws, the
procedure for, and the term of, liquidation thereof.
3. From the moment of appointment of the liquidation commission, the
powers involved in the management of the legal entity's affairs shall
pass to it. The liquidation commission shall also come out on behalf of
the liquidated legal entity in the court.
Article 63. Procedure for the Legal Entity's Liquidation
1. The liquidation commission shall send to the press organs, in
which information on the state registration of the legal entity is
published, an advertisement on its liquidation and on the procedure and
the term for the claims to be filed by its creditors.
The liquidation commission shall take measures for the exposure of
the creditors and the exaction of the debit indebtedness, and shall
notify the creditors in written form about the liquidation of the legal
entity.
2. After the expiry of the term fixed for the creditors' filing
claims, the liquidation commission shall compile an intermediary
liquidation balance, containing information on the structure of the legal
entity's property, on the list of the creditors' claims and on the
results of their examination.
The intermediary liquidation balance shall be approved by the
founders (the participants) of a legal entity or by the body, which has
adopted the decision on the legal entity's liquidation. In the cases
established by law the intermediary liquidation balance shall be endorsed
by agreement with the authorized state body.
3. If the monetary means at the disposal of the legal entity under
liquidation (except for the institutions) prove to be insufficient to
satisfy the creditors' claims, the liquidation commission shall organize
the sale of the legal entity's property at a public auction in conformity
with the procedure, laid down for the execution of the court decisions.
4. The payment of monetary amounts to the creditors of the
liquidated legal entity shall be effected by the liquidation commission
according to the order of priority, established by Article 64 of the
present Code, in conformity with the intermediary liquidation balance,
beginning with the date of its approval, with the exception of the
creditors of the fifth turn, to whom the payments shall be made on the
expiry of one month from the date of the endorsement of the intermediary
liquidation balance.
5. After completing the settlements with the creditors, the
liquidation commission shall compile the liquidation balance, which must
be approved by the founders (the participants) of the legal entity, or by
the body, which has adopted the decision on the legal entity's
liquidation. In the cases established by law the liquidation balance
shall be approved by agreement with the authorized state body.
6. In case the property at the disposal of the liquidated state-run
enterprise, or the monetary means at the disposal of the liquidated
institution are insufficient to satisfy the creditors' claims, the latter
shall have the right to turn to the court with a claim for the
satisfaction of the rest of the claims at the expense of the owner of the
property of this enterprise or institution.
7. The property of the liquidated legal person, left after the
creditors' claims are satisfied, shall be passed to its founders
(participants), who have the rights of estate to this property, if not
otherwise stipulated by the law, by the other legal acts or by the
founding documents of the legal entity.
8. The liquidation of the legal entity shall be regarded as
completed and the legal entity as having ceased existence after an entry
to this effect has been made into the Unified State Register of the Legal
Entities.
Article 64. Satisfaction of the Creditors' Claims
1. In case of the liquidation of a legal entity, the creditors'
claims shall be satisfied in the following order of priority:
- in the first turn shall be satisfied the claims of the citizens,
to whom the liquidated legal entity bears responsibility for causing harm
to the life or the health, by way of capitalization of the corresponding
regular payments;
- in the second turn shall be effected the settlements, involved in
the payment of retirement allowances and in the remuneration of labour to
the persons, who have been employed on the ground of a labour agreement,
including by a contract, and also those involved in the payment of fees
by the author's contracts.
- in the third turn shall be satisfied the claims of the creditors
by the obligations, secured against by the property of the liquidated
legal entity;
- in the fourth turn shall be repaid the debts by the obligatory
payments into the budget and into the extra-budgetary funds;
- in the fifth turn shall be effected the settlements with the other
creditors in conformity with the law.
In the liquidation of banks or any other credit institutions
attracting the resources of citizens, in the first place there shall be
satisfied the demands of the citizens who are creditors of the banks or
of any other credit institutions attracting the funds of citizens and also
the requirements for the organisation that discharges the functions of the
obligatory insurance of deposits in connection with the payment of compensation
for deposits in accordance with the law on the insurance of deposits
of individuals with banks.
2. The claims of each of these groups shall be satisfied after fully
satisfying the claims of the previous groups.
3. In case the property of the liquidated legal entity proves to be
insufficient, it shall be distributed among the creditors of the
corresponding group proportionately to the amounts of the claims liable
to satisfaction, if not otherwise stipulated by the law.
4. In case the liquidation commission refuses to satisfy the
creditor's claim or evades its consideration, the creditor shall have the
right, until the approval of the legal entity's liquidation balance, to
turn to the court with a claim against the liquidation commission. By the
court decision, the creditor's claims may be satisfied at the expense of
the remaining property of the liquidated legal entity.
5. The creditor's claims, lodged after the expiry of the term, fixed
by the liquidation commission for their presentation , shall be satisfied
from the property of the liquidated legal entity, which has been left
after the duly lodged creditors' claims have been satisfied.
6. The creditors' claims, left unsatisfied because of the
insufficiency of the property of the liquidated legal entity, shall be
regarded as settled, the same as the claims of the creditors, which have
not been recognized by the liquidation commission, if the creditor did
not file the claim with a court, and also those claims, which have been
rejected by the court ruling.
Article 65. Insolvency (Bankruptcy) of the Legal Entity
1. The legal entity, which is a commercial organization, with the
exception of the state-run enterprise, and the legal entity, operating in
the form of a consumer cooperative or of a charity or another kind of the
fund, may be recognized by the court decision as insolvent (bankrupt), if
it is incapable to satisfy the creditors' claims.
The recognition of the legal entity to be bankrupt shall entail its
liquidation.
2. The legal entity, which is a commercial organization, and also
the legal entity, operating in the form of a consumer cooperative or of a
charity or another kind of the fund, may jointly with the creditors adopt
the decision on declaring itself to be bankrupt and on its voluntary
liquidation.
3. The grounds for the court recognizing the legal entity to be
bankrupt or for its declaring itself to be bankrupt, and the procedure
for the liquidation of such a legal entity shall be laid down by the Law
on the Insolvency (Bankruptcy). The creditors' claims shall be satisfied
according to the order of priority, stipulated by Item 1 of Article 64 of
the present Code.
§ 2. The Economic Partnerships and Companies
1. The General Provisions
Article 66. The Basic Provisions on the Economic Partnerships and
Companies
1. The economic partnerships and companies shall be recognized as
commercial organizations with the authorized (joint) capital, divided
into the shares (investments) of the founders (the participants). The
property, formed at the expense of the founders' (the participants')
contributions, the same as that produced and acquired by the economic
partnership or by the company in the process of its activity, shall
belong to it by the right of ownership.
In the cases, stipulated by the present Code, an economic company
may be created by one person, who becomes its only participant.
2. The economic partnerships may be established in the form of a
general partnership and of a limited (commandite) partnership.
3. The economic partnerships may also be created in the form of a
joint-stock company with a limited or a double responsibility.
4. The participants in the general partnerships and the general
partners in the limited (commandite) partnerships may be the individual
businessmen and (or) the commercial organizations.
The participants in the economic companies and the investors in the
limited (commandite) partnerships may be the citizens and the legal
entities.
The state bodies and the local self-government bodies shall not have
the right to be the participants in the economic companies and the
investors in the limited partnerships, if not otherwise stipulated by the
law.
The institutions, financed by their owners, may be the participants
in the economic companies and the investors in the partnerships upon the
owner's permission, unless otherwise stipulated by the law.
The law may prohibit or restrict the participation of the individual
categories of citizens in the economic partnerships and companies, with
the exception of the public joint-stock companies.
5. The economic partnerships and companies may be the founders (the
participants) of the other economic partnerships and companies, with the
exception of the cases, stipulated by the present Code and by the other
laws.
6. Contributed to the property of an economic partnership or of a
company may be the money, the securities and the other things, or the
property and the other rights that may be evaluated in money.
The monetary evaluation of the contribution, made by the participant
in the economic company, shall be effected by an agreement between the
founders (participants) of the company; in the law-stipulated cases, it
shall be subject to an independent expert examination.
7. The economic partnerships, and also the companies with a limited
and a double responsibility shall not have the right to issue shares.
Article 67. The Rights and Duties of the Participants in the
Economic Partnership or Company
1. The participants in the economic partnership or company shall
have the right:
- to take part in the management of affairs of the partnership or
company, with the exception of the cases, stipulated by Item 2, Article
84 of the present Code and by the Law on the Joint-Stock Companies;
- to get informed on the activity of the partnership or company and
to get acquainted with its accounting books and other documentation in
conformity with the procedure, laid down by the constituent documents;
- to take part in the distribution of profits;
- to receive, in the case of the partnership's or the company's
liquidation, a part of its property, left after the settlements with the
creditors, or the cost thereof.
2. The participants in the economic partnership or company shall be
obliged:
- to make investments in the order, in the amount, in the ways and
within the term, stipulated by the constituent documents;
- to keep secret the confidential information on the partnership's
or the company's activity.
The participants in the economic partnership or company may also
discharge the other duties, stipulated by the constituent documents.
Article 68. Transformation of the Economic Partnerships and
Companies
1. The economic partnerships and companies of one type may be
transformed into the economic partnerships and companies of another type
or into the production cooperatives, by the decision of the general
meeting of their participants in conformity with the procedure,
stipulated by the present Code.
2. In case the partnership is transformed into a company, each
general partner, who has become the participant (the share-holder) of the
company, shall bear in the course of two years the subsidiary
responsibility with his entire property by the obligations, which have
passed to the company from the partnership. The alienation by the former
partner of the participation shares (shares) in his possession shall not
exempt him from such responsibility. The rules, expatiated in the present
Item, shall be correspondingly applied in case the partnership is
transformed into a production cooperative.
2. The General Partnership
Article 69. The Basic Provisions on the General Partnership
1. The partnership, whose participants (general partners) are
engaged, in conformity with the agreement signed between them, in
business activities on behalf of the partnership and bear responsibility
by its obligations with the property in their possession, shall be
recognized as the general partnership.
2. The person shall have the right to be the participant of only one
general partnership.
3. The trade name of the general partnership shall contain either
the names (the titles) of all its participants and the words "general
partnership", or the name (the title) of one or of several of its
participants, with the words "and Co." and "general partnership" to be
added.
Article 70. The Constituent Agreement of the General Partnership
1. The general partnership shall be created and shall operate on the
ground of a constituent agreement. The constituent agreement shall be
signed by all its participants.
2. The constituent agreement of the general partnership shall
contain, in addition to the information, stipulated in Item 2, Article 52
of the present Code, the terms for the amount and structure of the joint
capital of the partnership; on the amount and the procedure for changing
the share of each of the participants in the joint capital; on the
amount, the structure, the term and the order, set for their making
investments; and on the liability for the violation of the duties,
involved in making such investments.
Article 71. Management in the General Partnership
1. The activity of the general partnership shall be managed by the
general agreement of all its participants. The constituent agreement of
the partnership may also indicate the cases, when the decision shall be
adopted by the majority of the participants' votes.
2. Every participant of the general partnership shall have one vote,
if the constituent agreement does not stipulate a different order for the
definition of its participants' votes.
3. Every participant of the partnership shall have the right to get
acquainted with the entire documentation on the business management,
regardless of whether he has been authorized to perform the partnership's
business management. The renouncement of this right or its restriction,
including by the agreement of the partnership's participants, shall be
insignificant.
Article 72. Business Management of the General Partnership
1. Every participant of the general partnership shall have the right
to operate on behalf of the partnership, unless the constituent agreement
has laid it down that all its participants shall effect the business
management jointly, or unless the business management has been entrusted
to the individual participants.
If the partnership's participants effect a joint business management
of the partnership, to make any one deal, the consent of all the
participants of the partnership shall be required.
If the business management of the partnership has been entrusted by
its participants to one or to several persons from among them, the other
participants, who are going to make a deal on behalf of the partnership,
shall receive a warrant from the participant (the participants), to whom
the business management of the partnership has been entrusted.
The partnership shall not have the right to refer, in its relations
with the third persons, to the provisions of the constituent agreement,
restricting the powers of the partnership participants, with the
exception of the cases, when the partnership can prove that at the moment
of effecting the deal, the third person was aware, or should have been
aware, of the partnership participant's having no right to act on behalf
of the partnership.
2. The powers for the management of the partnership affairs, granted
to one or to several of its participants, may be terminated by the court
on the demand of one or of several other partnership participants, if
there are serious grounds for this, in particular, if the authorized
person (persons) has (have) committed a gross violation of their duties,
or if he (they) have proved to be incapable of a wise management of the
affairs. The necessary changes shall be introduced into the constituent
agreement of the partnership on the grounds of the court decision.
Article 73. The Duties of the Participant of the General Partnership
1. The participant of the general partnership shall take part in its
activities in conformity with the terms of the constituent agreement.
2. The participant of the general partnership shall put at least a
half of his contribution into the partnership's joint capital by the
moment of its registration. The remaining part shall be put in by the
participant within the term, fixed by the constituent agreement. In case
he fails to discharge the said duty, the participant shall be obliged to
pay to the partnership an annual 10 per cent from the underpaid part of
the contribution and to recompense the inflicted losses, unless the other
consequences have been stipulated by the constituent agreement.
3. The participant in a general partnership shall not have the right
to make on his own behalf and in his own interest, or in the interest of
the third persons, without the consent of the rest of the participants,
the deals, which are similar to those that are the object of the
partnership's activity.
If this rule is violated, the partnership shall have the right to
demand, according to his choice, either that the given participant
recompense the losses he has caused to the partnership, or that the
entire profit he has derived by such deals be transferred to the
partnership.
Article 74. Distribution of the Profits and Losses of the General
Partnership
1. The profits and losses of the general partnership shall be
distributed among its participants proportionately to their shares in the
joint capital, if not otherwise stipulated by the constituent agreement
or by another agreement, signed by the participants. No agreement on the
exclusion of any partnership participants from the distribution of the
profits and losses shall be admitted.
2. If, as a result of the losses the partnership has sustained, the
value of its net assets shrinks to less than the amount of its joint
capital, the profit, derived by the partnership, shall not be distributed
among its participants until the value of its net assets exceeds the
amount of the joint capital.
Article 75. Responsibility of the Participants of the General
Partnership by Its Obligations
1. The participants of the general partnership shall jointly bear
the subsidiary responsibility by the partnership's obligations with their
entire property.
2. The participant of the general partnership, who is not its
founder, shall be answerable on a par with the other participants by the
obligations, which have arisen before the date of his joining the
partnership.
The participant, who has withdrawn from the partnership, shall be
answerable by the partnership's obligations, which have arisen before the
moment of his retirement, on a par with the rest of the participants in
the course of 2 years from the date of the approval of the accounting
report on the activity of the partnership over the year, during which he
has retired from the partnership.
3. The agreement of the partnership participants on the restriction
or elimination of the responsibility, stipulated in the present Article,
shall be insignificant.
Article 76. The Change of the General Partnership's Membership
1. In case of the withdrawal or death of any one of the participants
from the general partnership, the recognition of one of them as missing,
legally incapable or partially capable, or as insolvent (bankrupt), or if
the re-organizational procedures are instituted against one of the
participants by the court ruling, or if a legal entity, which is a member
of the partnership, is liquidated or the creditor of one of the
participants turns the exaction of his debt onto the part of the
property, amounting to the participant's share in the partnership's joint
capital, the partnership may continue its activity, if this is stipulated
by the constituent agreement of the partnership or by an agreement,
signed between the rest of its participants.
2. The participants of the general partnership shall have the right
to demand through the court that a certain participant be expelled from
the partnership in conformity with the unanimous decision of the
remaining participants and in the face of the serious grounds, in
particular, on account of his gross violation of his duties or of his
proving to be incapable of a wise management of affairs.
Article 77. The Participant's Withdrawal from the General
Partnership
1. The participant of the general partnership shall have the right
to retire from it after having declared his refusal to take part in it.
The participant shall declare his refusal to take part in the
general partnership, created without indicating the term of operation,
not less than 6 months in advance before his actual withdrawal from the
partnership. The refusal to take part in the general partnership, created
for a certain term, before the expiry of the said term, shall be admitted
only on the valid grounds.
2. The agreement on the renouncement of the right to withdraw from
the partnership, signed between the partnership participants, shall be
insignificant.
Article 78. The Consequences of the Participant's Withdrawal from
the General Partnership
1. The participant, who has retired from the general partnership,
shall be paid out the cost of the share of the partnership's property,
corresponding to this participant's share in the joint capital, if not
otherwise stipulated by the constituent agreement. By an agreement
reached between the retiring participant and the rest of the
participants, the payment out of the cost of the property may be replaced
by the transfer of the property in kind.
The part of the partnership's property due to the retiring
participant, or its cost shall be defined by the balance, which shall be
compiled by the moment of his withdrawal, with the exception of the
cases, stipulated by Article 80 of the present Code.
2. In case of the death of the participant of the general
partnership, his heir may join the general partnership only upon the
consent of all the other participants.
The legal entity - the successor of the reorganized legal entity,
which was a member of the general partnership, shall have the right to
join the general partnership upon the consent of its other participants,
if not otherwise stipulated by the partnership's constituent agreement.
The settlements with the heir (successor), who has not joined the
partnership, shall be effected in conformity with Item 1 of the present
Article. The heir (successor) of the participant of the general
partnership shall bear responsibility by the partnership's obligations to
the third persons, by which, in conformity with Item 2 of Article 75 of
the present Code, the departed participant was answerable, within the
amount of the property of the departed participant, passed to him.
3. In the case of one of the participants retiring from the
partnership, the shares of the remaining participants in the
partnership's joint capital shall correspondingly increase, unless
otherwise stipulated by the constituent documents.
Article 79. Transfer of the Participant's Share in the General
Partnership's Joint Capital
The participant of the general partnership shall have the right,
with the consent of the rest of its participants, to transfer his share
in the joint capital, or a part thereof, to another participant of the
partnership or to the third person.
When the share (a part of the share) is transferred to another
person, the full rights or the corresponding part thereof, formerly
possessed by the participant, who has effected the transfer of his share
(a part of the share), shall also pass to the former. The person, to whom
the share (a part of the share) has been transferred, shall bear
responsibility by the partnership's obligations in conformity with the
procedure, laid down by first paragraph of Item 2 of Article 75 of the
present Code.
The transfer of his entire share to another person, effected by the
participant of the partnership, shall entail the termination of his
participation in the partnership and also the consequences, stipulated by
Item 2 of Article 75 of the present Code.
Article 80. Turning the Penalty onto the Share of the Participant in
the Joint Capital of the General Partnership
The turning of the penalty onto the participant's share in the joint
capital of the partnership by the participant's own debts shall be
admissible only if his own property proves to be insufficient to cover
his debts. The creditors of such a participant shall have the right to
demand from the general partnership that it separate the part of the
partnership's property that would correspond to the debtor's share in the
joint capital, so that the penalty may be turned onto this property. The
part of the partnership property, subject to being singled out, or the
cost thereof, shall be defined by the balance, compiled by the moment
when the creditors file the claim for it to be separated.
The turning of the penalty onto the property, which corresponds to
the participant's share in the joint capital of the general partnership,
shall signify the termination of his participation in the partnership and
shall also entail the consequences, stipulated by Paragraph 2 of Item 2
of Article 75 of the present Code.
Article 81. Liquidation of the General Partnership
The general partnership shall be liquidated on the grounds,
indicated in Article 61 of the present Code, and also in case only one
participant is left in it. Such a participant shall have the right, in
the course of 6 months from the moment when he has become the only
participant of the partnership, to transform such a partnership into an
economic company in conformity with the procedure, laid down by the
present Code.
The general partnership shall also be liquidated in the cases,
stipulated in Item 1 of Article 76 of the present Code, unless it has
been stipulated by the constituent documents of the partnership, or by an
agreement, signed between the remaining participants, that the
partnership shall continue its activity.
3. The Limited Partnership
Article 82. The Basic Provisions for the Limited Partnership
1. The limited (commandite) partnership shall be recognized as such
a partnership, in which, alongside the participants, engaged in the
performance of the business activity on behalf of the partnership and
answerable by the obligations of the partnership with their property (the
general partners), there is (are) also one or several
participants-investors (commanditaires), who bear the risk of the losses
in connection with the partnership's activity within the amount of their
investments and who do not take part in the performance of the
partnership's business activity.
2. The position of the general partners in the commandite
partnership and their liability by the partnership's obligations shall be
defined by the rules on the participants of the general partnership, laid
down by the present Code.
3. The person shall be the general partner only in one commandite
partnership.
The participant of the general partnership shall not be the general
partner in the commandite partnership.
4. The trade name of the commandite partnership shall contain either
the names (the titles) of all its general partners and the words "limited
partnership" or "commandite partnership", or the name (the title) of at
least one of its general partners and the words "and Co.", and also the
words "limited partnership" or "commandite partnership".
If into the trade name of the partnership is included the name of
the investor, this investor shall become the general partner.
5. Toward the limited (commandite) partnership shall be applied the
rules on the general partnership, laid down in the present Code, so far
as this does not contradict the rules of the present Code on the limited
partnership.
Article 83. The Constituent Agreement of the Limited Partnership
1. The limited partnership shall be created and shall operate on the
ground of the constituent agreement. The constituent agreement shall be
signed by all the general partners.
2. The constituent agreement of the limited partnership shall
contain, in addition to the information, indicated in Item 2, Article 52
of the present Code, the terms on the amount and structure of the joint
capital of the partnership; on the amount of and the procedure for
changing the shares of each of the general partners in the joint capital;
on the amount, the structure, the term and the order of their making
investments, their liability for violating the duties, involved in making
the investments; on the aggregate amount of the contributions, made by
the investors.
Article 84. Administrative and Business Management in the Limited
Partnership
1. The activity of the limited partnership shall be led by its
general partners. The procedure for the administrative and business
management of such a partnership by its general partners shall be
established according to the rules on the general partnership, laid down
in the present Code.
2. The investors shall not have the right to take part in the
administrative and business management of the limited partnership or to
come out on its behalf other than by a warrant. Neither shall they have
the right to dispute the actions of the general partners involved in the
administrative and business management of the partnership.
Article 85. The Rights and Duties of the Investor of the Limited
Partnership
1. The investor of the limited partnership shall be obliged to make
an investment into the joint capital. The fact of his making the
investment shall be confirmed by the participation certificate, issued to
the investor by the partnership.
2. The investor of the limited partnership shall have the right:
1) to receive a part of the partnership's profit, due for his share
in the joint capital, in conformity with the procedure, stipulated by the
constituent agreement;
2) to get acquainted with the partnership's annual reports and
balances;
3) on the expiry of the fiscal year, to retire from the partnership
and to withdraw his investment in conformity with the procedure, laid
down by the constituent agreement;
4) to transfer his share in the joint capital or a part thereof to
another investor or to a third person. The investors shall be entitled to
the preferential right, in comparison with the third persons, to buy the
share (a part thereof) as applied to the terms and order, stipulated by
Item 2 of Article 93 of the present Code. The transfer by the investor of
his entire share to another person shall amount to the termination of his
membership in the partnership.
The constituent agreement of the limited partnership may also
stipulate other rights of the investor.
Article 86. Liquidation of the Limited Partnership
1. The limited partnership shall be liquidated in case all the
investors have retired from it. However, the general partners shall have
the right, instead of the liquidation of the limited partnership, to
transform it into a general partnership.
The limited partnership shall also be liquidated on the grounds,
stipulated for the liquidation of the general partnership (Article 81).
However, the limited partnership shall continue operation, if at least
one general partner and one investor are left in it.
2. In case of the liquidation of the limited partnership, including
in the case of its bankruptcy, the investors shall have the preferential
right before the general partners to get back their investments from the
property of the partnership, left after the creditors' claims have been
satisfied.
The property of the partnership, left after this, shall be
distributed among the general partners and the investors proportionately
to their shares in the partnership's joint capital, if not otherwise
stipulated by the constituent agreement or by an agreement between the
general partners and the investors.
4. The Limited Liability Company
Article 87. The Basic Provisions on the Limited Liability Company
1. The limited liability company shall be recognized as the company,
established by one or by several persons, whose authorized capital is
divided into the shares, the size of which is stipulated by the
constituent documents; the participants of the limited liability company
shall not be answerable by its obligations and shall bear the risk of the
losses in connection with the company's activity within the cost of the
contributions they have made.
The participants of the company, who have not made their
contributions in full volume, shall bear joint responsibility by its
obligations within the cost of the underpaid part of the contribution of
each of the participants.
2. The trade name of the limited liability company shall contain the
name of the company and the words, "limited liability".
3. The legal position of the limited liability company, and the
rights and duties of its participants shall be defined by the present
Code and by the Law on the Limited Liability Companies.
The peculiarities of the legal status of the credit organizations
set up in the form of a limited liability company, the rights and duties
of the stakeholders thereof shall also be provided by the laws governing
the activities of credit organizations.
Article 88. Participants in the Limited Liability Company
1. The number of participants in the limited liability company shall
not exceed the limit, established by the Law on the Limited Liability
Companies. Otherwise it shall be subject to transformation into a
joint-stock company in the course of a year; on the expiry of this term,
if the number of its participants has not been reduced to the
law-established limit, it shall be liquidated by the court decision.
2. The limited liability company shall not include as a single
participant another economic company, consisting of a single person.
Article 89. Constituent Documents of the Limited Liability Company
1. The constituent documents of the limited liability company shall
be the constituent agreement, signed by its participants, and the Rules,
approved by them. If the company is set up by a single person, its
constituent document shall be the Rules.
2. The constituent documents of the limited liability company, in
addition to the information, stipulated in Item 2 of Article 52 of the
present Code, shall contain the terms on the amount of the company's
capital; on the size of the shares of every participant; on the size, the
structure, the term and the procedure for their making the investments,
and on their responsibility for violating their duties, involved in the
making of the investments; on the structure and the competence of the
public management bodies and on the order of their adopting decisions,
including on the issues, the decisions on which shall be adopted
unanimously or by a qualified majority of votes; and also other
information, stipulated by the Law on the Limited Liability Companies.
Article 90. Authorized Capital of the Limited Liability Company
1. The authorized capital of the limited liability company shall be
comprised of the cost of its participants' contributions.
The authorized capital of the limited liability company shall
determine the minimum size of the company's property, guaranteeing the
interests of its creditors. The authorized capital of the limited
liability company shall not be less than the amount, stipulated by the
Law on the Limited Liability Companies.
2. It is prohibited to relieve a stakeholder of the limited
liability company from the obligation to make a contribution in the
company's authorized capital, including but not limited to, accepting for
offset claims to the company, excluding the cases provided by the law.
3. By the moment of registration, not less than a half of the
authorized capital of the limited liability company shall be paid up by
its participants. The remaining underpaid part of the authorized capital
shall be subject to payment by its participants in the course of the
first year of the company's operation. In case of violating this
obligation, the company shall either make a statement on the reduction of
its authorized capital and register its reduction in conformity with the
established procedure, or cease its activity by way of liquidation.
4. If, on the expiry of the second or of every subsequent fiscal
year, the cost of the net assets of the limited liability company proves
to be less than its authorized capital, the company shall be obliged to
make a statement on the reduction of its authorized capital and to
register its reduction in conformity with the established procedure. In
case the cost of the company's said assets falls below the law-stipulated
minimum size of the authorized capital, the company shall be subject to
liquidation.
5. The reduction of the authorized capital of the limited liability
company shall be admitted after all its creditors have been notified to
this effect. In this case, the latter shall have the right to demand that
the corresponding obligations of the company shall be discharged in
advance and that their losses be recompensed.
The rights and duties of the creditors of credit organizations set
up on the form of a limited liability company shall also be governed by
the laws governing the activities of credit organizations.
6. The augmentation of the company's authorized capital shall be
admitted after all its participants have made their investments in full
volume.
Article 91. Administration in the Limited Liability Company
1. The higher body of the limited liability company shall be the
general meeting of its participants.
An executive body (collegiate and/or single-man) shall be set up in
the limited liability company, which shall perform the current direction
of its activity and which shall report to the general meeting of its
participants. The single-man management body of the company may also be
elected not from among its participants.
2. The jurisdiction of the company's management bodies and the
procedure, laid down for its adoption of decisions and coming out on
behalf of the company, shall be defined in conformity with the present
Code and with the Law on the Limited Liability Companies.
3. To the exclusive jurisdiction of the general meeting of the
limited liability company shall be referred:
1) the amendment of the company's Rules and the change of the size
of its authorized capital;
2) the setting up of the company's executive bodies and an advanced
termination of their powers;
3) the approval of the company's annual reports and accounting
balances and the distribution of its profits and losses;
4) the adoption of the decision on the company's reorganization or
liquidation;
5) the election of the company's auditing committee (the auditor).
The settlement of other questions may also be referred to the
exclusive jurisdiction of the general meeting of the company's partners
by Law on the Limited Liability Companies.
The issues, referred to the exclusive jurisdiction of the general
meeting of the company's participants, shall not be passed by it for
adopting decisions to the company's executive body.
4. For the purposes of checking up and confirming the correctness of
the annual financial reports of the limited liability company, it shall
have the right annually to draw on the services of a certified auditor,
whose material interests are not involved in the company or connected
with its participants (the external audit). The audit examination of the
company's annual financial reports may also be carried out on the demand
of any of its participants.
The procedure for carrying out the audit examinations of the
company's activities shall be defined by the law and by the company's
Rules.
5. The publication by the company of the results of the management
of its activity (the public reports) shall not be required, with the
exception of the cases, stipulated by the Law on the Limited Liability
Companies.
Article 92. Reorganization and Liquidation of the Limited Liability
Company
1. The limited liability company may be reorganized or liquidated
voluntarily by a unanimous consent of its participants.
The other grounds for the reorganization and liquidation of the
limited liability company and the procedure for its reorganization and
liquidation shall be defined by the present Code and by the other laws.
2. The limited liability company shall have the right to transform
itself into a joint-stock company or into a production cooperative.
Article 93. Transfer of the Share in the Authorized Capital of the
Limited Liability Company to a Third Person
1. The participant of the limited liability company shall have the
right to sell or cede in another manner his share in the company's
authorized capital or a part thereof to one or several participants of
the given company.
2. The alienation by the participant of the company of his share (a
part thereof) to third persons shall be admitted, unless otherwise
stipulated by the company's Rules.
The participants of the company shall enjoy the right of priority in
acquiring the share of its participant (or a part thereof)
proportionately to the size of their own shares, unless the other order
for exercising this right is stipulated by the company's Rules or by an
agreement between its participants. In case the company's participants do
not avail themselves of their preferential right within a month's term
from the date of notification or within the other term, stipulated by the
company's Rules or by the agreement between its participants, the
participant's share may be alienated in favour of a third person.
3. If, in conformity with the Rules of the limited liability
company, the alienation of the participant's share (a part thereof) to
third persons is inadmissible, while its other participants refuse to
acquire it, the company shall be obliged to pay to the participant in
question the actual cost of, or to give him in kind, the amount of
property, which would correspond to such cost.
4. The share of the participant of the limited liability company may
be alienated up to its full payment only in that part of it, which has
already been paid.
5. In the participant's share (a part thereof) has been acquired by
the limited liability company itself, it shall be obliged to realize it
to its other participants or to third persons within the term and in
conformity with the order, stipulated by the Law on the Limited Liability
Companies and by the company's constituent documents, or to reduce its
authorized capital in conformity with Items 4 and 5 of Article 90 of the
present Code.
6. The shares of the authorized capital of the limited liability
company shall be transferred to the citizens' heirs and to the legal
successors of the legal entities, which have been the company's
participants, unless the constituent documents of the company stipulate
that such transfer shall be admitted only upon the consent of the rest of
the company's participants. The refusal to grant the consent to the
transfer of the share shall entail the obligation of the company to pay
up to the heirs (the legal successors) of the participant the actual cost
of his share, or to give them in kind the property, that would amount to
such cost, in conformity with the order and on the terms, stipulated by
the Law on the Limited Liability Companies and by the company's
constituent documents.
Article 94. Withdrawal of the Participant of the Limited Liability
Company from the Company
The participant of the limited liability company shall have the
right to retire from the company regardless of the consent of its other
participants. In this case, he shall be entitled to being paid up the
cost of the part of the property, corresponding to the size of his share
in the company's authorized capital in the order, in the manner and
within the term, stipulated by the Law on the Limited liability Companies
and by the company's constituent documents.
5. The Double Liability Company
Article 95. The Basic Provisions on the Double Liability Companies
1. The double liability company shall be recognized as the company,
established by one or by several persons, whose capital is divided into
the shares of the size, defined by the company's constituent documents;
the participants of such a company shall bear in common the subsidiary
liability by its obligations with their property in the amount, divisible
by the cost of their contributions, equal for all of them, which shall be
defined by the company's constituent documents. In case of the bankruptcy
of one of the participants, his liability by the company's obligations
shall be distributed among the rest of the participants proportionately
to their contributions, unless the other order for the liability sharing
is stipulated by the company's constituent documents.
2. The trade name of the double liability company shall contain the
name of the company and the words " double liability".
3. Toward the double liability company shall be applied the rules of
the present Code on the limited liability company, unless otherwise
stipulated by the present Article.
6. The Joint-Stock Company
Article 96. The Basic Provisions on the Joint-Stock Company
1. The joint-stock company shall be recognized as the company, whose
authorized capital is divided into a definite number of shares; the
participants of the joint-stock company (the share-holders) shall not be
answerable by its obligations and shall take the risks, involved in the
losses in connection with its activity, within the cost of the shares in
their possession.
The share-holders, who have not paid up their shares in full, shall
bear the joint responsibility by the obligations of the joint-stock
company within the unpaid part of the cost of the shares in their
possession.
2. The trade name of the joint-stock company shall contain its name
and the indication of the fact that the company is a joint-stock one.
3. The legal status of the joint-stock company and the rights and
duties of the share-holders shall be defined in conformity with the
present Code and with the Law on the Joint-Stock Companies.
The specifics of the legal status of the joint-stock companies,
founded by way of the privatization of the state-run and municipal
enterprises, shall be also defined by the laws and by the other legal
acts on the privatization of these enterprises.
The peculiarities of the legal status of the credit organizations
set up in the form of a joint-stock company, the rights and duties of the
shareholders thereof shall also be provided by the laws governing the
activities of credit organizations.
Article 97. The Open and Closed Joint-Stock Companies
1. The joint-stock company, whose participants may alienate the
shares in their possession without the consent of the other
share-holders, shall be recognized as an open joint-stock company. This
kind of the joint-stock company shall have the right to carry out a
public subscription for the shares it issues and to sell them freely on
the terms, fixed by the law and by the other legal acts.
The open joint-stock company shall be obliged every year to
publish for general information an annual report, an accounting balance
and also an account on the profits and the losses.
2. The joint-stock company, whose shares are distributed only among
its founders or within another circle of persons, defined in advance,
shall be recognized as a closed joint-stock company. Such a company
shall not have the right to carry out a public subscription for the
shares it issues or to offer them in any other way for acquisition to an
unlimited circle of persons.
The share-holders of the closed joint-stock company shall enjoy a
preferential right to acquire the shares offered for sale by the other
share-holders of this company.
The number of the participants of the closed joint-stock company
shall not exceed that fixed by the Law on the Joint-Stock Companies;
otherwise, it shall be subject to the transformation into an open
joint-stock company in the course of one year, and upon the expiry of
this term - to the liquidation by the court ruling, if the number of its
participants has not been reduced to the law-stipulated limit.
In the cases, stipulated by the Law on the Joint-Stock Companies,
the closed joint-stock company may be obliged to publish for general
information the documents, indicated in Item 1 of the present Article.
Article 98. The Founding of the Joint-Stock Company
1. The founders of the joint-stock company shall sign between
themselves an agreement, defining the order of their performing a joint
activity, involved in the establishment of the company,the size of its
authorized capital, the categories of the shares it is going to issue and
the way of their distribution, and also the other terms, stipulated by
the Law on the Joint-Stock Companies.
The agreement on founding a joint-stock company shall be made out in
written form.
2. The founders of the joint-stock company shall bear a joint
responsibility by the obligations, which have arisen before the company's
registration.
The company shall bear responsibility by the founders' obligations,
related to its creation, only in case their actions have been
subsequently approved by the general meeting of the share-holders.
3. The constituent documents of the joint-stock company shall be its
Rules, approved by the founders.
The Rules of the joint-stock company, in addition to the
information, specified in Item 2 of Article 52 of the present Code, shall
contain the terms on the categories of the shares, issued by the company,
on their face value and number; on the size of the company's authorized
capital; on the rights of the share-holders; on the structure and the
jurisdiction of the company's management bodies and on the procedure,
laid down for their decision-making, including on the issues, on which
decisions shall be adopted unanimously or by a qualified majority of
votes. The Rules of the joint-stock company shall also contain other
information, stipulated by the Law on the Joint-Stock Companies.
4. The procedure for the performance of the other actions, involved
in founding a joint-stock company, including the jurisdiction of the
constituent assembly, shall be defined by the Law on the Joint-Stock
Companies.
5. The specifics of the creation of the joint-stock companies as a
result of the privatization of the state-run and the municipal
enterprises shall be defined by the laws and by the other legal acts on
the privatization of these enterprises.
6. The joint-stock company may be founded by one person, or it may
consist of one person in case a single share-holder acquires all the
company's shares. The data to this effect shall be contained in the
company's Rules, shall be registered and published for general
information.
The joint-stock company shall not have the right to enlist another
economic company, consisting of a single person, as its only participant.
Article 99. The Authorized Capital of the Joint-Stock Company
1. The authorized capital of the joint-stock company shall be
comprised of the face value of the company's shares, acquired by the
share-holders.
The company's authorized capital shall define the minimum amount of
the company's property, guaranteeing the interests of its creditors. It
shall not be less than it is stipulated by the Law on the Joint-Stock
Companies.
2. The share-holder shall not be exempted from the duty to pay for
the company's shares, including the exemption from this duty by taking
into account his claims against the company.
3. The public subscription for the shares of the joint-stock company
shall not be admitted until the authorized capital is paid up in full.
When founding a joint-stock company, all its shares shall be distributed
among the founders.
4. If upon the expiry of the second and of each of the next fiscal
years the cost of the company's net assets proves to be less than its
authorized capital, the company shall be obliged to declare and to
register, in conformity with the established procedure, the reduction of
its authorized capital. If the cost of the said company's assets falls
below the minimum size of the authorized capital, fixed by the law (Item
1 of the present Article), the company shall be subject to liquidation.
5. The law or the Rules of the company may fix the limits upon the
number, the total face value of its shares or the maximum number of the
votes in the possession of a single share-holder.
Article 100. Augmentation of the Capital of the Joint-Stock Company
1. The joint-stock company shall have the right, by the decision of
the general meeting of the share-holders, to inflate its authorized
capital by raising the face value of its shares or by issuing additional
shares.
2. The augmentation of the authorized capital of the joint-stock
company shall be admitted after it has been paid up in full. The
augmentation of the company's authorized capital for the purpose of
covering its losses shall not be admitted.
3. In the cases, stipulated by the Law on the Joint-Stock Companies,
the company's Rules may establish the preferential right of the
share-holders, possessing ordinary (common) shares or the other kind of
the voting shares, for acquiring the shares, additionally issued by the
company.
Article 101. Reduction of the Authorized Capital of the Joint-Stock
Company
1. The joint-stock company shall have the right, by the decision of
the general meeting of the share-holders, to deflate its authorized
capital by cutting down the face value of its shares, or by buying up a
certain number of the shares in order to reduce their total number.
The deflation of the company's authorized capital shall be admitted
after the notification of all its creditors in conformity with the
procedure, laid down by the Law on the Joint-Stock Companies. The
creditors of the company shall have the right to demand that the company
terminate in advance or execute its corresponding obligations and
recompense their losses.
The rights and duties of the creditors of credit organizations set
up in the form of a joint-stock company shall also be provided by the
laws governing the activities of credit organizations.
2. The reduction of the authorized capital of the joint-stock
company by acquiring and paying off a part of the shares shall be
admitted in case this possibility has been stipulated in the company's
Rules.
Article 102. Restrictions on the Issue of Securities and on the
Payment of Dividends of the Joint-Stock Company
1. The proportion of the preference shares in the total volume of
the authorized capital of the joint-stock company shall not exceed 25 per
cent.
2. The joint-stock company shall have the right to issue bonds to
the sum, not exceeding the size of the authorized capital or the amount
of the security, provided for this purpose by the third persons, after
the authorized capital has been paid up in full. In the absence of the
security, the bond issue shall not be admitted until the third year of
the joint-stock company's existence and on condition that by this time
its two annual balances have been properly approved.
3. The joint-stock company shall not have the right to declare and
pay dividends:
- until the entire authorized capital is paid up in full;
- if the cost of the net assets of the joint-stock company is less
than its authorized capital and its reserve fund, or if it will fall
below their size as a result of the payment of the dividends.
Article 103. Management in the Joint-Stock Company
1. The higher management body of the joint-stock company shall be
the general meeting of its share-holders.
Within the exclusive jurisdiction of the general meeting of the
share-holders shall be placed:
1) the amendment of the company's Rules, including the change of the
size of its authorized capital;
2) the election of the members of the board of directors (the
supervisory council) and of the auditing commission (the auditor) of the
company, and the termination of their powers before the expiry of their
term of office;
3) the formation of the company's executive bodies and the cessation
of their powers before the expiry of their term of office, unless the
company's Rules refer the resolution of these issues to the jurisdiction
of the board of directors (the supervisory council);
4) the approval of the annual reports, the accounting balances and
the accounts of the company's profits and losses, and the distribution of
its profits and losses;
5) the adoption of the decision on the company's reorganization or
liquidation.
The Law on the Joint-Stock Companies may also refer to the exclusive
jurisdiction of the general meeting of the share-holders the resolution
of the other issues.
The issues, placed by the law within the exclusive jurisdiction of
the general meeting of the share-holders, shall not be turned over by it
for resolution to the company's executive bodies.
2. In the company with over 50 share-holders, a board of directors
(a supervisory council) shall be established.
In case of the establishment of the board of directors (the
supervisory council), the company's Rules, in conformity with the Law on
the Joint-Stock Companies, shall delineate the scope of its exclusive
jurisdiction. The issues, placed by the Rules within the exclusive
jurisdiction of the board of directors (the supervisory council), shall
not be turned over by it for resolution to the company's executive
bodies.
3. The company's executive body may be collegiate (the board, the
directorate) and (or) single-man (the director, the director-general). It
shall effect the current management of the company's activity and shall
report to the board of directors (to the supervisory council) and to the
general meeting of the share-holders.
To the jurisdiction of the company's executive body shall be
referred the resolution of all issues, which are not placed within the
exclusive jurisdiction of the other management bodies of the company,
delineated by the law or by the company's Rules.
By the decision of the general meeting of the share-holders, the
powers of the company's executive body may be turned over by an agreement
to another commercial organization, or to an individual businessman
(manager).
4. The jurisdiction of the management bodies of the joint-stock
company and the procedure for their adopting decisions and acting on
behalf of the company shall be defined in conformity with the present
Code by the Law on the Joint-Stock Companies and by the company's Rules.
5. The joint-stock company, which has been obliged, in conformity
with the present Code or with the Law on the Joint-Stock Companies, to
publish for general information the documents, indicated in Item 1 of
Article 97 of the present Code, shall annually draw upon the services of
a professional auditor, not bound up with the company or with its
participants by property interests, for checking upon and confirming the
correctness of the company's annual financial reports.
The auditor's examination of the activity of the joint-stock
company, including of the company, which has not been obliged to publish
for general information the said documents, shall be carried out at any
time upon the demand of the share-holders, whose aggregate share of the
authorized capital comprises 10 or more per cent.
The procedure for carrying out auditor's examinations of the
activity of the joint-stock company shall be defined by the law and by
the company's Rules.
Article 104. Reorganization and Liquidation of the Joint-Stock
Company
1. The joint-stock company may be reorganized or liquidated
voluntarily, by the decision of the general meeting of the share-holders.
The other grounds and the procedure for the reorganization and
liquidation of the joint-stock company shall be stipulated by the present
Code and by the other laws.
2. The joint-stock company shall have the right to transform itself
into a limited liability company or into a production cooperative and also
to a non-commercial organization in compliance with the law.
7. The Subsidiary and Dependent Companies
Article 105. The Subsidiary Economic Company
1. The economic company shall be recognized as subsidiary, if the
other (the parent) economic company or partnership, on account of its
prevalent participation in its authorized capital, or in conformity with
the agreement, signed between them, or in any other way, can exert a
decisive impact on the decisions, adopted by such a company.
2. The subsidiary company shall not be answerable by the debts of
the parent company (the partnership).
The parent company (the partnership), which has the right to issue
to the subsidiary company, including by an agreement signed with it, the
instructions that are obligatory for it, shall bear joint responsibility
with the subsidiary company by the deals, effected by the latter in
execution of such instructions.
In case of the insolvency (the bankruptcy) of the subsidiary company
through the fault of the parent company (the partnership), the latter
shall bear the subsidiary responsibility by its debts.
3. The participants (the share-holders) of the subsidiary company
shall have the right to claim that the losses, caused to the subsidiary
company through the fault of the parent company (the partnership), shall
be recompensed to them by the latter, unless otherwise stipulated by the
laws on the economic companies.
Article 106. The Dependent Economic Company
1. The economic company shall be recognized as dependent, if the
other (the prevalent, the participant) company possesses over 20 per cent
of the voting shares of the joint-stock company or over 20 per cent of
the authorized capital of the limited liability company.
2. The economic company, which has acquired over 20 per cent of the
voting shares of the joint-stock company, or over 20 per cent of the
authorized capital of the limited liability company, shall be obliged to
publish information to this effect without delay and in conformity with
the procedure, stipulated by the laws on the economic companies.
3. The limits of the mutual participation of the economic companies
in one another's authorized capitals and the number of the votes that one
such company may use at the general meeting of the participants or of the
share-holders of another company, shall be defined by the law.
§ 3. The Production Cooperatives
Article 107. The Concept of the Production Cooperative
1. The production cooperative (the artel) shall be recognized as a
voluntary association of the citizens, based on the membership and set up
for the purpose of the joint production or of the other kind of the
economic activity (the manufacture, processing and sale of the
industrial, farming and the other kind of produce, the performance of
works, the trade, the rendering of everyday and other services), based on
their personal labour and on the other kind of participation and on the
putting together by its members (participants) of the property
participation shares. The law and the constituent documents of the
production cooperative may stipulate the participation in its activity of
the legal entities. The production cooperative shall be a commercial
organization.
2. The members of the production cooperative shall bear the
subsidiary responsibility by the cooperative's obligations in the amount
and in conformity with the procedure, stipulated by the Law on the
Production Cooperatives and by the Rules of the production cooperative.
3. The trade name of the cooperative shall contain its name and the
words "production cooperative" or "artel".
4. The legal status of the production cooperatives and the rights
and duties of their members shall be defined by the laws on the
production cooperatives in conformity with the present Code.
Article 108. Formation of the Production Cooperative
1. The constituent document of the production cooperative shall be
its Rules, endorsed by the general meeting of its members.
2. The Rules of the production cooperative shall contain, in
addition to the data, indicated in Item 2 of Article 52 of the present
Code, the terms for the size of the share contributions to be made by the
cooperative members; for the structure and the order of making the share
contributions by the cooperative members and for their liability in case
of violating the obligation on making the share contributions; for the
nature and the order of the labour participation by its members in the
cooperative's activity and for their liability in case of violating the
obligation on the personal labour participation; for the order of the
distribution of the cooperative's profits and losses; for the size of and
the terms for the subsidiary liability of its members by the
cooperative's debts; for the structure and the scope of jurisdiction of
the cooperative's management bodies and the order of their
decision-making, including on the issues, the decisions on which shall be
adopted unanimously or by a qualified majority of votes.
3. The number of cooperative members shall be not less than 5
persons.
Article 109. The Property of the Production Cooperative
1. The property in the possession of the production cooperative
shall be divided into the shares of its members in conformity with the
Rules of the cooperative.
The Rules of the cooperative may decree that a certain part of the
property in the possession of the cooperative shall be comprised of the
indivisible funds, which shall be used for the purposes, defined by the
Rules.
The decision on the setting up of the indivisible funds shall be
adopted by the cooperative members unanimously, unless otherwise
stipulated by the Rules of the cooperative.
2. The member of the cooperative shall be obliged to put in, by the
moment of the cooperative's registration, not less than 10 per cent of
his share contributions; the rest shall be paid up in the course of one
year from the moment of the cooperative's registration.
3. The cooperative shall not have the right to issue shares.
4. The profit of the cooperative shall be distributed among its
members in accordance with their labour input, unless otherwise
stipulated by the law and by the Rules of the cooperative.
The property, left after the cooperative's liquidation and the
satisfaction of the claims of its creditors, shall be distributed in the
same order.
Article 110. Management in the Production Cooperatives
1. The higher management body of the cooperative shall be the
general meeting of its members.
In the cooperative with over 50 members, a supervisory council may
be established, which shall exert control over the activity of the
cooperative's executive body.
The cooperative's executive bodies shall be its management board and
(or) its chairman. They shall effect the current leadership of the
cooperative's activity and shall report to the supervisory council and to
the general meeting of the cooperative members.
Only the members of the cooperative shall have the right to be the
members of the supervisory council and to fill the post of the chairman
of the cooperative. The member of the cooperative shall not be
simultaneously a member of the supervisory council and a member of the
management board or the chairman of the cooperative.
2. The jurisdiction of the management bodies of the cooperative and
the order for their decision-making shall be defined by the law and by
the Rules of the cooperative.
3. The following functions shall be placed within the exclusive
jurisdiction of the general meeting of the members of the cooperative:
1) the amendment of the Rules of the cooperative;
2) the establishment of the supervisory council and the termination
of the powers of its members, and also the establishment and the
termination of the powers of the cooperative's executive bodies, unless
in conformity with the Rules of the cooperative this right has been
vested in its supervisory council;
3) the admittance and expelling of the cooperative members;
4) the approval of the cooperative's annual reports and accounting
balances and the distribution of its profits and losses;
5) the decision on the cooperative's reorganization and liquidation.
The Law on the Production Cooperatives and the Rules of the
cooperative may also place other issues within the exclusive jurisdiction
of the general meeting.
The issues, placed within the exclusive jurisdiction of the general
meeting or of the supervisory council of the cooperative, shall not be
turned over by these for resolution to the cooperative's executive
bodies.
4. The member of the cooperative shall be entitled to one vote in
the adoption of decisions by the general meeting.
Article 111. Termination of the Membership in the Production
Cooperative and the Transfer of the Share
1. The member of the cooperative shall have the right, at his own
discretion, to withdraw from the cooperative. In this case, he shall be
paid out the cost of his share or issued the property, corresponding to
his share; he shall also be entitled to certain other payments,
stipulated by the Rules of the cooperative.
The payment out of the cost of the share or the issue of the other
property to the retiring member of the cooperative shall be effected upon
the expiry of the fiscal year and the approval of the accounting balance
of the cooperative, unless otherwise stipulated by the Rules of the
cooperative.
2. The member of the cooperative may be expelled from the
cooperative by the decision of the general meeting in case of his
non-performance or an improper performance of his duties, imposed upon
him by the Rules of the cooperative, and also in the other cases,
stipulated by the law and by the Rules.
The member of the supervisory council or of the executive body may
be expelled from the cooperative by the decision of the general meeting
in connection with his membership in a similar cooperative.
The expelled member of the cooperative shall have the right to get
back his share contribution and to receive certain other payments,
stipulated by the Rules of the cooperative, in conformity with Item 1 of
the present Article.
3. The member of the cooperative shall have the right to turn over
his share or a part thereof to another member of the cooperative, unless
otherwise stipulated by the law and by the Rules of the cooperative.
The turning over of the share (a part thereof) to the citizen, who
is not a member of the cooperative, shall be admitted only upon the
consent of the cooperative. In this case, the other members of the
cooperative shall have the right of priority to the purchase of such a
share (a part thereof).
4. In case of the death of a member of the production cooperative,
his heirs may be admitted to the cooperative's membership, unless
otherwise stipulated by the Rules of the cooperative. If this is not the
case, the cooperative shall pay out to the heirs the cost of the share of
the deceased member of the cooperative.
5. The turning of the claim for the property onto the share of the
member of the production cooperative by the own debts of the cooperative
member shall be admitted only in case his own property proves to be
insufficient for covering such debts, in conformity with the order,
stipulated by the law and by the Rules of the cooperative. The claim by
the debts of the cooperative member shall not be turned onto the
indivisible funds of the cooperative.
Article 112. Reorganization and Liquidation of the Production
Cooperatives
1. The production cooperative may be reorganized or liquidated
voluntarily, by the decision of the general meeting of its members.
The other grounds and the procedure for the reorganization and the
liquidation of the cooperative shall be defined by the present Code and
by the other laws.
2. By the unanimous decision of its members, the production
cooperative may transform itself into an economic partnership or into a
company.
§ 4. The State-Run and Municipal Unitary Enterprises
Article 113. The Unitary Enterprise
1. The unitary enterprise shall be recognized as a commercial
organization, not endowed with the right of ownership to the property,
allotted to it by the property owner. The unitary enterprise's property
shall be indivisible and shall not be distributed according to the
instalments (the participation shares, the shares), including among the
workers of the given enterprise.
The Rules of the unitary enterprise shall contain, in addition to
the information, indicated in Item 2 of Article 52 of the present Code,
that on the subject and on the goals of the enterprise's activity, and
also on the size of its authorized fund and on the order and the sources
of its formation, except for treasury enterprises.
Only the state-run and the municipal enterprises shall be set up in
the form of unitary enterprises.
2. The property of the state-run or the municipal unitary enterprise
shall correspondingly be in the state or in the municipal ownership, and
shall belong to such an enterprise by the right of economic or operative
management.
3. The trade name of the unitary enterprise shall contain an
indication of the owner of its property.
4. The unitary enterprise shall be managed by its head, who shall be
appointed either by the owner or by the owner's authorized body, and
shall report to these.
5. The unitary enterprise shall be answerable by its obligations
with the entire property in its possession.
The unitary enterprise shall not bear responsibility by the
obligations of the owner of its property.
6. The legal status of the state-run and municipal unitary
enterprises shall be defined by the present Code and by the Law on the
State-Run and Municipal Unitary Enterprises.
Article 114. The Unitary Enterprise, Based on the Right of Economic
Management
1. The unitary enterprise, based on the right of economic
management, shall be set up by the decision of the state or the local
self-government body, authorized for this purpose.
2. The constituent document of the enterprise, based on the right of
economic management, shall be its Rules, approved by the state body or by
the local self-government body.
3. The size of the authorized fund of the enterprise, based on the
right of economic management, shall not be less than that fixed by the
Law on the State-Run and Municipal Unitary Enterprises.
4. The procedure for forming up the authorised fund of an
enterprise founded by the right of economic jurisdiction shall be
determined by a law on state and municipal unitary enterprises.
5. If upon the expiry of the fiscal year the cost of the net assets
of the enterprise, based on the right of economic management, proves to
be less than the size of its authorized fund, the body, authorized to set
up such enterprises, shall be obliged to effect, in conformity with the
established procedure, the reduction of the authorized fund. If the cost
of the net assets falls below the law-fixed amount, the enterprise may be
liquidated by the court decision.
6. In case the decision has been adopted on the reduction of the
authorized fund, the enterprise shall be obliged to inform about it its
creditors in written form.
The creditor of the enterprise shall have the right to demand that
the obligations, by which the given enterprise is the debtor, be
terminated or executed in advance and that his losses be recompensed.
7. The owner of the property of the enterprise, based on the right
of economic management, shall not be answerable by the enterprise's
obligations, with the exception of the cases, stipulated in Item 3 of
Article 56 of the present Code. This rule shall also apply to the
liability of the enterprise, which has founded the subsidiary enterprise,
by the latter's obligations.
Article 115. The Unitary Enterprise Founded by the Right of
Operative Management
1. In the cases and in the manner envisaged by a law on state and
municipal unitary enterprise a unitary enterprise may be founded by
the right of operative management (treasury enterprise) on the basis
of state or municipal property.
2. The constitutive document of the treasury enterprise shall be
its constitution approved by the state or local governmental body
authorised to do so.
3. The company name of a unitary enterprise founded by the right
of operative management shall contain an indication of the fact that
this enterprise is a treasury enterprise.
4. The rights of a treasury enterprise to the property
consolidated thereto shall be determined according to Articles 296 and
297 of the present Code and by a law on state and municipal unitary
enterprises.
5. The owner of property of a treasury enterprise shall bear
subsidiary liability for the obligations of the enterprise if its
property is insufficient.
6. The treasury enterprise may be reconstructed or liquidated in
compliance with the law on state and municipal unitary enterprises.
§ 5. The Non-Profit Organizations
Article 116. The Consumer Cooperative
1. The consumer cooperative shall be recognized as a voluntary
association of the citizens and the legal entities, based on membership
and aimed at satisfying the participants' material and other needs by its
members putting together their property share contributions.
2. The Rules of the consumer cooperative shall contain, in addition
to the information indicated in Item 2 of Article 52 of the present Code,
the terms for the size of the share contributions, made by the members of
the cooperative; for the structure and the order of making the share
contributions by the members of the cooperative, and for the
responsibility they shall bear for violating the obligation, involved in
making the share contributions; for the composition and the scope of
authority of the cooperative management bodies, and for the order of
their decision-making, including on the issues, with respect to which
decisions shall be adopted unanimously or by a qualified majority of
votes; and also for the procedure, laid down for covering the losses the
cooperative has sustained, by its members.
3. The name of the consumer cooperative shall contain an indication
of the main purpose of its activity, and also the word "cooperative", or
the words "consumer union" or "consumer company".
4. The members of the consumer cooperative shall be obliged, in the
course of 3 months after the approval of its annual balance, to cover the
sustained losses by making new contributions. In case of the
non-fulfillment of this duty, the cooperative may be liquidated by the
court decision upon the creditor's demand.
The members of the consumer cooperative shall bear the joint
subsidiary liability by its obligations within the unpaid part of the
additional contribution of every one of the cooperative members.
5. The incomes, derived by the consumer cooperative as a result of
the business activity, performed by the cooperative in conformity with
the law and with its Rules, shall be distributed among its members.
6. The legal status of the consumer cooperatives, and the rights and
duties of their members shall be defined in conformity with the present
Code and with the Law on the Consumer Cooperatives.
Article 117. The Public and Religious Organizations (Associations)
1. The public and religious organizations (associations) shall be
interpreted as the voluntary associations of the citizens, who have
united in the law-stipulated order on the basis of the community of their
interests for the purpose of satisfying their spiritual or other
non-material needs.
The public and religious organizations shall be non-profit
organizations. They shall have the right to engage in the business
activity only in order to attain the goals, in the name of which they
have been set up, and of the nature, consonant with these goals.
2. The participants (members) of the public and religious
organizations shall not retain the right to the property, which they have
passed into the possession of these organizations, including to the
membership dues. They shall not be answerable by the obligations of the
public and religious organizations, in which they participate in the
capacity of their members, while the said organizations shall not be
answerable by the obligations of their members.
3. The specifics of the legal status of the public and religious
organizations as the participants of the relations, regulated by the
present Code, shall be defined by the law.
Article 118. The Funds
1. The fund shall be interpreted for the purposes of the present
Code as a non-membership non-profit organization, instituted by the
citizens and (or) the legal entities on the basis of voluntary property
contributions and pursuing the public, charity, cultural, educational or
the other socially useful goals.
The property, transferred to the fund by its founders (founder),
shall be the fund's property. The founders shall not be answerable by the
obligations of the fund they have created, while the fund shall not be
answerable by the obligations of its founders.
2. The fund shall use the property for the purposes, defined in its
Rules. The fund shall have the right to engage in business activities,
necessary for it to attain the socially useful goals, in the name of
which the fund has been established, and of the kind consonant with these
goals. To perform the business activity, the funds shall have the right
to set up economic companies or to take part in these.
The fund shall be obliged to annually publish reports on the use of
its property.
3. The procedure for the fund's management and for the setting up of
its bodies shall be defined by its Rules, approved by its founders.
4. The Rules of the fund, in addition to the information, indicated
in Item 2 of Article 52 of the present Code, shall also contain: the name
of the fund, including the word "fund"; the information on the fund's
goal; the data on the fund's bodies, including on the board of guardians,
supervising its activities, on the order of appointing and relieving the
fund's official persons, on the place of the fund's location, and on the
fate of the fund's property in case of its liquidation.
Article 119. Amendment of the Rules and the Liquidation of the Fund
1. The Rules of the fund may be amended by the fund's bodies, if the
possibility of their amendment in this way has been stipulated by the
Rules.
If maintaining the Rules intact is fraught with the consequences,
which it was impossible to foresee when the fund was established, but the
possibility of introducing amendments into the Rules has not been
stipulated by the latter, or the Rules are not amendable by the
authorized persons, the right to effect such amendments shall be vested
in the court upon the application of the fund's bodies or the body,
authorized to exert supervision over its activities.
2. The decision on the liquidation of the fund shall be adopted only
by the court upon the application of the interested persons.
The fund may be liquidated:
1) if the fund's property is insufficient to attain its goals, and
there is no realistic hope that the property it needs may be received;
2) if the fund's stipulated goals cannot be achieved, while they
cannot be amended;
3) if in its activities the fund deviates from the goals, stipulated
in its Rules;
4) in the other law-stipulated cases.
3. In case of the fund's liquidation, its property, left after the
creditors' claims have been satisfied, shall be directed towards the
achievement of the goals, pointed out in its Rules.
Article 120. The Institutions
1. The institution shall be recognized as an organization,
established by the owner for the performance of the managerial, the
socio-cultural or the other kind of functions of the non-profit nature
and financed by him in full or in part.
The rights of the institution to the property, assigned to it, shall
be defined in conformity with Article 296 of the present Code.
2. The institution shall be answerable by its obligations with the
monetary means at its disposal. In case these are insufficient, the
subsidiary liability by its obligations shall be borne by the owner of
the corresponding property.
3. The specifics of the legal status of the individual kinds of the
state-run and of the other institutions shall be defined by the law and
by the other legal acts.
Article 121. Amalgamations of the Legal Entities (the Associations
and the Unions)
1. The commercial organizations shall have the right, by an
agreement between themselves, to establish amalgamations in the form of
associations or unions, which shall be non-profit organizations, for the
purposes of coordinating their business activities and of representing
and protecting their common property interests.
If, by the decision of its participants, upon the given association
(union) has been imposed the performance of business activities, such an
association (union) shall be transformed into an economic company or into
a partnership in accordance with the procedure, stipulated by the present
Code, or it shall set up a commercial company for the performance of
business activities, or shall participate in such a company.
2. The public and the other kind of the non-profit organizations,
including the institutions, shall have the right to voluntarily unite
into the associations (the unions) of these organizations.
The association (the union) of non-profit organizations shall be a
non-profit organization.
3. The members of the association (the union) shall retain their
independence and the rights of a legal entity.
4. The association (the union) shall not be answerable by the
obligations of its members. The members of the association (the union)
shall bear the subsidiary liability by its obligations in the amount and
in accordance with the order, stipulated by the constituent documents of
the given association.
5. The name of the association (the union) shall contain an
indication of the main object of its members' activities, with the word
"association" or "union" included into it.
Article 122. Constituent Documents of the Associations and the
Unions
1. The constituent documents of the association (the union) shall be
the constituent agreement, signed by its members, and the Rules approved
by them.
2. The constituent documents of the association (the union) shall
contain, in addition to the information indicated in Item 2 of Article 52
of the present Code, the terms for the composition and the authority of
the management bodies of the association (the union) and for the order of
their decision-making, including on the issues, the decisions on which
shall be adopted unanimously or by a qualified majority of the votes of
the association (the union) members, and also for the order, established
for distributing the property, left after the liquidation of the
association (the union).
Article 123. The Rights and Duties of the Members of the
Associations and the Unions
1. The members of the association (the union) shall have the right
to gratuitously enjoy its services.
2. The member of the association (the union) shall have the right,
at his own discretion, to withdraw from the association (the union) upon
the expiry of the fiscal year. In this case he shall bear the subsidiary
liability by the obligations of the association (the union)
proportionately to his contribution in the course of two years from the
moment of his withdrawal.
The member of the association (the union) may be expelled from it by
the decision of the remaining participants, in the cases and in
accordance with the procedure, laid down by the constituent documents of
the association (the union). Toward the liability of the expelled member
of the association (the union) shall be applied the same rules as in the
case of the member's withdrawal from the association (the union).
3. Upon the consent of the members of the association (the union), a
new participant may join it. The joining to the association (the union)
of a new member may be grounded on his subsidiary liability by the
obligations of the association (the union), which has arisen before his
joining it.
Chapter 5. Participation of the Russian Federation, of the Subjects
of the Russian Federation and of the Municipal Entities
in the Relationships, Regulated by the Civil Legislation
Article 124. The Russian Federation, the Subjects of the Russian
Federation and the Municipal Entities as the Subjects
of Civil Law
1. The Russian Federation, the subjects of the Russian Federation:
the Republics, the territories, the regions, the cities of federal
importance, the autonomous region, the autonomous areas, and also the
urban and rural settlements and the other municipal entities shall come
out in the relationships, regulated by the civil legislation, on equal
terms with the other participants of these relationships - the citizens
and the legal entities.
2. Toward the subjects of civil law, indicated in Item 1 of the
present Article, shall be applied the norms, defining the participation
of the legal entities in the relationships, regulated by the civil
legislation, unless otherwise following from the law or from the
specifics of the given subjects.
Article 125. The Order of Participation of the Russian Federation,
of the Subjects of the Russian Federation and of the
Municipal Entities in the Relationships, Regulated by
the Civil Legislation
1. The right to acquire and exercise by their actions the property
and the personal rights, and to come out in the court on behalf of the
Russian Federation and of the subjects of the Russian Federation shall be
vested in the state power bodies within the scope of their jurisdiction,
established by the acts, defining the status of these bodies.
2. The right to acquire and exercise by their actions the rights and
duties, indicated in Item 1 of the present Article, on behalf of the
municipal entities shall be vested in the local self-government bodies
within the scope of their jurisdiction, established by the acts, defining
the status of these bodies.
3. In the cases and in conformity with the procedure, stipulated by
the federal laws, by the decrees of the President of the Russian
Federation and the decisions of the Government of the Russian Federation,
by the normative acts of the subjects of the Russian Federation and of
the municipal entities, the state bodies, the local self-government
bodies, and also the legal entities and the citizens may come out on
their behalf upon their special order.
Article 126. Liability by the Obligations of the Russian Federation,
of the Subject of the Russian Federation and of the
Municipal Entity
1. The Russian Federation, the subject of the Russian Federation and
the municipal entity shall be answerable by their obligations with the
property they possess by the right of ownership, with the exception of
the property that has been assigned to the legal entities, which they
have set up by the right of economic or of operative management, and also
of the property that shall be placed only in the state or in the
municipal ownership.
The turning of the penalty onto the land and the other natural
resources in the state or in the municipal ownership shall be admitted in
the law-stipulated cases.
2. The legal entities, set up by the Russian Federation, by the
subjects of the Russian Federation and by the municipal entities, shall
not be answerable by their obligations.
3. The Russian Federation, the subjects of the Russian Federation
and the municipal entities shall not be answerable by the obligations of
the legal entities they have set up, with the exception of the
law-stipulated cases.
4. The Russian Federation shall not be answerable by the obligations
of the subjects of the Russian Federation and of the municipal entities.
5. The subjects of the Russian Federation and the municipal entities
shall not be answerable by one another's obligations and also by those of
the Russian Federation.
6. The rules, formulated in Items 2-5 of the present Article, shall
not apply to the cases, when the Russian Federation has assumed upon
itself the guarantee (surety) by the obligations of the subject of the
Russian Federation, of the municipal or the legal entity, or when the
said subjects have assumed upon themselves the guarantee (surety) by the
obligations of the Russian Federation.
Article 127. The Specifics of the Liability of the Russian
Federation and of the Subjects of the Russian
Federation in the Relationships, Regulated by the Civil
Legislation, in Which the Foreign Legal Entities,
Citizens and States Are Involved
The specifics of the liability to be borne by the Russian Federation
and by the subjects of the Russian Federation in the relationships,
regulated by the civil legislation, in which the foreign legal entities,
citizens and states are involved, shall be defined by the Law on the
Immunity of the State and of Its Property.
Subsection 3. The Objects of Civil Rights
Chapter 6. The General Provisions
Article 128. The Kinds of the Objects of Civil Rights
To the objects of civil rights shall be referred the things, among
them money and securities, and also the other kinds of the property, such
as the rights of property; the works and services; information; the
results of intellectual activities, including the exclusive right to
these (the intellectual property); the non-material values.
Article 129. The Circulation Capacity of the Objects of Civil Rights
1. The objects of civil rights may be freely alienated or may pass
from one person to another by way of the universal legal succession (by
inheritance or as a result of the reorganization of the legal entity), or
in another way, if they have not been withdrawn from circulation or
restricted in the circulation.
2. The kinds of the objects of civil rights, whose circulation shall
not be admitted (the objects, withdrawn from circulation), shall be
directly pointed out in the law.
The kinds of the objects of civil rights, which may only be
possessed by definite participants in the circulation, or whose being in
the circulation shall be admitted by a special permit (the objects with a
restricted circulation capacity), shall be defined in accordance with the
law-established procedure.
3. The land and the other natural resources shall be alienated or
shall pass from one person to another in other ways so far as their
circulation is admissible in conformity with the laws on the land and on
the other natural resources.
Article 130. The Movables and the Immovables
1. To the immovables (the immovable property, realty) shall be
referred the land plots, the land plots with mineral deposits, the
set-apart water objects and everything else, which is closely connected
with the land, i.e., such objects as cannot be shifted without causing an
enormous damage to their purpose, including the forests, the perennial
green plantations, the buildings and all kind of structures.
To the immovables shall also be referred the air-borne and sea-going
vessels, the inland navigation ships and the space objects. The law may
also refer to the immovables certain other property.
2. The things, which have not been referred to the immovables,
including money and securities, shall be regarded as the movables. The
registration of the rights to the movables shall not be required, with
the exception of the cases, pointed out in the law.
Article 131. The State Registration of the Realty
1. The right of ownership and the other rights of estate to the
immovables, the restriction of these rights, their arising, transfer and
cessation shall be liable to the state registration in the Unified State
Register, effected by the bodies carrying out the state registration
of rights to real estate and transactions in it.
Subject to the
registration shall be: the right of ownership, the right of economic
management, the right of operative management, the right of the inherited
life possession, the right of the permanent use, the mortgage, the
servitudes, and also the other rights in the cases, stipulated by the
present Code and by the other laws.
2. In the law-stipulated cases, alongside the state registration,
may be effected the special registration or the registration of the
individual kinds of the realty.
3. The body, effecting the state registration of the rights to the
realty and the deals with it, shall be obliged, upon the request of the
owner of the rights, to certify the effected registration by issuing a
document on the registered right or deals, or by making a superscription
on the document, presented for registration.
4. The body, effecting the state registration of the rights to the
realty and to the deals with it, shall be obliged to provide information
on the effected registration and on the registered rights to any person.
The information shall be issued in any one body, engaged in the
registration of the realty, regardless of the place of effecting the
registration.
5. The refusal of the state registration of the right to the realty
or of the deal with it, or the evasion by the corresponding body from
registering these, may be appealed against in the court.
6. The order of the state registration and the grounds for the
refusal thereof shall be established in conformity with the present Code
by the Law on the Registration of the Rights to the Realty and the Deals
with It.
Article 132. The Enterprise
1. The enterprise as an object of rights shall be recognized as a
property complex, used for the performance of business activities.
The enterprise in its entirety as a property complex shall be
recognized as the realty.
2. The enterprise as a whole or a part thereof may be an object of
the purchase and sale, of the mortgage, the lease and of the other deals,
connected with the establishment, the change and the cessation of the
rights of estate.
Within the enterprise as a property complex shall be included all
kinds of the property, intended for the performance of its activities,
including the land plots, the buildings, the structures, the equipment,
the implements, the raw materials, the products, the rights, the claims
and the debts, and also the rights to the symbols, individualizing the
given enterprise, its products, works and services (such as the trade
name, the trade and the service marks), as well as the other exclusive
rights, unless otherwise stipulated by the law or by the agreement.
Article 133. The Indivisible Things
The thing, whose division in kind is impossible without changing its
purpose, shall be interpreted as indivisible.
The specifics of apportioning a share in the right of ownership to
the indivisible thing shall be defined by the rules, laid down in
Articles 252 and 258 of the present Code.
Article 134. The Composite Things
In case a single whole is formed of heterogeneous things,
presupposing their use for a single purpose, they shall be regarded as a
single thing (a composite thing).
The effect of the deal, made with respect to a composite thing,
shall concern all its component parts, unless otherwise stipulated by the
agreement.
Article 135. The Principal Thing and Its Accessory
The thing, intended for the servicing of another thing - the
principal one - and connected with it by the common purpose (an
accessory), shall share the fate of the principal thing, unless otherwise
stipulated by the agreement.
Article 136. The Fruits, Products and Incomes
The receipts, resulting from the use of the property (the fruits,
products and incomes), shall belong to the person, who has been using
this property on the legal grounds, unless otherwise stipulated by the
law, by the other legal acts or by the agreement on the use of the said
property.
Article 137. The Animals
Toward the animals shall be applied the general rules on the
property, unless otherwise stipulated by the law or by the other legal
acts.
While exercising the rights, a cruel treatment of the animals,
contradicting the principles of humanity, shall not be admitted.
Article 138. The Intellectual Property
In the cases and in conformity with the procedure, established by
the present Code and by the other laws, an exclusive right (the
intellectual ownership) of the citizen or of the legal entity shall be
recognized to the results of the intellectual activity and the means of
the individualization of the legal entity, of the manufactured products,
of the performed works and of the rendered services (the trade name, the
trade and the service mark, etc.), equalized with them.
The use of the results of the intellectual activity and of the means
of individualization, which are the object of the exclusive rights, may
be effected by the third persons only upon the consent of the owner of
the rights.
Article 139. The Official and the Commercial Secret
1. The information shall be regarded as an official or a commercial
secret, if it presents an actual or a potential commercial value because
of its being unknown to the third persons, if there is no free access to
it on legal grounds and if its owner is taking measures to protect its
confidentiality. The data, which shall not be regarded as an official or
a commercial secret, shall be defined by the law and by the other legal
acts.
2. The information, which is an official or a commercial secret,
shall be protected in the ways, stipulated by the present Code and by the
other laws.
The persons, who have obtained by illegal methods the information,
which is an official or a commercial secret, shall be obliged to
recompense the inflicted losses. The same obligation shall be imposed
upon the workers, who have divulged an official or a commercial secret
despite the labour agreement, including the contract, and upon the
counteragents, who have done so despite the civil law agreement.
Article 140. The Money (Hard Currency)
1. The rouble shall be the legal means of payment, which shall be
accepted by its face value on the entire territory of the Russian
Federation.
The payments on the territory of the Russian Federation shall be
effected both in cash and cashless.
2. The cases of, the procedure and the terms for the use of foreign
currency on the territory of the Russian Federation shall be defined by
the law or in conformity with the established order.
Article 141. The Currency Valuables
The kinds of property, recognized as the currency valuables, and the
order established for the deals made with them, shall be defined by the
Law on the Currency Regulation and the Currency Control.
The right of ownership to the currency valuables shall be protected
in the Russian Federation on the general grounds.
Chapter 7. The Securities
Article 142. The Security
1. The security shall be a document, confirming, with the observance
of the established form and obligatory requisites, the property rights,
whose exercising or transfer shall be possible only upon its
presentation.
With the transfer of the security, all the rights, certified by it,
shall also be transferred in their aggregate.
2. In the cases, stipulated by the law, or in conformity with the
order, established by the law for the exercising and the transfer of the
rights, confirmed by the security, it shall be sufficient to present
proofs of their being confirmed in the special register (a common-type or
a computerized one).
Article 143. The Kinds of Securities
To the securities shall be referred: the government bond, the bond,
the promissory note, the cheque, the deposit and the savings
certificates, the savings-bank book to bearer, the bill of lading, the
share, the privatization securities and also the other documents, which
have been referred to the securities by the laws on the securities or in
conformity with the order, established by these laws.
Article 144. The Demands of the Security
1. The kinds of the rights, certified by the securities, the
obligatory requisites of the securities, the demands made on the form of
the securities and the other indispensable requirements shall be defined
by the law or in conformity with the law-established order.
2. The absence of the indispensable requisites of the security or
the non-correspondence of the security to the form, established for it,
shall entail its insignificance.
Article 145. The Subjects of the Rights, Certified by the Security
1. The rights, certified by the security, may belong to:
1) the bearer of the security (the security to bearer);
2) the person, named in the security (the registered security);
3) the person, named in the security, who shall exercise these
rights himself or shall appoint by his instruction (order) another
authorized person (the order security);
2. The law may preclude the possibility of issuing a certain kind of
securities as the registered ones, or the order ones, or those to bearer.
Article 146. Transfer of the Rights by the Security
1. To effect the transfer to another person of the rights, certified
by the security to bearer, it shall be sufficient to hand over the given
security to the said person.
2. The rights, certified by the registered security, shall be
transferred in accordance with the order, established for ceding the
demands (the cession). In conformity with Article 390 of the present
Code, the person, transferring the right by the security, shall bear
responsibility for the invalidity of the corresponding demand, but not
for its non-execution.
3. The rights by the order security shall be transferred by making a
transfer superscription (endorsement) on the security in question. The
endorser shall bear responsibility not only for the existence of the
right, but also for its exercising.
The endorsement, effected on the security, shall transfer all the
rights, certified by the security, to the person, to whom, or to whose
jurisdiction, the rights by the security are being transferred - i.e., to
the endorsee. The endorsement shall be either a blank one (without the
indication of the person, to whom or to whose jurisdiction the execution
shall be due), or an order one (indicating the person, to whom or to
whose jurisdiction the execution shall be due).
The endorsement may amount only to the order to exercise the rights,
certified by the security, without transferring these rights to the
endorsee (the turnover endorsement). In this case, the endorsee shall
come out in the capacity of the representative.
Article 147. Execution by the Security
1. The person, who has issued the security, and all those persons,
who have endorsed it, shall bear the joint liability to its legal owner.
In case of the satisfaction of the demand of the legal owner of the
security concerning the execution of the obligation, certified by it, by
one or by several persons from among those who have assumed the
obligation by the security to him, they shall acquire the right of the
reverse demand (the right of regress) to the rest of the persons, who
have assumed the obligation by the security.
2. The refusal to execute the obligation, certified by the security,
with a reference to the absence of the ground for the obligation or for
its invalidity, shall not be admitted.
The owner of the security, who has discovered that the security has
been forged or falsified, shall have the right to claim that the person,
who has handed over this paper to him, properly execute the obligation,
certified by the security, and recompense the losses.
Article 148. Restoration of the Security
The restoration of the rights by the lost securities to bearer and
by the order securities shall be effected by the court in conformity with
the procedure, stipulated by the procedural legislation.
Article 149. The Non-Documentary Securities
1. In the law-stipulated cases or in conformity with the
law-established procedure, the person, who has been granted a special
license, shall be able to effect the fixation of the rights, confirmed by
the registered or by the order security, including in the non-documentary
form (using the computer technology, etc.). To this form of the fixation
of the rights shall be applied the rules, laid down for the securities,
unless otherwise following from the specifics of the fixation.
The person, who has effected the fixation of the right in the
non-documentary form, shall be obliged, upon the demand of the owner of
the right, to issue to him the document, testifying to the fact that the
right has been fixed.
The rights, certified by way of the above-said fixation, the
procedure for the official fixation of the rights and the owners of the
rights, for the documentary confirmation of the entries and for
performing operations with the non- documentary securities shall be
defined by the law or in conformity with the procedure, established by
it.
2. Operations with the non-documentary securities may be performed
only drawing on the services of the person, who has been officially
authorized to make the entries on the rights. The transfer, granting and
restriction of the rights shall all be officially fixed by this person,
who shall bear responsibility for the safety of the official entries, for
guaranteeing their confidentiality, for the issue of true information on
such entries, and for making official entries on the performed
operations.
Chapter 8. The Non-Material Values and Their Protection
Article 150. The Non-Material Values
1. The life and health, the personal dignity and personal immunity,
the honour and good name, the business reputation, the immunity of
private life, the personal and family secret, the right of a free
movement, of the choice of the place of stay and residence, the right to
the name, the copyright and the other personal non-property rights and
non-material values, possessed by the citizen since his birth or by force
of the law, shall be inalienable and untransferable in any other way. In
the cases and in conformity with the procedure, stipulated by the law,
the personal non-property rights and the other non-material values,
possessed by the deceased person, may be exercised and protected by other
persons, including the heirs of their legal owner.
2. The non-material values shall be protected in conformity with the
present Code and with the other laws in the cases and in the order,
stipulated by these, and also in those cases and within that scope, in
which the use of the ways of protecting the civil rights (Article 12)
follow from the substance of the violated non-material right and from the
nature of the consequences of this violation.
Article 151. Compensation of the Moral Damage
If the citizen has been inflicted a moral damage (the physical or
moral sufferings) by the actions, violating his personal non-property
rights or infringing upon the other non- material values in his
possession, and also in the other law-stipulated cases, the court may
impose upon the culprit the duty to pay out the monetary compensation for
the said damage.
When determining the size of compensation for the moral damage, the
court shall take into consideration the extent of the culprit's guilt and
the other circumstances, worthy of attention. The court shall also take
into account the depth of the physical and moral sufferings, connected
with the individual features of the person, to whom the damage has been
done.
Article 152. Protection of the Honour, Dignity and Business
Reputation
1. The citizen shall have the right to claim through the court that
the information, discrediting his honour, dignity or business reputation
be refuted, unless the person who has spread such information proves its
correspondence to reality.
By the demand of the interested persons, the citizen's honour and
dignity shall also be liable to protection after his death.
2. If the information, discrediting the honour, dignity or business
reputation of the citizen, has been spread by the mass media, it shall be
refuted by the same mass media.
If the said information is contained in the document, issued by an
organization, the given document shall be liable to an exchange or
recall.
In the other cases, the procedure for the refutation shall be ruled
by the court.
3. The citizen, with respect to whom the mass media have published
the information, infringing upon his rights or his law-protected
interests, shall have the right to publish his answer in the same mass
media.
4. If the ruling of the court has not been executed, the court shall
have the right to impose upon the culprit a fine, to be exacted in the
amount and in the order, stipulated by the procedural legislation, into
the revenue of the Russian Federation. The payment of the fine shall not
exempt the culprit from the duty to perform the action, ruled by the
court decision.
5. The citizen, with respect to whom the information, discrediting
his honour, dignity or business reputation has been spread, shall have
the right, in addition to the refutation of the given information, also
to claim the compensation of the losses and of the moral damage, caused
by its spread.
6. If the person, who has spread the information, discrediting the
honour, dignity or business reputation of the citizen, cannot be
identified, the citizen shall have the right to turn to the court with
the demand that it recognize the spread information as not corresponding
to reality.
7. The rules of the present Article on the protection of the
business reputation of the citizen shall be applied, correspondingly, to
the protection of the business reputation of the legal entity.
Subsection 4. The Deals and the Representation
Chapter 9. The Deals
§ 1. The Concept, the Kinds and the Form of the Deals
Article 153. The Concept of the Deal
The deals shall be interpreted as the actions, performed by the
citizens and by the legal entities, which are aimed at the establishment,
the amendment or the cessation of the civil rights and duties.
Article 154. The Agreements and the Unilateral Deals
1. The deals may be bilateral or multilateral (agreements), and also
unilateral.
2. The deal shall be regarded as unilateral, if for its performance
in conformity with the law, with the other legal acts or with the
agreement between the parties, the expression of the will of only one
party to it is necessary and sufficient.
3. To conclude an agreement, the expression of the agreed will of
the two parties (bilateral deals), or of the three or more parties
(multilateral deals) shall be required.
Article 155. The Duties by the Unilateral Deal
The unilateral deal shall create duties for the person, who has
effected it. It shall create duties for other persons only in the cases,
established by the law or by an agreement with these persons.
Article 156. Legal Regulation of the Unilateral Deals
Toward the unilateral deals shall be correspondingly applied the
general provisions on the obligations and on the agreements, so far as
this does not contradict the law, the unilateral character and the
substance of the deal.
Article 157. The Deals, Made Under a Condition
1. The deal shall be regarded as made under the suspensive
condition, if the parties have made the arising of the rights and duties
dependent on the circumstance, about which it is unknown, whether it
will, or will not, take place.
2. The deal shall be regarded as made under the subsequent
condition, if the parties have made the cessation of the rights and
duties dependent upon the circumstance, about which it is unknown,
whether it will, or will not, take place.
3. If the arrival of the condition has been obstructed in bad faith
by the party, for which its taking place is undesirable, the said
condition shall be recognized as having taken place.
If the arrival of the condition has been obstructed in bad faith by
the party, for which its taking place is desirable, the said condition
shall be recognized as not having taken place.
Article 158. The Form of the Deals
1. The deals shall be effected orally or in written form (simple or
notarial).
2. The deal, which may be made orally, shall be regarded as having
been effected also in the case, when the behaviour of the person clearly
testifies to his will to effect the deal.
3. Silence shall be recognized as the expression of the will to
effect the deal in the cases, stipulated by the law or by the agreement
between the parties.
Article 159. The Oral Deals
1. The deal, for which no written (simple or notarial) form has been
stipulated by the law or by the agreement between the parties, may be
effected orally.
2. Unless otherwise ruled by the agreement between the parties, all
the deals, executed at the moment of their being made, may be effected
orally, with the exception of those, for which the notarial form has been
established, and also of those, the non-observance of the simple written
form of which causes their invalidity.
3. The deals, effected in the execution of the agreement, concluded
in written form, may by the agreement of the parties be effected orally,
unless this contradicts the law, the other legal acts and the agreement.
Article 160. The Written Form of the Deal
1. The deal in written form shall be effected by way of compiling a
document, expressing its content and signed by the person or by the
persons, who are effecting the deal, or by the persons, properly
authorized by them to do so.
The bilateral (multilateral) deals may be made in the ways,
stipulated by Items 2 and 3 of Article 434 of the present Code.
The law, the other legal acts and the agreement between the parties
may decree additional requirements, to which the form of the deal shall
correspond (it shall be made on the form of a definite kind, shall be
certified by the stamp, etc.), and also the consequences of not
satisfying these requirements. If such consequences have not been
stipulated, the consequences of not observing the simple written form of
the deal shall be applied (Item 1 of Article 162).
2. The use in effecting the deals of a facsimile reproduction of the
signature, made with the assistance of the means of the mechanical or the
other kind of copying, of the electronic-numerical signature or of
another analogue of the sign manual shall be admitted in the cases and in
the order, stipulated by the law and by the other legal acts, or by the
agreement of the parties.
3. If the citizen, as a result of a physical defect, illness or
illiteracy cannot put down his signature himself, another citizen may
sign the deal upon his request. The latter's signature shall be certified
by the notary or by another official person, possessing the right to
perform such kind of the notarial action, with the indication of the
reasons, by force of which the person, effecting the deal, was unable to
put under it his sign manual himself.
However, in effecting the deals, indicated in Item 4, Article 185 of
the present Code, and in issuing warrants for their effecting, the
signature of the person, signing the deal, may also be certified by the
organization, where the citizen, who is unable to put under it his sign
manual himself, works, or by the administration of the in-patient medical
institution, where he is undergoing medical treatment.
Article 161. The Deals, Made in the Simple Written Form
1. Shall be effected in the simple written form, with the exception
of the deals, requiring notarial certification:
1) the deals of the legal entities between themselves and with the
citizens;
2) the deals of the citizens between themselves to the sum at least
ten times exceeding the minimum size of wages, fixed by the law, and in
the law-stipulated cases - regardless of the sum of the deal.
2. The observance of the simple written form shall not be required
for the deals, which, in conformity with Article 159 of the present Code,
may be effected orally.
Article 162. The Consequences of the Non-observance of the Simple
Written Form of the Deal
1. The non-observance of the simple written form of the deal shall
in the case of a dispute deprive the parties of the right to refer to the
testimony for the confirmation of the deal and of its terms, while not
depriving them of the right to cite the written and the other kind of
proofs.
2. In the cases, directly pointed out in the law or in the agreement
between the parties, the non-observance of the simple written form of the
deal shall entail its invalidity.
3. The non-observance of the simple written form in a foreign
economic deal shall entail its invalidity.
Article 163. The Notarially Certified Deal
1. The notarial certification of the deal shall be performed by
making upon the document, corresponding to the requirements of Article
160 of the present Code, of the certifying superscription by the notary
or by another official person, possessing the right to perform such kind
of the notarial action.
2. The notarial certification of the deals shall be obligatory:
1) in the cases, pointed out by the law;
2) in the cases, stipulated by the parties' agreement, even if this
form is not required for the given kind of the deals by the law.
Article 164. The State Registration of the Deals
1. The deals with the land and with the other realty shall be
subject to the state registration in the cases and in conformity with the
order, stipulated by Article 131 of the present Code and by the Law on
the Registration of the Rights to the Realty and the Deals with It.
2. The law may decree the state registration of the deals with the
realty of certain kinds.
Article 165. The Consequences of the Non-Observance of the Notarial
Form of the Deal and of the Requirement for Its
Registration
1. The non-observance of the notarial form of the deal and, in the
law-stipulated cases, of the requirement for its state registration,
shall entail its invalidity. Such kind of the deal shall be regarded as
insignificant.
2. If one of the parties has executed, in full or in part, the deal,
requiring the notarial certification, while the other party has been
evading such certification of the deal, the court shall have the right,
upon the claim of the party, which has executed the deal, to recognize
the deal as valid. In this case, no subsequent certification of the deal
shall be required.
3. If the deal, requiring the state registration, has been made in
the proper form, but one of the parties is evading its registration, the
court shall have the right, upon the claim of the other party, to adopt
the decision on the registration of the deal. In this case the deal shall
be registered in conformity with the court ruling.
4. In the cases, stipulated by Items 2 and 3 of the present Article,
the party, ungroundlessly evading the notarial certification or the state
registration of the deal, shall be obliged to recompense to the other
party the losses, inflicted by the delay in the effecting or in the
registration of the deal.
§ 2. The Invalidity of the Deals
Article 166. The Disputable and the Insignificant Deals
1. The deal shall be invalid on the grounds, established by the
present Code, by force of its being recognized as such by the court (a
disputable deal), or regardless of such recognition (an insignificant
deal).
2. The claim for recognizing the disputed deal to be invalid may be
lodged by the persons, pointed out in the present Code.
The claim for the application of the consequences of an
insignificant deal may be submitted by any interested person. The court
shall also have the right to apply such consequences on its own
initiative.
Article 167. The General Provisions on the Consequences of the
Invalidity of the Deal
1. The invalid deal shall not entail legal consequences, with the
exception of those involved in its invalidity, and shall be invalid from
the moment of its effecting.
2. If the deal has been recognized as invalid, each of the parties
shall be obliged to return to the other party all it has received from it
by the deal, and in the case of such return to be impossible in kind
(including when the deal has been involved in the use of the property,
the work performed or the service rendered), its cost shall be
recompensed in money - unless the other consequences of the invalidity of
the deal have been stipulated by the law.
3. If it follows from the content of the disputed deal that it may
only be terminated for the future, the court, while recognizing the deal
to be invalid, shall terminate its operation for the future.
Article 168. Invalidity of the Deal Not Corresponding to the Law or
to the Other Legal Acts
The deal, which does not correspond to the requirements of the law
or of the other legal acts, shall be regarded as insignificant, unless
the law establishes that such a deal is disputable or stipulates the
other consequences of the breach.
Article 169. Invalidity of the Deal, Made for the Purpose,
Contradicting the Foundations of the Law and Order, and
of Morality
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.
If the malicious intent has been found on the part of both parties
to such a deal, in the case of the execution of the deal by both parties,
all they have gained by the deal shall be exacted from them into the
revenue of the Russian Federation, and in the case of the deal being
executed by one party, into the revenue of the Russian Federation shall
be exacted all the gain by the deal, derived by the other party, and also
all that was due from it to the first party in compensation of the gain.
If the malicious intent has been found in only one party to such a
deal, all it has gained by the deal shall be returned to the other party,
while what the latter has received, or what is due to it in compensation
of the executed, shall be exacted into the revenue of the Russian
Federation.
Article 170. Invalidity of the Sham and of the Feigned Deal
1. 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.
2. The feigned deal, i.e., the deal, which has been effected for the
purpose of screening another deal, shall be regarded as insignificant.
Toward the deal, which has actually been intended, shall be applied the
relevant rules, with account for its substance.
Article 171. Invalidity of the Deal, Made by the Citizen, Recognized
as Legally Incapable
1. The deal, effected by the citizen, who has been recognized as
legally incapable on account of a mental derangement, shall be regarded
as insignificant.
Each of the parties to such a deal shall be obliged to return to the
other party all it has received in kind, and if it is impossible to
return what has been received in kind - to recompense its cost in money.
Besides that, the legally capable party shall also be obliged to
recompense to the other party the actual damage the latter has sustained,
if the legally capable party has been aware, or should have been aware,
of the legal incapability of the other party.
2. In the interest of the citizen, recognized as legally incapable
on account of a mental derangement, the deal he has effected may be
recognized by the court as valid upon the demand of his guardian, if it
has been made to the benefit of the said citizen.
Article 172. Invalidity of the Deal, Made by the Minor Below 14
Years of Age
1. The deal, effected by the minor, who has not reached 14 years of
age (the young minor), shall be regarded as invalid. Toward such a deal
shall be applied the rules, stipulated by the second and the third
paragraphs of Item 1 of Article 171 of the present Code.
2. In the interest of the young minor, the deal he has effected may
be recognized by the court as valid upon the demand of his parents,
adopters or guardian, if it has been made to the benefit of the young
minor.
3. The rules of the present Article shall not concern the petty
everyday and other kind of deals, effected by the young minors, which
they have the right to make independently in conformity with Article 28
of the present Code.
Article 173. Invalidity of the Deal, Made by the Legal Entity, Which
Is Beyond the Scope of Its Legal Capacity
The deal, effected by the legal entity in contradiction to the goals
of the activity, definitely restricted in its constituent documents, or
by the legal entity, which has no license for the performance of the
corresponding activity, may be recognized by the court as invalid upon
the claim of this legal entity, of its founder (participant), or of the
state body, exerting control over the activity of the legal entity, if it
has been proved that the other party to the deal has been aware, or
should have been aware, of its being illegal.
Article 174. The Consequences of the Restriction of Powers for
Making the Deal
If the powers of the person for effecting the deal have been
restricted by the agreement, or the powers of the legal entity's body
have been restricted by its constituent documents, as compared to the way
they have been delineated in the warrant or in the law, or to the extent
to which they may be regarded as evident from the actual setting, in
which the deal is being effected, and if, while effecting the deal, such
person or such body have trespassed the borders of such restrictions, the
deal may be recognized by the court as invalid upon the claim of the
person, in whose interest the said restrictions have been imposed, only
in the cases, when it has been proved that the other party to the deal
has been aware, or should have been aware, of the said restrictions.
Article 175. Invalidity of the Deal, Made by the Minor of 14-18
Years of Age
1. The deal, effected by the minor, aged from 14 to 18 years,
without the consent of his parents, adopters or his trustee, in the cases
when such consent is required in conformity with Article 26 of the
present Code, may be recognized by the court as invalid upon the claim of
the parents, adopters or the trustee.
If such a deal has been recognized as invalid, the rules, stipulated
by the second and the third paragraphs of Item 1 of Article 171 of the
present Code, shall be correspondingly applied.
2. The rules of the present Article shall not concern the deals of
the minors, who have acquired the full legal capacity.
Article 176. Invalidity of the Deal, Made by the Citizen Whose Legal
Capacity Has Been Restricted by the Court
1. The deal, involved in the disposal of the property, which has
been effected without the consent of his trustee by the citizen, whose
legal capacity has been restricted by the court on account of his abuse
of alcohol or drug addiction, may be recognized by the court as invalid
upon the claim of the trustee.
If such a deal has been recognized as invalid, the rules, stipulated
by the second and the third paragraphs of Item 1 of Article 171 of the
present Code, shall be correspondingly applied.
2. The rules of the present Article shall not concern the petty
everyday deals, which the citizen, restricted in his legal capacity, has
the right to effect independently in conformity with Article 30 of the
present Code.
Article 177. Invalidity of the Deal, Made by the Citizen, Incapable
of Realizing the Meaning of His Actions or of Keeping
Them Under Control
1. The deal, effected by the citizen, who, while being legally
capable, at the moment of making the deal was in such a state that he was
incapable of realizing the meaning of his actions or of keeping them
under control, may be recognized by the court as invalid upon the claim
of this citizen or of the other persons, whose rights or law-protected
interests have been violated as a result of its being effected.
2. The deal, effected by the citizen, who has been recognized as
legally incapable at a later date, may be recognized by the court as
invalid upon the claim of his guardian, if it has been proved that at the
moment of making the deal, the citizen was incapable of realizing the
meaning of his actions or of keeping them under control.
3. If the deal has been recognized as invalid on the ground of the
present Article, the rules, stipulated by the second and the third
paragraphs of Item 1 of Article 171 of the present Code, shall be
correspondingly applied.
Article 178. Invalidity of the Deal, Made Under the Impact of
Delusion
1. The deal, effected under the impact of the delusion, which has
been of an essential importance, may be recognized by the court as
invalid upon the claim of the party, which has acted under the impact of
the delusion.
Of an essential importance shall be the delusion about the nature of
the deal, or about the identity of the features of its object, which
essentially narrow down the possibility of its use for the intended
purpose. The delusion about the motives of the deal shall not be regarded
as essential.
2. If the deal has been recognized as invalid as that effected under
the impact of the delusion, the rules, stipulated by Item 2, Article 167
of the present Code, shall be correspondingly applied.
In addition to that, the party, upon whose claim the deal has been
recognized as invalid, shall have the right to claim from the other party
the compensation of the actual damage inflicted upon it, if it proves
that the delusion has arisen through the fault of the other party. If
this has not been proven, the party, upon whose claim the deal has been
recognized as invalid, shall be obliged to recompense to the other party
upon its claim the actual damage inflicted upon it, even if the delusion
has arisen on account of the circumstances, not depending on the deluded
party.
Article 179. Invalidity of the Deal, Made Under the Impact of the
Fraud, Coercion, a Threat or an Ill-Intentioned
Agreement of the Representative of One Party with the
Other Party, or of the Coincidence of Ill Circumstances
1. The deal, effected under the impact of the fraud, coercion, a
threat or an ill-intentioned agreement of the representative of one party
with the other party, and also the deal, which the person has been forced
to make on the extremely unfavourable terms because of the coincidence of
ill circumstances, while this has been made use of by the other party
(the bondage deal), may be recognized as invalid by the court upon the
claim of the victim.
2. If the deal has been recognized as invalid on one of the grounds,
pointed out in Item 1 of the present Article, all that the other party
has received by the deal shall be returned by it to the victim, and in
case it is impossible to return all this in kind, its cost shall be
recompensed in money. The property, which the victim has received by the
deal from the other party, shall be passed into the revenue of the
Russian Federation. In case of the impossibility to pass the property
into the revenue of the state in kind, its cost shall be exacted in
money. In addition, the victim shall be recompensed by the other party
all the actual damage inflicted upon him.
Article 180. The Consequences of the Invalidity of a Part of the
Deal
The invalidity of a part of the deal shall not entail the invalidity
of its other parts, if it may be supposed that the deal could have been
effected without the incorporation into it of the invalidated part.
Article 181. The Term of Legal Limitation by the Invalid Deals
1. The claim for the application of the consequences of the
invalidity of an insignificant deal may be filed within the term of ten
days from the date, when its execution has begun.
2. The claim for recognizing the disputed deal as invalid and for
the application of the consequences of its invalidity shall be filed
within one year from the date of the cessation of the coercion or the
threat, under the impact of which the deal has been made (Item 1 of
Article 179), or from the date, when the plaintiff has learned, or should
have learned, about the other circumstances, which are the ground for
invalidating the deal.
Chapter 10. The Representation. The Warrant
Article 182. The Representation
1. The deal, effected by one person (the representative) on behalf
of another person (the representee) by force of the power, based on the
warrant, on the indication of the law or on the act, issued by the state
body or by the local self-government body, authorized for this purpose,
shall directly create, amend or terminate the civil rights and duties of
the representee.
The power may also stem from the setting, in which the
representative operates (the salesman in retail trade, the cashier,
etc.).
2. The persons, who operate in the interest of the other persons,
but on their own behalf (the trade agents, the trustees of a bankrupt's
estate, the executors of the will, etc.), and also the persons,
authorized to enter into negotiations on the deals, which may be possibly
effected in the future, shall not act as representatives.
3. The representative shall not effect the deals on behalf of the
representee in his own interest. Neither shall he effect such deals in
the interest of another person, whose representative he is at the same
time, with the exception of the cases of the commercial representation.
4. The effecting through the representative of the deal, which by
its nature shall be effected only in person, and also of the other deals,
which have been pointed out in the law, shall not be admitted.
Article 183. The Effecting of the Deal by an Unauthorized Person
1. If the deal has been effected on behalf of the other person in
the absence of relevant powers, or in case such powers have been
exceeded, the deal shall be regarded as made on behalf and in the
interest of the person who has made it, unless the other person (the
representee) subsequently directly approves of such a deal.
2. The subsequent approval of the deal by the representee shall
create, amend and terminate for him the civil rights and duties by the
given deal from the moment of its being effected.
Article 184. The Commercial Representation
1. The trade agent shall be the person, who constantly and
independently represents and acts on behalf of businessmen in their
concluding agreements in the sphere of business activities.
2. The simultaneous commercial representation of different parties
in the deal shall be admitted upon the consent of these parties and in
the other law-stipulated cases. The trade agent shall be obliged to
execute the orders he has been given with the circumspection of a common
businessman.
The trade agent shall have the right to claim the payment of the
agreed remuneration and the compensation of the expenses, he has incurred
while executing the commission, from the parties to the agreement in
equal shares, unless otherwise stipulated by the agreement between them.
3. The commercial representation shall be performed on the ground of
a commission contract, concluded in written form and containing
instructions on the agent's powers, and in the absence of such
instructions - also the warrant.
The trade agent shall be obliged to keep in secret the information
on the commercial deals even after the execution of the commission given
to him.
4. The specific features of the commercial representation in the
individual spheres of business activities shall be established by the law
and by the other legal acts.
Article 185. The Warrant
1. The warrant shall be recognized as the written authorization
document, granted by one person to the other person for the purpose of
representing him before the third persons. The written authorization
document for effecting the deal by the representative may be presented by
the representee directly to the corresponding third person.
2. The warrant for effecting the deals, requiring the notarial form,
shall be notarially certified, with the exception of the law-stipulated
cases.
3. To the notarially certified warrants shall be equalized:
1) the warrants of the servicemen and of the other persons,
undergoing medical treatment in military hospitals and sanatoria, and in
other military medical institutions, certified by the head of such an
institution, by his deputy for medicine, by the senior doctor, or by the
doctor on duty;
2) the warrants of the servicemen, and in the places of the
stationing of military units, formations, institutions and military
educational establishments, where there are no notary's offices or other
bodies, performing notarial actions, also the warrants of the workers and
employees, of their family members and of the family members of the
servicemen, certified by the commander (the head) of this unit,
formation, institution or establishment;
3) the warrants of the persons, maintained in the places of the
deprivation of freedom (in the prisons and the prison camps), certified
by the head of the corresponding place of the deprivation of freedom;
4) the warrants of the adult legally capable citizens, staying at
the institutions for the social maintenance of the population, certified
by the administration of the given institution or by the head (the deputy
head) of the corresponding body for the social maintenance of the
population.
4. The warrant for the receipt of the wages and the other payments,
connected with labour relations, for the receipt of the author's and the
inventor's fees, of the pensions, allowances and grants, of the citizens'
deposits in the banks and of their correspondence, including money orders
and parcels, may also be certified by the organization, in which the
trustee works or studies, by the housing-maintenance organization at the
place of his residence and by the administration of the in-patient
medical institution, in which he is undergoing medical treatment.
A power of attorney for the drawing by a representative of a citizen
of his deposit in a bank, or monetary funds from his bank account, or for
the receipt of correspondence addressed thereto in organizations of
communications, and also for the making on behalf of a citizen of any
other transactions mentioned in Paragraph One of the present Item may be
attested by the relevant bank or organization of communications. Such
power of attorney shall be attested free of charge.
5. The warrant, granted on behalf of the legal entity, shall bear
the signature of its head or of the other person, authorized for this
action by its constituent documents, and shall be certified by the stamp
of this organization.
The warrant, granted on behalf of the legal entity, which is based
on the state or municipal property, for the receipt or for the issue of
money and of other property values, shall also be signed by the chief
(senior) accountant of this organization.
Article 186. The Period of the Warrant
1. The period of the warrant shall not exceed three years. If no
term has been indicated in it, the warrant shall stay in force in the
course of one year from the date of its granting.
The warrant, in which no date of its granting has been indicated,
shall be regarded as insignificant.
2. The notarially certified warrant, intended for the performance of
actions abroad and containing no indication of the term of its operation,
shall stay in force until it is revoked by the person, who has granted
it.
Article 187. Transfer of the Warrant
1. The person, to whom the warrant has been granted (the warrantee)
shall be obliged to perform the actions, for which he has been
authorized, in person. He shall be able to transfer their performance to
another person, if he is authorized to do so by the warrant, or if he has
been forced to do so on account of the circumstances in order to protect
the interests of the person, who has granted him the warrant (the
warrantor).
2. The person, who has transferred the power of attorney to another
person, shall be obliged to notify about it the warrantor, and to pass to
him all the essential information on the person, to whom he has
transferred the said power. The failure to discharge this duty shall
impose upon the person, who has transferred the power of attorney by the
warrant, the same responsibility for the actions of the person, to whom
he has passed the power, as he would have borne for his own actions.
3. The warrant, granted by way of transferring the power of
attorney, shall be notarized, with the exception of the cases, stipulated
in Item 4 of Article 185 of the present Code.
4. The period of operation of the warrant, granted by way of
transferring the power of attorney, shall not exceed the period of the
warrant, on the ground of which it has been granted.
Article 188. Withdrawal of the Warrant
1. The operation of the warrant shall be terminated as a result of:
1) the expiry of the period of the warrant;
2) the revoking of the warrant by the person, who has granted it;
3) refusal on the part of the person, to whom is has been granted;
4) the termination of the legal entity, on whose behalf the warrant
has been granted;
5) the termination of the legal entity, in whose name the warrant
has been granted;
6) the death of the citizen, who has granted the warrant, or his
recognition as legally incapable, partially capable or missing;
7) the death of the citizen, to whom the warrant has been granted,
or his recognition as legally incapable, partially capable or missing.
2. The person, who has granted the warrant (the warrantor), shall
have the right at any time to revoke the warrant or the transfer of the
warrant, while the person, to whom the warrant has been granted (the
warrantee), shall have the right at any time to reject it. An agreement
on the renouncement of these rights shall be insignificant.
3. The transfer of the warrant shall lose power with the termination
of the warrant.
Article 189. The Consequences of the Termination of the Warrant
1. The person, who has granted the warrant and who has subsequently
revoked it, shall be obliged to notify about it the person, to whom the
warrant has been issued, and also the third persons he knows, for the
representation before whom the warrant has been granted. The same
responsibility shall be imposed upon the legal successors of the
warrantor, in the cases of the termination of the warrant on the grounds,
stipulated in Subitems 4 and 6 of Item 1 of Article 188 of the present
Code.
2. The rights and duties, which have arisen as a result of the
actions of the person, to whom the warrant has been granted (the
warrantee), before the moment when he has learned, or should have
learned, about its termination, shall stay in force for the warrantor and
his legal successors with respect to the third persons. This rule shall
not be applied, if the third person has been aware, or should have been
aware, of the fact that the operation of the warrant has been terminated.
3. After the termination of the warrant, the warrantee or his legal
successors shall be obliged to immediately return it.
Subsection 5. The Term. The Limitation of Actions
Chapter 11. The Counting of the Term
Article 190. Definition of the Term
The term, established by the law, by the other legal acts and by the
deal, or that fixed by the court, shall be defined by the calendar date
or by the expiry of the period of time, counted in years, months, weeks,
days or hours.
The term may also be defined by the reference to the event, which
shall inevitably take place.
Article 191. The Start of the Term, Defined by a Period of Time
The proceeding of the term, defined by a period of time, shall start
on the next day after the calendar date or after the occurrence of the
event, by which its start has been defined.
Article 192. The End of the Term, Defined by a Period of Time
1. The term, counted in years, shall expire in the corresponding
month and on the corresponding day of the last year of the term.
Toward the term, defined as a half of the year, shall be applied the
rules for the terms, counted in months.
2. Toward the term, counted in the quarters of the year, shall be
applied the rules for the terms, counted by months. The quarter of the
year shall be equal to three months, and the quarters shall be counted
from the beginning of the year.
3. The term, counted in months, shall expire on the corresponding
day of the last month of the term.
The term, defined as a fortnight, shall be regarded as the term,
counted in days, and shall be equal to 15 days.
If the term, counted in months, expires in the month, which has no
corresponding date, it shall expire on the last day of this month.
4. The term, counted in weeks, shall expire on the corresponding day
of the last week of the term.
Article 193. Expiry of the Term on a Holiday
If the last day of the term falls on a holiday, the day of the
expiry of the term shall be the working day, following right after it.
Article 194. Procedure for Performing Actions on the Last Day of the
Term
1. If the term has been fixed for the performance of a certain
action, it may be performed before the expiry of 24 hours of the last day
of the term.
However, if this action has to be performed in an organization, the
term shall expire at the hour, when, in conformity with the established
rules, the performance of the corresponding actions in this organization
is terminated.
2. Written applications and notifications, handed in to a
communications agency before the expiry of 24 hours of the last day of
the term, shall be regarded as executed on time.
Chapter 12. The Limitation of Actions
Article 195. The Concept of the Limitation of Actions
The limitation of actions shall be recognized as the term, fixed for
the protection of the right by the claim of the person, whose right has
been violated.
Article 196. The General Term of the Limitation of Actions
The general term of the limitation of actions shall be laid down as
three years.
Article 197. Special Terms of the Limitation of Actions
1. For the individual kinds of claims, the law may establish special
terms of the limitation of actions, reduced or extended as compared to
the general term.
2. The rules of Articles 195 and 198-207 of the present Code shall
also be extended to the special terms of the limitation of actions,
unless otherwise established by the law.
Article 198. Invalidity of the Agreement on Changing the Terms of
the Limitation of Actions
The terms of the limitation of actions and the order of their
counting shall not be changed by an agreement between the parties.
The grounds for the suspension and the interruption of the
proceeding of the terms of the limitation of actions shall be laid down
by the present Code and by the other laws.
Article 199. Application of the Limitation of Actions
1. The claim for the protection of the violated right shall be
accepted by the court for consideration regardless of the expiry of the
term of the limitation of actions.
2. The limitation of actions shall be applied by the court only upon
the application of the party to the dispute, filed before the court has
passed the decision.
The expiry of the term of the limitation of actions, the application
of which has been pleaded by the party to the dispute, shall be the
ground for the court passing the decision on the rejection of the claim.
Article 200. The Start of the Proceeding of the Term of the
Limitation of Actions
1. The proceeding of the term of the limitation of actions shall
start from the day, when the person has learned, or should have learned,
about the violation of his right. Exceptions to this rule shall be
established by the present Code and by the other laws.
2. By the obligations with a fixed term of execution, the proceeding
of the term of the limitation of actions shall start after the expiry of
the term of execution.
By the obligations without a fixed term of execution, or by those,
whose term of execution has been defined as that on demand, the
proceeding of the term of the limitation of actions shall start from the
moment, when the creditor's right to present the claim for the execution
of the obligation arises, and if the debtor has been granted a privileged
term for the execution of such a claim, the term of the limitation of
actions shall be counted after the expiry of the said term.
3. By the regress obligations, the proceeding of the term of the
limitation of actions shall start from the moment of execution of the
basic obligation.
Article 201. The Term of the Limitation of Actions in the
Substitution of the Persons in the Obligation
The substitution of the persons in the obligation shall not entail a
change of the term of the limitation of actions or of the order of its
counting.
Article 202. Suspension of the Proceeding of the Term of the
Limitation of Actions
1. The proceeding of the term of the limitation of actions shall be
suspended:
1) if the filing of the claim has been obstructed by an
extraordinary and under the given conditions inexorable circumstance (a
force-majeure);
2) if the plaintiff or the defendant is in the Armed Forces, put
under the martial law;
3) by force of the postponement of the execution of the obligations
(a moratorium), decreed on the ground of the law by the Government of the
Russian Federation;
4) by force of the suspension of the operation of the law or of the
other legal act, regulating the corresponding relationship.
2. The proceeding of the term of the limitation of actions shall be
suspended under the condition that the circumstances, pointed out in the
present Article, have arisen or have been existing over the last six
months of the term of the limitation, and if this term is equal to six
months or is less than six months - over the period of the term of the
limitation of actions.
3. From the day of the termination of the circumstance, which has
served as the ground for the suspension of the limitation, the proceeding
of its term shall be resumed. The remaining part of the term shall be
extended to six months, and in case the term of the limitation of actions
is equal to six months or is less than six months - up to the term of the
limitation.
Article 203. Interruption of the Proceeding of the Term of
Limitation of Actions
The proceeding of the term of the limitation of actions shall be
interrupted by the filing of a claim in conformity with the established
order, and also by the obligator's performing the actions, which testify
to his admitting the debt.
After the interruption, the proceeding of the term of the limitation
shall start anew; the time that has expired before the interruption,
shall not be included into the new term.
Article 204. Proceeding of the Term of Limitation if the Claim Is
Dismissed
If the court dismisses the claim, the term of limitation, which has
started before the claim was filed, shall continue to proceed in the
general order.
If the court dismisses the claim, filed in a criminal case, the term
of limitation, which has started before the claim was filed, shall be
suspended until the sentence on dismissing the claim comes into legal
force; the time, over which the limitation has been suspended, shall not
be included into the term of limitation. In case the remaining part of
the term of the limitation of actions is less than six months, it shall
be extended to six months.
Article 205. Restoration of the Term of the Limitation of Actions
In exceptional cases, when the court recognizes the cause of missing
the term of limitation as valid on the ground of the circumstances (it
being related to the plaintiff's personal characteristics, such as a
grave illness, total disability, illiteracy, etc.), the citizen's
violated right shall be liable to protection. The reasons for his missing
the term of the limitation of actions may be recognized as valid, if they
have taken place within the last six months of the term of limitation,
and if this term is equal to six months or is less than six months - over
the term of limitation.
Article 206. Execution of the Duty After the Expiry of the Term of
the Limitation of Actions
The debtor or another obligator, who has executed the duty after the
expiry of the term of limitation, shall not have the right of regress,
even if at the moment of the execution the said person was not aware of
the expiry of the term of limitation.
Article 207. Application of the Limitation of Actions to
Supplementary Claims
With the expiry of the term of limitation by the basic claim, that
by the supplementary claims (the forfeit, pledge, surety, etc.) shall
also expire.
Article 208. The Claims to Which the Limitation of Actions Shall
Not Be Apply
The limitation of actions shall not be apply to:
- the claims for the protection of personal non-property rights and
the other non-material values, with the exception of the cases,
stipulated by the law;
- the claims of the depositors to the bank on the issue of deposits;
- the claims on recompensing the damage, inflicted on the life or
the health of the citizen. However, the claims, made after the expiry of
three years from the moment, when the right to the compensation of such
damage has arisen, shall be satisfied for the past time for no more than
three years, preceding the filing of the claim;
- the claims of the owner or another possessor for the elimination
of all violations of his right, even though these violations have not
been involved in the deprivation of the possession (Article 304);
- the other claims in the cases, established by the law.
Section II. The Right of Ownership and the Other Rights of Estate
Chapter 13. The General Provisions
Article 209. The Content of the Right of Ownership
1. The owner shall be entitled to the rights of the possession, the
use and the disposal of his property.
2. The owner shall have the right at his own discretion to perform
with respect to the property in his ownership any actions, not
contradicting the law and the other legal acts, and not violating the
rights and the law-protected interests of the other persons, including
the alienation of his property into the ownership of the other persons,
the transfer to them, while himself remaining the owner of the property,
of the rights of its possession, use and disposal, the putting of his
property in pledge and its burdening in other ways, as well as the
disposal thereof in a different manner.
3. The possession, the use and the disposal of the land and of the
other natural resources so far as their circulation is admitted by the
law (Article 129), shall be freely effected by their owner, unless this
inflicts damage to the natural environment or violates the rights and the
legal interests of the other persons.
4. The owner may pass his property over into the confidential
management, or into the trusteeship (to a confidential manager, or to the
trustee). The transfer of the property into the confidential management
shall not entail the transfer of the rights of ownership to the
confidential manager, who shall be obliged to perform the management of
the property in the interest of the owner or of the third person the
owner has named.
Article 210. The Burden of Maintaining the Property
The owner shall bear the burden of maintaining the property in his
ownership, unless otherwise stipulated by the law or by the contract.
Article 211. The Risk of an Accidental Destruction of the Property
The risk of an accidental destruction of the property or of an
accidental damage inflicted on it shall be borne by its owner, unless
otherwise stipulated by the law or by the contract.
Article 212. The Subjects of the Right of Ownership
1. In the Russian Federation shall be recognized the private, the
state, the municipal and the other forms of ownership.
2. The property may be in the ownership of the citizens and of the
legal entities, and also of the Russian Federation, of the subjects of
the Russian Federation and of the municipal entities.
3. The specifics of the acquisition and of the cessation of the
right of ownership to the property, of the possession, the use and the
disposal thereof may be established only by the law, depending on whether
the given property is in the ownership of the citizen or of the legal
entity, in the ownership of the Russian Federation, of the subject of the
Russian Federation or of the municipal entity.
The law shall stipulate the kinds of the property, which may be only
in the state or in the municipal ownership.
4. The rights of all the owners shall be equally protected.
Article 213. The Right of Ownership of the Citizens and of the Legal
Entities
1. In the ownership of the citizens and of the legal entities may be
any property, with the exception of the individual kinds of the property,
which, in conformity with the law, may not be owned by the citizens or by
the legal entities.
2. The amount and the cost of the property in the ownership of the
citizens and of the legal entities shall not be limited, with the
exception of the cases, when such limitations have been established by
the law for the purposes, stipulated by Item 2, Article 1 of the present
Code.
3. The commercial and the non-profit organizations, with the
exception of the state and of the municipal enterprises, and also of the
institutions, financed by the owner, shall be the owners of the property,
transferred to them by way of the investments (the contributions), made
by their founders (participants, members), and also of the property,
acquired by these legal entities on the other grounds.
4. The public and the religious organizations (the associations),
the charity and the other kind of funds shall be the owners of the
property they have acquired and shall have the right to use it only for
achieving the goals, stipulated in their constituent documents. The
founders (the participants, the members) of these organizations shall
lose the right to the property, which they have transferred into the
ownership of the corresponding organization. In case of the liquidation
of such an organization, its property, left after the creditors' claims
have been satisfied, shall be used for the purposes, pointed out in its
constituent documents.
Article 214. The Right of the State Ownership
1. The state property in the Russian Federation shall be the
property, owned by the right of ownership by the Russian Federation (the
federal, or the federally owned property), and also the property, owned
by the right of ownership by the subjects of the Russian Federation - by
the Republics, the territories, the regions, the cities of federal
importance, by the autonomous region and by the autonomous areas (the
property of the subject of the Russian Federation).
2. The land and the other natural resources, which are not in the
ownership of the citizens, the legal entities or the municipal entities,
shall be the state property.
3. On behalf of the Russian Federation and of the subjects of the
Russian Federation, the rights of the owner shall be exercised by the
bodies and by the persons, indicated in Article 125 of the present Code.
4. The property, which is in the state ownership, shall be assigned
to the state-run enterprises and institutions into the possession, the
use and the disposal in conformity with the present Code (Articles 294
and 296).
The means of the corresponding budget and the other state property,
not assigned to the state enterprises and institutions, shall comprise
the state treasury of the Russian Federation, the treasury of the
Republic within the Russian Federation, of the territory, the region, the
city of federal importance, of the autonomous region and of the
autonomous area.
5. Referring the state property to the federal property and to the
property of the subjects of the Russian Federation shall be effected in
conformity with the procedure, laid down by the law.
Article 215. The Right of the Municipal Ownership
1. The property, belonging by the right of ownership to the urban
and to the rural settlements, and to the other municipal entities, shall
be the municipal property.
2. On behalf of the municipal entity, the rights of the owner shall
be exercised by the local self-government bodies and by the persons,
indicated in Article 125 of the present Code.
3. The property in the municipal ownership shall be assigned to the
municipal enterprises and to the institutions into the possession, the
use and the disposal in conformity with the present Code (Articles 294
and 296).
The means of the local budget and the other municipal property, not
assigned to the municipal enterprises and to the institutions, shall
comprise the municipal treasury of the corresponding urban or rural
settlement or of the other municipal entity.
Article 216. The Rights of Estate of the Persons, Who Are Not the
Owners
1. The rights of estate shall be, alongside the right of ownership:
- the right of the inherited life possession of the land plot
(Article 265);
- the right of the permanent (perpetual) use of the land plot
(Article 268);
- the servitudes (Articles 274 and 277);
- the right of the economic management of the property (Article 294)
and the right of the operation management of the property (Article 296).
2. The rights of estate to the property may be possessed by the
persons, who are not the owners of this property.
3. The transfer of the right of the ownership to the property to the
other person shall not be a ground for the cessation of the other rights
of estate to this property.
4. The rights of estate of the person, who is not the owner of the
property, shall be protected from their violation by any person in the
order, stipulated by Article 305 of the present Code.
Article 217. Privatization of the State and of the Municipal
Property
The property in the state or in the municipal ownership may be
transferred by its owner into the ownership of the citizens and of the
legal entities in the order, stipulated by the laws on the privatization
of the state and of the municipal property.
In the course of the privatization of the state and of the municipal
property, the provisions, stipulated by the present Code, which regulate
the order of the acquisition and of the cessation of the right of
ownership, shall be applied, unless otherwise stipulated by the laws on
the privatization.
Chapter 14. The Acquisition of the Right of Ownership
Article 218. The Grounds for the Acquisition of the Right of
Ownership
1. The right of ownership to a new thing, manufactured or created by
the person for himself, while abiding by the law and by the other legal
acts, shall be acquired by this person.
The right of ownership to the fruits, the products and the incomes,
derived through the use of the property, shall be acquired on the
grounds, stipulated by Article 136 of the present Code.
2. The right of ownership to the property, which has its owner, may
be acquired by the other person on the grounds of the contract of the
purchase and sale, of the exchange and of making a gift, or on the ground
of another kind of the deal on the alienation of this property.
In the case of the citizen's death, the right of ownership to the
property he has owned shall pass by the right of succession to the other
persons in conformity with the will or with the law.
In the case of the reorganization of the legal entity, the right of
ownership to the property it has owned shall pass to the legal entities,
which are the legal successors of the reorganized legal entity.
3. In the cases and in the order, stipulated by the present Code,
the person may acquire the right of ownership to the ownerless property,
to the property, whose owner is unknown, and to the property, which the
owner has renounced or to which he has lost the right of ownership on the
other law-stipulated grounds.
4. The member of the housing, housing-construction, country cottage,
garage or another kind of the consumer cooperative, and also the other
persons, enjoying the right to make share accumulations, who have paid up
in full their share contribution for the flat, the country cottage, the
garage or the other quarters, given to these persons by the cooperative,
shall acquire the right of ownership to the said property.
Article 219. Arising of the Right of Ownership to the Newly Created
Realty
The right of ownership to the buildings, the structures and the
other newly created realty, subject to the state registration, shall
arise from the moment of such registration.
Article 220. The Processing
1. Unless otherwise stipulated by the contract, the right of
ownership to a new movable thing, which the person has manufactured by
processing the materials he does not own, shall be acquired by the owner
of the materials.
However, if the cost of the processing essentially exceeds the cost
of the materials, the right of ownership to the new thing shall be
acquired by the person who, while acting in good faith, has effected the
processing for himself.
2. Unless otherwise stipulated by the contract, the owner of the
materials, who has acquired the right of ownership to the thing,
manufactured from them, shall be obliged to recompense the cost of the
processing to the person, who has performed it, and in the case of the
right of ownership to the new thing being acquired by the latter, this
person shall be obliged to recompense the cost of the materials to their
owner.
3. The owner of the materials, who has been deprived of them as a
result of the actions in bad faith of the person, who has executed the
processing, shall have the right to claim that the new thing be
transferred into his ownership and that the losses, inflicted upon him,
be compensated.
Article 221. Turning into the Ownership of the Objects, Generally
Available for Collection
In the cases, when in conformity with the law or with the general
permission of the owner, or in conformity with the local custom, in the
woods, in the water bodies or on the other territory, the berry-picking,
fishing, gathering, extraction, hunting and trapping of the generally
available objects and animals is admitted, the right of ownership to the
corresponding objects shall belong to the person, who has performed these
actions.
Article 222. The Unauthorized Structure
1. The unauthorized structure shall be a living house and any other
building or structure, erected on the land plot, which has not been
allotted for this purpose in conformity with the order, established by
the law or by the other legal acts, or that erected without having
obtained the necessary permit to this effect, or that built with the
substantial violation of the norms and rules, laid down for the
town-development and construction.
2. The person, who has built an unauthorized structure, shall not
acquire the right of ownership to it. He shall have no right to dispose
of the said structure, i.e., to sell it, to make a gift of it, to give it
in rent and to perform the other deals with it.
The unauthorized structure shall be subject to demolition by the
person, who has erected it, or at his expense, with the exception of the
cases, stipulated by Item 3 of the present Article.
3. The right of ownership to the unauthorized structure may be
recognized by the court in the person, who has erected it on the land
plot he does not own, on the condition that the given land plot shall be
allotted to this person in conformity with the established order for the
structure built on it.
The right of ownership to an unauthorized structure may be
recognized by the court in the person, in whose ownership, inherited life
possession or permanent (perpetual) use the land plot, on which the said
structure has been built, is situated. In this case, the person, whose
right of ownership to the structure has been recognized, shall recompense
the expenses, involved in its erection, to the person, who has built it,
in the amount, defined by the court.
The right of ownership to the unauthorized structure shall not be
adjudged to the said persons, if the maintenance of the structure
infringes upon the rights and the law-stipulated interests of the other
persons or if it jeopardizes the citizens' life and health.
Article 223. The Moment of the Right of Ownership Arising in the
Acquirer by the Contract
1. The right of ownership shall arise in the acquirer of the thing
from the moment of its transfer, unless otherwise stipulated by the law
or by the contract.
2. In the cases, when the alienation of the property is subject to
the state registration, the right of ownership shall arise with the buyer
from the moment of such registration, unless otherwise established by the
law.
Article 224. The Transfer of the Thing
1. The transfer shall be recognized as the handing in of the thing
to the acquirer, and also as the handing in to a transporter for the
delivery to the acquirer or the passing to a communications agency for
forwarding to the acquirer of the things, alienated without an obligation
of delivery.
The thing shall be regarded as handed in to the acquirer from the
moment of its actually being placed into the possession of the acquirer
or of the person, whom he has named.
2. If by the moment of concluding the contract on the alienation of
the thing it has already been placed into the acquirer's possession, it
shall be regarded as transferred to him from this moment.
3. The transfer of the thing shall be equalized to the transfer of
the bill of lading or of another document of title to the thing.
Article 225. Ownerless Things
1. The thing shall be recognized as ownerless, if it has no owner,
or if its owner is unknown, of if he has renounced his right of ownership
to the said thing.
2. Unless this is excluded by the rules of the present Code on the
acquisition of the right of ownership to the things, which have been
renounced by the owner (Article 226), on the find (Articles 227 and 228),
on the neglected animals (Articles 230 and 231) and on the treasure
(Article 233), the right of ownership to the ownerless movables may be
acquired by force of the acquisitive prescription.
3. The ownerless immovable things shall be registered by the body,
engaged in the state registration of the right to the realty, upon the
application of the local self-government body, on whose territory they
are situated.
After the expiry of one year from the day of registration of the
ownerless immovable thing, the body, authorized to manage the municipal
property, may file a claim with the court for recognizing the municipal
ownership to the given thing.
The ownerless immovable thing, which has not been recognized by the
court ruling as given into the municipal ownership, may once again be
accepted into the possession, the use and the disposal by its owner, who
has formerly left it, or it may be acquired into ownership by force of
the acquisitive prescription.
Article 226. The Movables, Renounced by the Owner
1. The movable things, abandoned by their owner, or left by him in
another way with the purpose of renouncing his right of their ownership
(the abandoned things), may be turned by the other persons into their
ownership in conformity with the order, stipulated by Item 2 of the
present Article.
2. The person, in whose ownership, possession or use is the land
plot, water body or another object, where the abandoned thing, which
costs obviously less than the sum, corresponding to the five-fold minimum
amount of the remuneration of labour, and also the abandoned metal scrap,
the rejected products, the sinken logs in the floating, the dumps and the
drains formed in the extraction of minerals, the production and the other
kind of wastes are located, shall have the right to turn these things
into his ownership by starting to use them, or by performing the other
actions, testifying to the thing being turned into ownership.
The other abandoned things shall go into the ownership of the
person, who has entered into their possession, if, upon the application
of this person, the court has recognized them as ownerless.
Article 227. The Find
1. The person, who has found a lost thing, shall be obliged to
immediately notify about this the person, who has lost it, or the person,
who is its owner, or somebody else from among the persons he knows, who
have the right to obtain it, and to return the thing he has found to this
person.
If the thing has been found indoors or in a transport vehicle, it
shall be subject to being handed over to the person, representing the
owner of the quarters or of the transport vehicle in question. In this
case, the person, to whom the find has been handed over, shall acquire
the rights and shall discharge the obligations of the person, who has
found the thing.
2. If the person, who has the right to claim that the found thing be
returned to him, or the place of his stay is not known, the person, who
has found the thing, shall be obliged to declare the find to the militia
or to the local self-government body.
3. The person, who has found the thing, shall have the right to keep
it or to give it for keeping to the militia, to the local self-government
body, or to the person these have pointed out.
The perishable thing or the thing, the cost of whose storage is
inordinately great compared with its cost, may be realized by the person,
who has found it; the latter shall obtain a written proof of the earnings
he has derived. The money, received from the sale of the find, shall be
subject to the return to the person, legally entitled to obtain it.
4. The person, who has found the thing, shall be answerable for the
said thing's loss or damage only in the case of an evil intent or of a
flagrant carelessness on his part, and then only within the limits of its
cost.
Article 228. Acquisition of the Right of Ownership to the Find
1. If in the course of six months from the moment of the declaration
of the find to the militia or to the local self-government body (Item 2
of Article 227), the person, legally entitled to obtain the found thing,
is not identified, or does not himself declare his right to the thing to
the person, who has found it, to the militia or to the self-government
body, the person, who has found it, shall acquire the right of ownership
to the given thing.
2. In case the person, who has found the thing, refuses to acquire
the found thing into his ownership, it shall be turned into the municipal
ownership.
Article 229. Compensation of the Expenses, Involved in the Find, and
the Reward to the Person, Who Has Found It
1. The person, who has found and returned the thing to the person,
legally entitled to obtain it, shall have the right to receive from this
person, and in case the thing is turned into the municipal ownership -
from the corresponding local self-government body, the compensation of
the necessary expenses, involved in the keeping, handing in or
realization of the thing, as well as the outlays he has made in his
efforts to discover the person, who has the right to obtain the thing.
2. The person, who has found the thing, shall have the right to
claim from the person, legally entitled to obtain it, the reward for the
find, amounting to up to 20 per cent of its cost. If the found thing
presents a value only to the person, legally entitled to obtain it, the
amount of the reward shall be defined by an agreement with this person.
The right to the reward shall not arise, if the person, who has
found the thing, has not declared the find or has tried to conceal it.
Article 230. The Neglected Animals
1. The person, who has detained the neglected or stray cattle or the
other neglected domestic animals, shall be obliged to return them to the
owner, and if the owner of the animals or the place of his stay is not
known, shall declare, within three days from the moment of their
detention, about his finding the said animals to the militia or to the
local self-government body, which shall take measures to find their
owner.
2. The person, who has detained the animals, may maintain and use
them during the time, required to find their owner, or turn them over for
the maintenance and use to another person, disposing of the necessary
facilities. By the request of the person, who has detained the neglected
animals, the search for a person, who disposes of the necessary
facilities for their maintenance, and the transfer of the said animals to
this person shall be effected by the militia or by the local
self-government body.
3. The person, who has detained the neglected animals, and also that
person, to whom they have been turned over for the maintenance and for
the use, shall be obliged to keep them properly and shall be answerable
for their perish and for the harm done to the animals through their fault
within the limits of the animals' cost.
Article 231. Acquisition of the Right of Ownership to the Neglected
Animals
1. If, in the course of six months from the moment, when the
declaration about the detention of the neglected animals was made, their
owner has not been found or has not himself claimed his right to them,
the person, in whose maintenance and use the animals have been, shall
acquire the right of ownership to them.
In case this person has refused to acquire the right of ownership to
the animals in his maintenance, they shall be turned into the municipal
ownership and shall be used in conformity with the procedure, laid down
by the local self-government body.
2. If the former owner of the animals turns up after their being
passed over into the ownership of another person, the former owner shall
have the right, in case the said animals are showing the signs of
affection for him, or in case the new owner treats them cruelly or
improperly, to claim that they be returned to him on the terms, defined
by an agreement with the new owner, and if it is impossible to reach such
an agreement - on the terms, ruled by the court.
Article 232. Compensation of the Expenses Involved in Keeping
Neglected Animals and the Reward for Them
In case the neglected domestic animals are returned to the owner,
the person, who has detained the animals, and also the person, in whose
maintenance and use they have been, shall be entitled to the compensation
by the owner of their outlays on the maintenance of the animals, with
offsetting the profits, derived from their use.
The person, who has detained the neglected domestic animals, shall
have the right to the reward in conformity with Item 2 of Article 229 of
the present Code.
Article 233. The Treasure
1. The treasure, i.e., the money or the other valuable things,
buried underground or hidden away in any other manner, whose owner cannot
be identified or, by force of the law, has lost the right to them, shall
be turned into the ownership of the person, who is the owner of the
property (the land plot, the building, etc.), where the treasure was
hidden, and of the person, who has discovered the treasure, in equal
shares, unless another kind of agreement has been reached between them.
In case the treasure is discovered by the person, who has been
performing excavation work or the search for valuables without obtaining
a permission to this effect from the owner of the land plot or of the
other property, where it was hidden, the treasure shall be subject to the
transfer to the owner of the land plot or of the other property, where
the treasure was discovered.
2. In case of discovering a treasure, containing things, which have
a bearing to the monuments of culture or history, they shall be handed
over into the state ownership. The owner of the land plot or of the other
kind of property, where the treasure was hidden, and the person, who has
discovered the treasure, shall be together entitled to a reward,
amounting to 50 per cent of the cost of the treasure. The reward shall be
divided between these persons in equal shares, unless another kind of
agreement has been reached between them.
In case the treasure has been discovered by the person, who has
performed excavation work or the search for valuables without the consent
of the owner of the property, where the treasure was hidden, the reward
shall not be paid to this person and shall be paid in full to the
property owner.
3. The rules of the present Article shall not be applied to the
persons, who have been engaged in the excavation work and in the search,
aimed at the discovery of the treasure, by force of such duties being
included within the range of their labour or official duties.
Article 234. Acquisitive Prescription
1. The person - the citizen or the legal entity - who is not the
owner of the property, but who has, in good faith, openly and
uninterruptedly, possessed the realty as his own immovable property in
the course of fifteen years, or any other property in the course of five
years, shall acquire the right of ownership to this property (the
acquisitive prescription).
The right of ownership to the realty and to the other property,
subject to the state registration, shall arise in the person, who has
acquired this property by force of the acquisitive prescription, from the
moment of such registration.
2. Before the acquisition of the right of ownership to the property
by force of the acquisitive prescription, the person, possessing the
given property as his own, shall have the right to protect his possession
against the third persons, who are not the owners of the said property,
and also against those, who have no rights to its possession on the other
grounds, stipulated by the law or by the agreement.
3. The person, referring to the long term of possession, may add to
the period of his possession the entire period of time, in the course of
which the property has been possessed by the person, whose legal
successor the given person is.
4. The proceeding of the term of the acquisitive prescription with
respect to the things, which are in the custody of the person, from whose
possession they could be claimed in conformity with Articles 301 and 305
of the present Code, shall start not earlier than after the expiry of the
term of the limitation of actions by the corresponding claims.
Chapter 15. The Cessation of the Right of Ownership
Article 235. The Grounds for the Cessation of the Right of Ownership
1. The right of ownership shall cease with the alienation by the
owner of his property in favour of the other persons, with the owner's
renouncement of his right of ownership, with the perish or the
destruction of the property and with the loss of the right of ownership
in the other law-stipulated cases.
2. The forcible withdrawal of the property from the owner shall not
be admitted, with the exception of the cases, when, on the law-stipulated
grounds, shall be effected:
1) the turning of the penalty onto the property by the obligations
(Article 237);
2) the alienation of the property, which by force of the law may not
be owned by the given person (Article 238);
3) the alienation of the realty in connection with the withdrawal of
the land plot (Article 239);
4) the redemption of the mismanaged cultural values and of domestic
animals (Articles 240 and 241);
5) the requisition (Article 242);
6) the confiscation (Article 243);
7) the alienation of the property in the cases, stipulated by Item
4, Article 252, by Item 2, Article 272, and by Articles 282, 285 and 293
of the present Code.
By the owner's decision and in conformity with the procedure,
stipulated by the laws on the privatization, the property, which is in
the state or in the municipal ownership, shall be alienated into the
ownership of the citizens and of the legal entities.
The turning into the state ownership of the property, which is in
the ownership of the citizens and of the legal entities (the
nationalization), shall be effected on the ground of the law with the
recompensing of the cost of this property and of the other losses in
conformity with the procedure, laid down by Article 306 of the present
Code.
Article 236. Renouncement of the Right of Ownership
The citizen or the legal entity may renounce the right of ownership
to the property in his (its) ownership by announcing this or by
performing the other actions, definitely testifying to his abstaining
from the possession, the use and the disposal of the property without an
intention to preserve any rights to this property.
The renouncement of the right of ownership shall not entail the
cessation of the rights and duties of the owner with respect to the
corresponding property until the right of ownership to it is acquired by
the other person.
Article 237. Turning of the Penalty onto the Property by the Owner's
Obligations
1. The withdrawal of the property by way of turning onto it the
penalty by the owner's obligations shall be effected on the grounds of
the court decision, unless the other order of turning the penalty is
stipulated by the law or by the agreement.
2. The right of ownership to the property, onto which the penalty
has been turned, shall cease in its owner from the moment, when the right
of ownership to the withdrawn property arises in the person, to whom this
property is transferred.
Article 238. Cessation of the Right of Ownership to the Property in
the Person, Who May Not Own It
1. If on the grounds, admitted by the law, in the ownership of the
person has been found the property, which he may not own by force of the
law, this property shall be alienated by the owner in the course of one
year from the moment of the arising of the right of ownership to the
property, unless the law has established another term.
2. In the cases, when the property has not been alienated by the
owner within the term, established by Item 1 of the present Article, such
property, with account for its nature and purpose, shall be subject, in
accordance with the court decision, passed upon the application of the
state body or of the local self-government body, to the forcible sale
with the transfer to the former owner of the money, derived from this
sale, or to the transfer into the state or into the municipal ownership,
with the compensation to the former owner of the cost of the property,
defined by the court. The outlays, involved in the alienation of the
property, shall be detracted.
3. If, on the grounds, admitted by the law, in the ownership of the
person or of the legal entity has been found the thing, for the
acquisition of which a special permit is required, while its issue has
been refused to the owner, this thing shall be subject to alienation in
the order, established for the property, which may not be owned by the
given owner.
Article 239. Alienation of the Realty in Connection with the
Withdrawal of the Land Plot, on Which It Is Situated
1. In the cases, when the withdrawal of the land plot for the state
or for the municipal needs, or because of the improper use of land, is
impossible without the cessation of the right of ownership to the
buildings, the structures or the other immovable property, situated on
the given land plot, this property may be withdrawn from the owner by way
of its redemption by the state or by way of its sale at a public auction
in conformity with the procedure, stipulated, correspondingly, by
Articles 279-282 and 284-286 of the present Code.
The claim for the withdrawal of the immovable property shall not be
liable to satisfaction, if the state body or the local self-government
body, which has filed this claim with the court, does not prove that the
use of the land plot for the purposes, for which it is being withdrawn,
would be impossible, unless the right of ownership to the given immovable
property is terminated.
2. The rules of the present Article shall correspondingly be
applied, when the rights of ownership to the immovable property are
terminated in connection with the withdrawal of the allotted mountain
land plots, aquatorium sections and the other land plots, on which the
given property is situated.
Article 240. Redemption of the Mismanaged Cultural Values
In the cases, when the owner of the cultural values, referred in
conformity with the law to those particularly valuable and protected by
the law, carelessly maintains these values, as a result of which they may
lose their importance, such values may be withdrawn from the owner in
accordance with the court decision, by way of their redemption by the
state or by their sale at an open auction.
In case of the redemption of the cultural values, the owner shall be
recompensed their cost in the amount, fixed by the agreement between the
parties, and in the case of a dispute arising between them - by the
court. If the values are sold at an open auction, the owner shall receive
the earnings from the sale, less the outlays for holding the auction.
Article 241. Redemption of the Domestic Animals in Case of Their
Improper Treatment
In the cases, when the owner's treatment of the domestic animals is
in glaring contradiction with the rules of the humane attitude toward the
animals, established on the ground of the rules and norms, accepted in
society, these animals may be withdrawn from the owner by way of their
redemption by the person, who has filed the corresponding claim with the
court. The redemption price shall be defined by the agreement between the
parties, and in case of a dispute arising between them - by the court.
Article 242. Requisition
1. In case of the natural calamities, the accidents, the epidemics
or the epizootics, and under the other circumstances of an extraordinary
nature, the property may be, in the interest of society and by the
decision of the state bodies, withdrawn from the owner in accordance with
the procedure and on the terms, laid down by the law, with the cost of
the requisitioned property paid out to him (the requisition).
2. The estimate, according to which the owner shall be paid the cost
of the requisitioned property, may be disputed by him in the court.
3. The person, whose property has been requisitioned, shall have the
right to claim through the court the return to him of the preserved
property, if the circumstances, in connection with which the requisition
was performed, have ceased to operate.
Article 243. Confiscation
1. In the law-stipulated cases, the property may be withdrawn from
the owner without any compensation in accordance with the court decision
as a sanction, inflicted for his committing a crime or another violation
of the law (the confiscation).
2. In the law-stipulated cases, the confiscation may be carried out
in the administrative order. The decision on the confiscation, adopted in
the administrative order, may be appealed against in the court.
Chapter 16. The Common Property
Article 244. The Concept and the Grounds for the Common Property to
Arise
1. The property, which is in the ownership of two or of several
persons, shall belong to them by the right of common ownership.
2. The property may be in the common ownership, with the share of
each of the owners in the right of ownership defined (the share
ownership), or not defined (the joint ownership).
3. The common ownership of the property shall be the share
ownership, with the exception of the cases, when the law stipulates the
formation of the joint ownership to this property.
4. The common ownership shall arise when into the ownership of two
or of several persons falls the property, which cannot be divided without
changing its intended purpose (the indivisible things) or which shall not
be subject to division by force of the law.
The common ownership of the divisible property shall arise in the
cases, stipulated by the law or by an agreement.
5. By an agreement between the participants in the joint ownership,
and if no agreement can be reached - by the court decision, the share
ownership to the common property may be established.
Article 245. Definition of the Shares in the Right of the Share
Ownership
1. If the shares of the participants in the share ownership cannot
be defined on the ground of the law and have not been established by an
agreement between all its participants, the shares shall be regarded as
equal.
2. By an agreement between all the participants in the share
ownership, the order of defining and amending their shares, which would
depend on the contribution of each of them into the formation and the
increment of the common property, may be established.
3. The participant in the share ownership, who has effected at his
own expense and with the observation of the order, established for the
use of the common property, the inseparable improvements in this
property, shall be entitled to the corresponding increase of his share in
the right of ownership to the common property.
The separable improvements, made in the common property, unless
otherwise stipulated by the agreement between the participants in the
common property, shall be the property of that of the participants, who
has effected them.
Article 246. Disposal of the Property in the Share Ownership
1. The disposal of the property, which is in the share ownership,
shall be effected in accordance with the agreement between all its
participants.
2. The participant in the share ownership shall have the right at
his own discretion to sell, to make a gift of, to leave by will, or to
pledge his share, or to dispose of it in any other way, with the
observation in its gratuitous alienation of the rules, stipulated by
Article 250 of the present Code.
Article 247. Possession and Use of the Property in the Share
Ownership
1. The possession and the use of the property, which is in the share
ownership, shall be effected in accordance with an agreement between all
its participants, and in case such an agreement cannot be reached - in
accordance with the order, ruled by the court.
2. The participant in the share ownership shall have the right to
put into his possession and use the part of the common property,
proportionate to his share, and in case of this being impossible, he
shall have the right to claim the corresponding compensation from the
other participants, who possess and use the property, comprising his
share.
Article 248. The Fruits, Products and Incomes from the Use of the
Property in the Share Ownership
The fruits, products and incomes, derived from the use of the
property, which is in the share ownership, shall comprise the common
property and shall be distributed between the participants in the share
ownership proportionately to their shares, unless otherwise stipulated by
an agreement between them.
Article 249. Expenses Involved in the Maintenance of the Property in
the Share Ownership
Every participant in the share ownership shall be obliged to take
part, proportionately to his share, in the payment of the taxes,
collections and other dues by the common property, as well as in the
expenses, involved in its maintenance and storage.
Article 250. Preferential Right of the Purchase
1. In case a share in the right of the common ownership is sold to
an outsider, the rest of the participants in the share ownership shall
have the right of priority in the purchase of the share on sale for the
price, for which it is being sold, and on the other equal terms, with the
exception of the case, when it is being sold at an open auction.
An open auction for the sale of the share in the right of the common
ownership in the absence of the consent to it of all the participants in
the share ownership, may be held in the cases, stipulated by the second
part of Article 255 of the present Code, and also in the other
law-stipulated cases.
2. The seller of the share shall be obliged to notify in written
form the rest of the participants in the share ownership about his
intention to sell his share to an outsider, with an indication of the
price and of the other terms, on which he is selling his share. If the
rest of the participants in the share ownership refuse to buy it or do
not acquire the share in the right of the ownership to the immovable
property, offered for sale, in the course of one month, and in the right
of the ownership to the movable property - within ten days from the date
of notification, the seller shall have the right to sell his share to any
person.
3. If the share is sold with a violation of the right of priority to
the purchase, any other participant in the share ownership shall have the
right to claim through the court, in the course of three months, that the
buyer's rights and duties be transferred to him.
4. The cession of the right of priority to the purchase of the share
shall not be admitted.
5. The rules of the present Article shall also be applied in case of
the alienation of the share by a barter agreement.
Article 251. The Moment of the Transfer of the Share in the Right of
the Common Ownership to the Acquirer by the Contract
The share in the right of the common ownership shall be transferred
to the acquirer by the contract from the moment of its conclusion, unless
otherwise stipulated by the agreement between the parties.
The moment of the share in the right of the common ownership being
transferred by the contract, which is subject to the state registration,
shall be defined in conformity with Item 2 of Article 223 of the present
Code.
Article 252. Division of the Property in the Share Ownership and the
Setting Apart of a Share from It
1. The property, which is in the share ownership, may be divided
between its participants by an agreement between them.
2. The participant in the share ownership shall have the right to
claim that his share be set apart from the common property.
3. If the participants in the share ownership have failed to come to
an agreement on the way and the terms for the division of the common
property or for the setting apart of the share of one of the
participants, the participant in the share ownership shall have the right
to claim through the court that his share be set apart from the common
property in kind.
If the setting apart of the share in kind is not admitted by the law
or is impossible without causing an inordinate harm to the property in
the common ownership, the withdrawing owner shall have the right to the
payment out to him of the cost of his share by the other participants in
the share ownership.
4. The rift between the property, set apart in kind to the
participant in the share ownership on the ground of the present Article,
and his share in the right of ownership shall be eliminated by paying out
to him of the corresponding sum of money or by the other kind of
compensation.
The payment out to the participant in the share ownership by the
rest of the participants of a compensation instead of the setting apart
of his share in kind, shall be admitted only with his consent. In case
the owner's share is insignificant, cannot be realistically set apart and
he doesn't display a serious interest in the use of the common property,
the court may obligate the rest of the participants in the share
ownership to pay him out the compensation even in the absence of his
consent.
5. Upon the receipt of the compensation in conformity with the
present Article, the owner shall lose the right to a share in the common
property.
Article 253. Possession, Use and Disposal of the Property in the
Joint Ownership
1. The participants in the joint ownership, unless otherwise
stipulated by the agreement between them, shall possess and use the
common property jointly.
2. The property in the joint ownership shall be disposed of by the
consent of all the participants, which shall be presumed regardless of
which particular participant performs the deal, involved in the disposal
of the property.
3. Each of the participants in the joint ownership shall have the
right to perform the deals, involved in the disposal of the common
property, unless otherwise following from the agreement between all the
participants. The deal, effected by one of the participants in the joint
ownership, involved in the disposal of the common property, may be
recognized as invalid upon the demand of the rest of the participants for
the reason of the participant, who has made the deal, not having the
necessary powers, only if it has been proved that the other party to the
deal has known, or should have known, about it.
4. The rules of the present Article shall be applied so far as no
other rules have been laid down for the individual kinds of the joint
ownership by the present Code or by the other laws.
Article 254. Division of the Property in the Joint Ownership and the
Setting Apart of a Share from It
1. The division of the common property between the participants in
the joint ownership, as well as the setting apart of the share of one of
them may be effected after making a preliminary estimate of the share of
each of the participants in the right to the common property.
2. Unless otherwise stipulated by the law or by the agreement
between the participants, when dividing the common property and setting
apart a share from it, their shares shall be recognized as equal.
3. The grounds and the order for the division of the common property
and for the setting apart of a share from it shall be defined according
to the rules of Article 252 of the present Code, so far as no other rules
have been laid down for the individual kinds of the joint ownership by
the present Code and by the other laws or follow from the substance of
the relationships between the participants in the joint ownership.
Article 255. Turning of the Penalty onto the Share in the Common
Property
The creditor of the participant in the share or in the joint
ownership shall have the right, in case the given owner's other property
proves to be insufficient, to claim the setting apart of the debtor's
share in the common property for turning the penalty onto it.
If in such cases the setting apart of the share in kind is
impossible or if the rest of the participants in the share or in the
joint ownership object to it, the creditor shall have the right to claim
the sale by the debtor of this share to the rest of the participants of
the common property for the price, proportionate to the market cost of
this share, with the means, derived from the sale, going to service the
debt.
In case of the refusal of the rest of the participants in the common
ownership to acquire the debtor's share, the creditor shall have the
right to claim through the court that the penalty be turned onto the
debtor's share in the right of the common ownership by way of selling
this share at an open auction.
Article 256. The Community Property
1. The property, accumulated by the spouses during their married
life, shall be their joint, or community property, unless another regime
has been established for this property by an agreement between them.
2. The property, which was owned by each of the spouses before they
entered into the marriage, or that received by one of the spouses during
their married life as a gift or by inheritance, shall be the property of
this particular spouse.
The things of personal use (such as the clothes, the footwear,
etc.), with the exception of the jewels and the other luxury goods, even
though acquired during the married life at the expense of the spouses'
common means, shall be recognized as the property of that spouse, who has
used them.
The property of each of the spouses may be recognized as their joint
property, if it has been established that during their married life, at
the expense of the common property of the spouses or of the personal
property of the other spouse, have been made the contributions, which
have essentially increased the cost of that property (the overhaul, the
reconstruction, the re-equipment, etc.). The present rule shall not be
applied, if otherwise stipulated by an agreement between the spouses.
3. By the obligations of one of the spouses, the penalty may be
turned only onto the property in his ownership and onto his share in the
common property of the spouses, which should be due to him in case of the
division of this property.
4. The rules for defining the spouses' shares in the common property
during its division and the order of such a division, shall be laid down
by the legislation on the family and on marriage.
Article 257. The Ownership of the Peasant (Farmer's) Economy
1. The property of the peasant (the farmer's) economy shall belong
to its members by the right of joint ownership, unless otherwise
stipulated by the law or by an agreement between them.
2. In the joint ownership of the members of the peasant (the
farmer's) economy shall be the land plot, assigned into the ownership of
this economy or acquired, the plantations, the economic and the other
kind of buildings, the amelioration and the other kind of structures, the
productive and the draft animals, the poultry, the farm and the other
kind of machinery and equipment, the transportation vehicles, the
implements and the other kind of property, acquired for the economy at
the expense of the common means of its members.
3. The fruits, products and incomes, derived as a result of the
activity of the peasant (the farmer's) economy, shall be the common
property of the members of the peasant (the farmer's) economy and shall
be used by an agreement between them.
Article 258. Division of the Peasant (the Farmer's) Economy
1. Upon the termination of the peasant (the farmer's) economy in
connection with the retirement of all its members or on the other
grounds, the common property shall be subject to division in accordance
with the rules, stipulated by Articles 252 and 254 of the present Code.
The land plot in such cases shall be divided according to the rules,
established by the present Code and by the land legislation.
2. The land plot and the means of production, belonging to the
peasant (the farmer's) economy, shall not be subject to division in case
of the retirement of one of its members. The retired member shall have
the right to receive the money compensation, proportionate to his share
in the common ownership of this property.
3. In the cases, stipulated by the present Article, the shares of
the members of the peasant (the farmer's) economy in the right of the
joint ownership to the property of the economy shall be recognized as
equal, unless otherwise stipulated by an agreement between them.
Article 259. The Ownership of the Economic Partnership or of the
Cooperative, Based on the Property of the Peasant (the
Farmer's) Economy
1. The members of the peasant (the farmer's) economy may set up, on
the basis of the economy's property, an economic partnership or a
production cooperative. Such an economic partnership or a cooperative as
a legal entity shall possess the right of ownership to the property,
transferred to it in the form of investments and other contributions by
the members of the peasant (the farmer's) economy, and also to the
property, which has resulted from its activity or has been acquired on
the other grounds, admitted by the law.
2. The size of the contributions of the participants in the
partnership or of the members of the cooperative, set up on the basis of
the peasant (the farmer's) economy, shall be fixed, proceeding form their
shares in the right of the common ownership to the economy's property, to
be defined according to Item 3 of Article 258 of the present Code.
Chapter 17. Right of Ownership and Other Real Rights to Land
Article 260. The General Provisions on the Right of Ownership to the
Land
1. The persons, having in their ownership a land plot, shall have
the right to sell it, to make a gift of it, to pledge it or to give it in
rent, and to dispose of it in any other way (Article 209), so far as the
corresponding lands have not been withdrawn from, or restricted in the
circulation in conformity with the law.
2. On the ground of the law and of the law-established order, shall
be defined the lands, intended for agricultural and other purposes, whose
use for the different purposes is not admitted or is restricted. The land
plot, referred to this category of lands, may be used within the limits,
defined by its intended purpose.
Article 261. The Land Plot as an Object of the Right of Ownership
1. The territorial boundaries of the land plot shall be delineated
in conformity with the order, established by the land legislation, on the
grounds of the documents, issued to the owner by the state bodies,
responsible for the land resources and for the organization of the use of
land.
2. Unless otherwise decreed by the law, the right of ownership to
the land plot shall be spread to the surface (the soil) layer, the closed
water bodies, the forests and the other plants, situated within the
boundaries of this land plot.
3. The owner of the land plot shall have the right to use at his own
discretion everything, which is over and under the surface of this land
plot, unless otherwise stipulated by the laws on the mineral wealth and
on the use of the air space and by the other laws, and so far as it does
not violate the rights of the other persons.
Article 262. The Land Plots of the Common Use. Access to the Land
Plot
1. The citizens shall have the right to freely pass, without being
obliged to draw any permits, to the land plots, which have not been
closed for the common access, in the state or in the municipal ownership,
and to use the natural objects, located on these plots within the limits,
admitted by the law and by the other legal acts, as well as by the owner
of the corresponding land plot.
2. Unless the land plot has been fenced off or its owner has clearly
indicated that no trespassing is admitted without his permission, any
person shall have the right to walk across the land plot under the
condition that this does not inflict a loss or cause worry to the owner.
Article 263. Construction on the Land Plot
1. The owner of the land plot shall have the right to erect on it
buildings and structures, to rebuild or to pull them down, and also to
permit the construction on his land plot to the other persons. These
rights shall be exercised under the condition that the town-development
and construction norms and rules, as well as the demands with regard to
the intended purpose of the land plot (Item 2 of Article 260) be complied
with.
2. Unless otherwise stipulated by the law or by the agreement, the
owner of the land plot shall acquire the right of ownership to the
building, the structure or the other kind of the immovable property,
which he has erected or created for himself on the land plot in his
ownership.
The consequences of the unauthorized construction, effected by the
owner on the land plot in his ownership, shall be defined by Article 222
of the present Code.
Article 264. The Rights to the Land of the Persons, Who Are Not the
Owners of the Land Plots
1. The land plots and the immovable property, situated on them, may
be given by their owners to the other persons into the permanent or
temporary use, including in rent.
2. The person, who is not the owner of the land plot, shall exercise
the rights to the possession and to the use of the land plot on the terms
and within the limits, laid down by the law or by the agreement with the
owner.
3. The possessor of the land plot, who is not the owner, shall not
have the right to dispose of this land plot, unless otherwise stipulated
by the law or by the agreement.
Article 265. The Grounds for the Acquisition of the Right to the
Inherited Life Possession of the Land Plot
The right of the inherited life possession of the land plot, which
is in the state or in the municipal ownership, shall be acquired by the
citizens on the grounds and in the order, stipulated by the land
legislation.
Article 266. Possession and Use of the Land Plot by the Right of the
Inherited Life Possession
1. The citizen, enjoying the right of the inherited life possession
(the possessor of the land plot) shall have the right of the possession
and of the use of the land plot, which shall be passed by the right of
succession.
2. Unless otherwise following from the terms, established for the
use of the land plot by the law, the owner of the land plot shall have
the right to erect on it buildings and structures and to create the other
kinds of the immovable property, acquiring to it the right of ownership.
Article 267. Disposal of the Land Plot, Which Is in the Inherited
Life Possession
1. The possessor of the land plot shall have the right to give it in
rent or into a gratuitous temporary use.
2. The sale and the mortgage of the land plot and the performance by
its owner of the other deals, which entail or may entail the alienation
of the land plot, shall not be admitted.
Article 268. The Grounds for the Acquisition of the Right of the
Permanent (Perpetual) Use of the Land Plot
1. The right of the permanent (perpetual) use of the land plot,
which is in the state or in the municipal ownership, shall be granted to
the citizens and to the legal entities on the ground of the decision of
the state or of the municipal body, authorized to grant land plots into
this kind of use.
2. The right of the permanent use of the land plot may also be
acquired by the owner of the building, the structure and the other kind
of the immovable property in the cases, stipulated by Item 1, Article 271
of the present Code.
3. In case of the reorganization of the legal entity, its right of
the permanent use shall be passed in the order of the legal succession.
Article 269. Possession and Use of the Land by the Right of the
Permanent Use
1. The person, to whom the land plot has been given into the
permanent use, shall exercise the possession and the use of this land
plot within the limits, established by the law, by the other legal acts
and by the act on granting the land plot into the use.
2. The person, to whom the land plot has been granted into the
permanent use, shall have the right, unless otherwise stipulated by the
law, to independently use the land plot for the purposes, for which it
has been granted, including the erection with these purposes in view on
the land plot of the buildings, the structures and the other kinds of the
immovable property. The buildings, the structures and the other kinds of
the immovable property, erected by this person for himself, shall be his
property.
Article 270. Disposal of the Land Plot, Which Is in the Permanent
Use
The person, to whom the land plot has been granted into the
permanent use, shall have the right to give this land plot in rent or
into a gratuitous temporary use only upon the consent of the owner of the
land plot.
Article 271. The Right of the Use of the Land Plot by the Owner of
the Immovable Property
1. The owner of the building, of the structure or of the other kind
of the realty, situated on the land plot, which is in the ownership of
another person, shall have the right of the use to the part of the land
plot, assigned by the latter for this realty.
Unless otherwise following from the law, from the decision on the
assignment of the land plot, which is in the state or in the municipal
ownership, or from the agreement, the owner of the building or of the
structure shall have the right of the permanent use of the part of the
land plot (Articles 268-270), on which this immovable property is
situated.
2. If the right of ownership to the realty, situated on the other
man's land plot, is transferred to another person, the latter shall
acquire the right of the use of the corresponding part of the land plot
on the same terms and in the same volume, as the former owner of the
realty.
The transfer of the right of ownership to the land plot shall not be
the ground for the termination or the amendment of the right to the use
of this land plot, belonging to the owner of the realty.
3. The owner of the realty, situated on the other man's land plot,
shall have the right to possess, to use and to dispose of this realty at
his own discretion, including the pulling down of the corresponding
buildings and structures, so far as this does not contradict the terms,
laid down for the use of the given land plot by the law or by the
agreement.
Article 272. The Consequences of the Loss by the Realty Owner of the
Right to the Use of the Land Plot
1. If the right to the use of the land plot, granted to the owner of
the realty, situated on this land plot, is terminated (Article 271), the
rights to the realty, left by its owner on the land plot, shall be
defined in conformity with an agreement between the owner of the land
plot and the owner of the corresponding immovable property.
2. In the absence of, or in case of the failure to reach an
agreement, stipulated in Item 1 of the present Article, the consequences
of the termination of the right to the use of the land plot shall be
defined by the court upon the claim of the owner of the land plot or of
the owner of the realty.
The owner of the land plot shall have the right to claim through the
court that the owner of the realty remove it from his land plot after the
termination of the right to the use of the land plot and bring the land
plot into its primary state.
In the cases, when the demolition of the building or of the
structure, situated on the land plot, is prohibited in conformity with
the law or with the other legal acts (the living quarters, the monuments
of culture and history, etc.), or is not subject to being effected in
view of an obvious excess of the cost of the building or the structure
over the cost of the land plot assigned for it, the court, taking into
account the grounds for the termination of the right to the use of the
land plot and in case of the corresponding claims being filed by the
parties, shall have the right:
- to recognize the right of the owner of the realty to the
acquisition into ownership of the land plot, on which this realty is
situated, or the right of the owner of the land plot to the acquisition
of the realty left upon it, or to lay down the terms for the use of the
land plot by the owner of the realty for a new period of time.
3. The rules of the present Article shall not be applied, if the
land plot is withdrawn for the state or for the municipal needs (Article
283), and also in case the rights to the land plot are terminated in view
of its improper use (Article 286).
Article 273. Transfer of the Right to the Land Plot in Case of the
Alienation of the Buildings or the Structures, Situated
on It
In the transfer of the right of ownership to the building or to the
structure, belonging to the owner of the land plot, on which it is
situated, the rights to the land plot, defined by the agreement between
the parties, shall pass to the acquirer of the building (the structure).
Unless otherwise stipulated by the agreement on the alienation of
the building or of the structure, the right of the ownership to that part
of the land plot, which is occupied by the building (the structure) and
which is necessary for its use, shall also pass to the acquirer.
Article 274. The Right of the Limited Use of the Other Person's Land
Plot (the Servitude)
1. The owner of the immovable property (the land plot and the other
realty) shall have the right to claim from the owner of the neighboring
land plot, and if necessary, also from the owner of yet another land plot
(the neighboring plot) that the right of the limited use of the
neighboring land plot (the servitude) be granted to him.
The servitude may be established to guarantee the passage across the
neighboring land plot both on foot and by a motor vehicle, to provide for
the laying and operating of the electric power and communication lines,
as well as of the pipelines, for the water supply and amelioration, and
also for the other needs of the owner of the realty, which cannot be
provided for without establishing the servitude.
2. The burdening of the land plot with the servitude shall not
deprive the owner of the land plot of the rights of the possession, the
use and the disposal of this land plot.
3. The servitude shall be established by an agreement between the
person, claiming the institution of the servitude, and the owner of the
neighboring land plot, and shall be subject to the registration in
conformity with the procedure, laid down for the registration of the
immovable property. In case of the failure to reach an agreement on the
establishment or on the terms of the servitude, the dispute shall be
resolved by the court upon the claim of person, demanding that the
servitude be instituted.
4. On the terms and in conformity with the order, stipulated by
Items 1 and 3 of the present Article, the servitude may also be
established in the interest and upon the claim of the person, to whom the
land plot has been granted by the right of the inherited life possession
or by the right of the permanent use.
5. The owner of the land plot, burdened with the servitude, shall
have the right, unless otherwise stipulated by the law, to claim from the
persons, in whose interest the servitude has been established, a
proportionate payment for the use of the land plot.
Article 275. Preservation of the Servitude in the Transfer of the
Rights to the Land Plot
1. The servitude shall be preserved in the case of the transfer of
the land plot, burdened with this servitude, to the other person.
2. The servitude shall not be an independent object of the purchase
and sale or of the mortgage, and shall not be transferred in any way to
the persons, who are not the owners of the immovable property, to provide
for the use of which the servitude has been established.
Article 276. Termination of the Servitude
1. Upon the claim of the owner of the land plot, burdened with the
servitude, the servitude may be terminated in view of the disappearance
of the grounds, on account of which it has been instituted.
2. In the cases, when the land plot, owned by the citizen or by the
legal entity, cannot be used in conformity with its intended purpose as a
result of its being burdened with the servitude, the owner shall have the
right to claim through the court that the servitude be terminated.
Article 277. The Burdening with the Servitude of the Buildings and
the Structures
As applied to the rules, stipulated by Articles 274-276 of the
present Code, with the servitude may also be burdened the buildings, the
structures and the other immovable property, whose limited use is
necessary, regardless of the use of the land plot.
Article 278. The Turning of the Penalty onto the Land Plot
The turning of the penalty onto the land plot by the obligations of
its owner shall be admitted only on the grounds of the court decision.
Article 279. Redemption of the Land Plot for the State and for the
Municipal Needs
1. The land plot may be withdrawn from the owner for the state or
for the municipal needs by way of redemption.
Depending on for whose needs the land plot is being withdrawn, the
redemption shall be effected by the Russian Federation, by the
corresponding subject of the Russian Federation, or by the municipal
entity.
2. The decision on the withdrawal of the land plot for the state or
for the municipal needs shall be adopted by the federal executive power
bodies and by the executive power bodies of the subjects of the Russian
Federation.
The state bodies, authorized to take decisions on the withdrawal of
land plots for the state or for the municipal needs, and the order of the
preparation and the adoption of these decisions shall be defined by the
federal land legislation.
3. The owner of the land plot shall be notified in written form
about the forthcoming withdrawal of the land plot not later than one year
in advance by the body, which has passed the decision on the withdrawal.
The redemption of the land plot before the expiry of one year from the
date of the owner's receipt of the notification shall be effected only
upon his consent.
4. The decision of the state body on the withdrawal of the land plot
for the state or for the municipal needs shall be subject to the state
registration with the body, engaged in the registration of the rights to
the land plot. The owner of the land plot shall be notified about the
registration having been effected with the indication of its date.
5. The redemption for the state or for the municipal needs of a part
of the land plot shall be admitted only with the consent of the owner.
Article 280. The Rights of the Owner of the Land Plot, Subject to
Withdrawal for the State or for the Municipal Needs
The owner of the land plot, subject to the withdrawal for the state
or for the municipal needs, shall have the right to possess, use and
dispose of the plot at his own discretion, and also to make the necessary
outlays, providing for the use of the land plot in conformity with its
stipulated purpose, over the period of time from the moment of the
registration of the decision on the withdrawal of the land plot and up to
the moment of reaching an agreement, or of the court passing the decision
on the redemption of the land plot. However, the owner shall take the
risk that the outlays and the losses he has borne in connection with the
new construction, with the extension and the reconstruction of the
buildings and the structures on the land plot during the said period may
be turned against himself when defining the redemption price of the land
plot (Article 281).
Article 281. Redemption Price of the Land Plot, Withdrawn for the
State or for the Municipal Needs
1. The payment for the land plot. being withdrawn for the state or
for the municipal needs (the redemption price), the term and the other
conditions of the redemption shall be defined by an agreement with the
owner of the land plot. The agreement shall incorporate an obligation of
the Russian Federation, of the subject of the Russian Federation or of
the municipal entity to pay the redemption price for the withdrawn land
plot.
2. While defining the redemption price, incorporated into it shall
be the market cost of the land plot and of the immovable property,
situated on it, as well as all the losses, inflicted upon the owner by
the withdrawal of the land plot, including the losses, borne by him in
connection with an advanced termination of his obligations to the third
persons, including the missed profit.
3. By an agreement with the owner, he may be allotted, instead of
the land plot, withdrawn for the state of for the municipal needs,
another land plot, with the offsetting of its cost against the redemption
price.
Article 282. Redemption of the Land Plot for the State and Municipal
Needs by the Court Decision
If the owner does not agree with the decision on the withdrawal from
him of his land plot for the state or for the municipal needs, or if no
agreement has been reached with him on the redemption price or on the
other terms of the redemption, the state body, which has adopted the said
decision, shall have the right to file a claim for the redemption of the
land plot with the court. The claim for the redemption of the land plot
for the state or for the municipal needs may be presented within two
years from the moment of forwarding the notification, indicated in Item
3, Article 279 of the present Code, to the owner of the land plot.
Article 283. Cessation of the Rights of the Possession or the Use of
the Land Plot When It Is Withdrawn for the State or
Municipal Needs
In the cases, when the land plot, being withdrawn for the state or
for the municipal needs, is in the ownership and in the use by the right
of the inherited life possession or of the permanent use, the cessation
of these rights shall be effected in accordance with the rules,
stipulated by Articles 279-282 of the present Code.
Article 284. Withdrawal of the Land Plot, Which Is Not Used in
Conformity with Its Purpose
The land plot may be withdrawn from the owner in the cases, when it
is purposed for agricultural production or for the housing or the other
kind of construction, but is not used for the corresponding purpose in
the course of three years, unless a longer term has been stipulated by
the law. Within this period shall not be included the time, which is
necessary for the development of the land plot, as well as the time,
during which the land plot could not have been put to its purported use
because of the natural calamities or of the other circumstances,
precluding such use.
Article 285. Withdrawal of the Land Plot, Used with the Violation of
the Legislation
The land plot may be withdrawn from the owner, if the use of the
land plot proceeds with a crude violation of the rules for the rational
use of the land, laid down by the land legislation, in particular, if the
land plot is not used in conformity with its intended purpose, or if its
use causes an essential fall in the fertility of the farming lands or
seriously deteriorates the ecological situation.
Article 286. The Order of Redemption of the Land Plot in View of Its
Improper Use
1. The state power body or the local self-government body,
authorized to adopt decisions on the withdrawal of land plots on the
grounds, stipulated by Articles 284 and 285 of the present Code, as well
as the procedure for an obligatory advance warning of the land plot
owners on the violations, committed by them, shall be defined by the law.
2. If the owner of the land plot notifies in written form the body,
which has adopted the decision on the withdrawal of the land plot, about
his consent to execute this decision, the land plot shall be subject to
the sale at an open auction.
3. If the owner of the land plot does not agree with the decision on
the withdrawal of the land plot from him, the body, which has passed the
decision on the withdrawal of the land plot, may file the claim for the
sale of the land plot with the court.
Article 287. Termination of the Rights to the Land Plot, Belonging
to the Persons, Who Are Not Its Owners
The termination of the rights to the land plot, belonging to the
lease-holders and to the other persons, who are not its owners, for the
reason of an improper use of the land plot by these persons, shall be
effected on the grounds and in conformity with the order, established by
the land legislation.
Chapter 18. The Right of Ownership and the Other Rights of Estate to
the Living Quarters
Article 288. The Ownership of the Living Quarters
1. The owner shall exercise his rights of the possession, the use
and the disposal of the living quarters in his ownership in conformity
with their intended purpose.
2. The living quarters shall be intended for the citizens'
residence.
The citizen-the owner of the living quarters may use them for his
own residence and for the residence of the members of his family.
The living quarters may be given by their owner in rent for
residence on the ground of a contract.
3. The accommodation in the dwelling houses of various kinds of
industrial production shall not be admitted.
The accommodation by the owner in the living quarters he owns of the
enterprises, institutions and organizations shall be admitted only after
the said quarters have been turned from the living into the non-living
ones. The transfer of the quarters from the living into the non-living
ones shall be effected in conformity with the procedure, defined by the
housing legislation.
Article 289. The Flat as an Object of the Right of Ownership
To the owner of the flat in an apartment house, alongside the
quarters he owns, occupied by his flat, shall also belong a share in the
right of the ownership to the common property of the house (Article 290).
Article 290. The Common Property of the Owners of Flats in an
Apartment House
1. The owners of flats in an apartment house shall own by the right
of the common share ownership the common quarters of the house, the
house's load-carrying structures, the mechanical and electrical
equipment, the plumbing fixtures and the other equipment outside or
within the flat, servicing more than one flat.
2. The owner of the flat shall not have the right to alienate his
share in the right of the ownership to the common property of the
apartment house, or to perform other actions, entailing the transfer of
this share apart from the right of the ownership to the flat.
Article 291. The Partnership of the Housing Owners
1. To provide for the exploitation of the apartment house, the use
of the flats and of their common property, the owners of flats shall set
up the partnerships of the owners of flats (of the housing).
2. The partnership of the owners of flats shall be the non-profit
organization, set up and operating in conformity with the Law on the
Partnerships of the Owners of Flats.
Article 292. The Rights of the Family Members of the Owners of the
Living Quarters
1. The family members of the owner, residing in the living quarters
he owns, shall have the right to use these quarters on the terms,
stipulated by the housing legislation.
Members with dispositive capacity of the family of an owner living
in housing premises belonging to the owner shall bear joint and several
liability with the owner for the obligations arising from the use of the
housing premises.
2. The transfer of the right of the ownership to the dwelling house
or to the flat to the other person shall not be the ground for the
cessation of the right of the use of the living quarters by the family
members of the former owner, unless otherwise established by law;
3. The family members of the owner of the living quarters may claim
the elimination of the violations of their rights to the living quarters
on the part of any persons, including on the part of the owner of the
living quarters.
4. Alienation of housing premises in which there live members of
the family of an owner that are minors or lack or have limited
dispositive capacity, if in this case there are affected the rights or
legal interests of the indicated persons, shall be permitted with the
consent of an agency of guardianship or curatorship.
Article 293. Cessation of the Right of the Ownership to the
Mismanaged Living Quarters
If the owner of the living quarters uses them other than for their
intended purpose, systematically violates the rights and interests of the
neighbors or mismanages the housing by allowing its destruction, the
local self-government body shall warn the owner about the need to
eliminate the said violations, and if these violations entail the
destruction of the living quarters - it shall also fix an approximate
term for the owner to perform the repairs of the quarters.
If the owner after the warning continues to violate the rights and
interests of the neighbors or to use the living quarters for other than
their intended purpose, or does not perform the necessary repairs without
serious grounds, the court, upon the claim of the local self-government
body, shall have the right to adopt the decision on the sale of such
living quarters at an open auction with the subsequent payment to the
owner of the means, derived from the sale, minus the expenses, involved
in the execution of the court decision.
Chapter 19. The Right of Economic Management and the Right of
Operation Management
Article 294. The Right of Economic Management
The state or the municipal unitary enterprise, which owns the
property by the right of economic management, shall possess, use and
dispose of this property within the limits, defined in conformity with
the present Code.
Article 295. The Rights of the Owner with Respect to the Property in
Economic Management
1. The owner of the property in economic management, in conformity
with the law, shall resolve the issues, involved in the setting up of the
enterprise, in defining the object and the goals of its activity, in its
reorganization and liquidation; he shall appoint the director (the head)
of the enterprise and shall exert control over the use in conformity with
the stipulated purpose and over the maintenance of the property, assigned
to it.
The owner shall have the right to obtain a part of the profit,
derived from the use of the property in the economic management of the
enterprise.
2. The enterprise shall not have the right to sell the immovable
property, belonging to it by the right of economic management, to give it
in rent, to mortgage it, to contribute it as an investment into the
authorized (joint) capital of the economic companies and the
partnerships, or to dispose of it in any other way without the consent of
the owner.
The enterprise shall dispose of the rest of the property, belonging
to it, independently, with the exception of the cases, established by the
law or by the other legal acts.
Article 296. The Right of Operation Management
1. The state enterprises, as well as the institutions, shall exert
with respect to the property, assigned to them, within the range,
established by the law, and in conformity with the goals of their
activity, the orders of the owner and the purpose of the property, the
rights of its possession, use and disposal.
2. The owner of the property, assigned to the state enterprise or
institution, shall have the right to withdraw the property, which is
superfluous, unused or used other than for the stipulated purpose, and to
dispose of it at his own discretion.
Article 297. Disposal of the Property of the State Enterprise
1. The state enterprise shall have the right to alienate or to
dispose in another way of the property, assigned to it, only with the
consent of the owner of this property.
The state enterprise shall independently realize the products it
manufactures, unless otherwise established by the law or by the other
legal acts.
2. The order for the distribution of the incomes of the state
enterprise shall be defined by the owner of its property.
Article 298. Disposal of the Property of the Institution
1. The institution shall not have the right to alienate or to
dispose in any other way of the property, assigned to it, and also of the
property it has acquired at the expense of the means, allocated to it by
an estimate.
2. If, in conformity with the constituent documents, the institution
has been granted the right to engage in a profitable activity, the
incomes, derived from such an activity, and the property, acquired at the
expense of these incomes, shall be independently disposed of by the
institution and shall be registered on a separate balance.
Article 299. The Acquisition and the Termination of the Right of
Economic Management and of the Right of Operation
Management
1. The right of economic management or the right of operation
management of the property, with respect to which the owner has adopted
the decision to assign it to a unitary enterprise or to an institution,
shall arise with the given enterprise or institution from the moment of
the transfer of this property, unless otherwise established by the law
and by the other legal acts, or by the owner's decision.
2. The fruits, products and incomes from the use of the property in
the economic or in the operation management, as well as the property,
which the unitary enterprise or the institution has acquired by a
contract or on the other grounds, shall pass into the economic or into
the operation management of the enterprise or of the institution in
conformity with the order, established by the present Code, by the other
laws and the other legal acts for the acquisition of the right of
ownership.
3. The right of economic management and the right of operation
management shall be terminated on the grounds and in conformity with the
order, stipulated by the present Code, by the other laws and the other
legal acts for the termination of the right of ownership, and also in the
case of the lawful withdrawal of the property from the enterprise or from
the institution by the owner's decision.
Article 300. Preservation of the Rights to the Property When the
Enterprise or the Institution Is Transferred to Another
Owner
1. When the right of the ownership to the state or to the municipal
enterprise as a property complex is transferred to another owner of the
state or of the municipal property, such an enterprise shall preserve the
right of economic management to the property, belonging to it.
2. When the right of the ownership to the institution is transferred
to another person, this institution shall preserve the right of operation
management with respect to the property, belonging to it.
Chapter 20. Protection of the Right of Ownership and of the Other
Rights of Estate
Article 301. Reclamation of the Property from the Other Person's
Adverse Possession
The owner shall have the right to reclaim his property from the
other person's adverse possession.
Article 302. Reclamation of the Property from the Bona Fide Acquirer
1. If the property has been purchased for a price from the person,
who had no right to alienate it, of which the acquirer has been unaware
and could not have been aware (the bona fide acquirer, or the acquirer in
good faith), the owner shall have the right to reclaim this property from
the acquirer, if the said property was lost by the owner or by the
person, to whom the owner has passed the property into possession, or if
it was stolen from the one or from the other, or if it has gone out of
their possession in another way contrary to their will.
2. If the property has been acquired gratuitously from the person,
who had no right to alienate it, the owner shall have the right to
reclaim the property in any case.
3. The money, and also the securities to bearer shall not be
reclaimed from the bona fide acquirer.
Article 303. Settlements in the Reclamation of the Property from the
Adverse Possession
In reclaiming the property from the other person's adverse
possession, the owner shall also have the right to claim from the person,
who has known, or should have known, that his possession is adverse (the
possessor in bad faith), the return or the compensation of all the
incomes, which he has derived, or should have derived, over the entire
period of the possession; and from the bona fide possessor - the return
or the compensation of all the incomes, which he has derived, or should
have derived from the moment, when he has learned, or should have
learned, about the adversity of the possession or when he has received
the summons by the owner's claim for the return of the property.
The possessor, both in good and in bad faith, shall in his turn have
the right to claim that the owner recompense the necessary outlays for
the property he has made over that period of time, for which the incomes
from the property are due to the owner.
The bona fide possessor shall have the right to retain the
improvements he has made in his own possession, if they can be set apart
without damaging the property. If such separation of the improvements is
impossible, the bona fide possessor shall have the right to claim the
compensation of the outlays for the improvements he has made, but not in
excess of the amount of the increment in the property's cost.
Article 304. Protection of the Owner's Rights from the Violations,
Not Involved in the Deprivation of the Possession
The owner shall have the right to claim that all violations of his
right be eliminated, even though these violations have not entailed the
deprivation of the possession.
Article 305. Protection of the Rights of the Possessor, Who Is Not
the Owner
The rights, stipulated by Articles 301-304 of the present Code,
shall also belong to the person, who, even though he is not the owner but
possesses the property by the right of the inherited life possession, of
the economic management, of the operation management or on the other
grounds, stipulated by the law or by the contract. This person shall have
the right to the protection of his possession also against the owner.
Article 306. The Consequences of the Termination of the Right of
Ownership by Force of the Law
If the Russian Federation passes the law, terminating the right of
ownership, the losses, inflicted upon the owner as a result of the
adoption of this act, including the cost of the property, shall be
recompensed by the state. The disputes on the compensation for the losses
shall be resolved by the court.
Section III. The General Part of the Law of Obligation
Subsection 1. The General Provisions on Obligations
Chapter 21. The Concept and the Aspects of an Obligation
Article 307. The Concept of an Obligation and the Grounds for It to
Arise
1. By force of an obligation, one person (the debtor) shall be
obliged to perform in favour of another person (the creditor) a certain
action, such as: to transfer the property, to perform a job, to pay the
money, etc., or to abstain from a certain action, while the creditor
shall have the right to claim that the debtor discharge his obligation.
2. Obligations shall arise from an agreement, from the infliction of
a damage, or on the other grounds, indicated in the present Code.
Article 308. The Parties to an Obligation
1. One or several persons simultaneously may take part in the
obligation in the capacity of each of its parties.
The invalidity of the creditor's claims against one of the persons,
participating in the obligation on the side of the debtor, the same as
the expiry of the term of the limitation of actions by the claim against
such a person, shall not of themselves have a bearing on his claims
against the rest of these persons.
2. If each of the parties by the contract shall bear a duty in
favour of the other party, it shall be regarded as the debtor of the
other party by what it is obliged to do in its favour, and simultaneously
as its creditor by what it has the right to claim from it.
3. The obligation shall not create the duties for the persons, who
do not participate in it in the capacity of the parties (for the third
persons).
In the cases, stipulated by the law, by the other legal acts or by
an agreement between the parties, the obligation may create for the third
persons the rights with respect to one or to both parties of the
obligation.
Chapter 22. The Discharge of Obligations
Article 309. The General Provisions
Obligations shall be discharged in the proper way in conformity with
the terms of the obligation and with the requirements of the law and of
the other legal acts, and in the absence of such terms and requirements -
in conformity with the customs of the business turnover or with the other
habitually presented demands.
Article 310. Inadmissibly of the Unilateral Refusal to Discharge the
Obligation
The unilateral refusal to discharge the obligation and the
unilateral amendment of its terms shall not be admitted, with the
exception of the law-stipulated cases. The unilateral refusal to
discharge the obligation, connected with its parties' performing the
business activity, and the unilateral amendment of the terms of such an
obligation shall also be admissible in the cases, stipulated by the
contract, unless otherwise following from the law or from the substance
of the obligation.
Article 311. Discharge of the Obligation by Parts
The creditor shall have the right to accept the discharge of the
obligation by parts, unless otherwise stipulated by the law, by the other
legal acts and by the terms of the obligation, and does not follow from
the customs of the business turnover or from the substance of the
obligation.
Article 312. Discharge of the Obligation to the Proper Person
Unless otherwise stipulated by the agreement between the parties and
follows from the customs of the business turnover, or from the substance
of the obligation, the debtor shall have the right, while discharging the
obligation, to demand proofs of the fact that the discharge is accepted
by the creditor himself or by the person he has authorized for this
purpose, and shall take the risk of the consequences of his failure to
present such a demand.
Article 313. Discharge of the Obligation by the Third Person
1. The discharge of the obligation may be imposed by the debtor upon
the third person, unless the debtor's duty to discharge the obligation in
person follows from the law, from the other legal acts, from the terms of
the obligation or from its substance. In this case the creditor shall be
obliged to accept the discharge, offered by the third person instead of
by the debtor.
2. The third person, undergoing the threat of losing his right to
the property of the debtor (the right of the lease, of the mortgage,
etc.) as a result of the creditor's turning the penalty onto this
property, may at his own expense satisfy the creditor's claim without
obtaining the debtor's consent. In this case, the rights of the creditor
by the obligation shall pass to the third person in conformity with
Articles 382-387 of the present Code.
Article 314. The Term of the Discharge of the Obligation
1. If the obligation stipulates, or allows to stipulate the day of
its discharge or the period of time, within which it shall be discharged,
the obligation shall be subject to discharge on this particular day or,
correspondingly, at any moment within this period.
2. In the cases, when the obligation does not stipulate the deadline
for its discharge and does not contain the terms, making it possible to
define this deadline, it shall be discharged within a reasonable term
after the inception of the obligation.
The obligation, which has not been discharged within a reasonable
term, the same as the obligation, the term of whose discharge has been
defined by the moment of demand, shall be discharged by the debtor within
seven days from the day of the creditor's presenting the claim for its
discharge, unless the duty of the discharge within a different term
follows from the law, from the other legal acts, from the provisions of
the obligation, from the customs of the business turnover, or from the
substance of the obligation.
Article 315. Advanced Discharge of the Obligation
The debtor shall have the right to discharge the obligation in
advance of the deadline, unless otherwise stipulated by the law, by the
other legal acts or by the terms of the obligation or follows from its
substance. However, an advanced discharge of the obligations, involved in
the performance by its parties of the business activity, shall be
admitted only in the cases, when the possibility to discharge the
obligation before the fixed date has been stipulated by the law, by the
other legal acts or by the terms of the obligation, or follows from the
customs of the business turnover or from the substance of the obligation.
Article 316. The Place of Discharge of the Obligation
Unless the place of the discharge has been defined by the law, by
the other legal acts or by the agreement or follows from the customs of
the business turnover or from the substance of the obligation, the
discharge shall be effected:
- by the obligation to transfer the land plot, the building, the
structure or the other immovable property - at the place of location of
the property;
- by the obligation to transfer the commodity or the other property,
envisaging its shipment - at the place of the ceding the property to the
first shipper for its being forwarded to the creditor;
- by the other obligations of the businessman to transfer the
commodity or the other property - at the place of the manufacture or of
the storage of the property, if this place has been known to the creditor
at the moment of the inception of the obligation;
- by the pecuniary obligation - at the place of residence of the
creditor at the moment of the inception of the obligation, and if the
creditor is a legal entity - at the place of its location at the moment
of the inception of the obligation; if the creditor by the moment of the
discharge of the obligation has changed the place of his residence or the
place of his stay and has informed about this the debtor - at the new
place of the creditor's residence or stay, with referring the expenses,
involved in the change of the place of discharge, onto the creditor's
account;
- by all the other obligations - at the place of residence of the
debtor, and in case the debtor is a legal entity - at the place of its
location.
Article 317. The Currency of the Pecuniary Obligations
1. The pecuniary obligations shall be expressed in roubles (Article
140).
2. In the pecuniary obligation it may be stipulated that it shall be
liable to the payment in roubles in the amount, equivalent to the
definite amount in the foreign currency, or in the agreed monetary units
(ECU, the "special borrowing rights", etc.). In this case, the amount
liable to the payment in roubles shall be defined in conformity with the
official exchange rate of the corresponding currency or of the
conventional monetary units by the day of the payment, unless the other
exchange rate or the other day of its formulation has been established by
the law or by the parties' agreement.
3. The use of the foreign currency and also of the payment documents
in the foreign currency on the territory of the Russian Federation by
obligations shall only be admitted in the cases, in the order and on the
terms, defined by the law or established in conformity with the
procedure, laid down by it.
Article 318. The Increase of the Amounts, Paid Out for the
Maintenance of the Citizen
The amount, paid out by the direct pecuniary obligation for the
maintenance of the citizen: to recompense for the harm, inflicted to the
life or to the health, by the contract for a life maintenance, and in the
other cases - shall be indexed taking into account the level of the
inflation in the procedure and cases stipulated by law.
Article 319. Priority for Satisfaction of Claims under the
Monetary Obligation
The amount of the effected payment, insufficient for the discharge
of the pecuniary obligation in full, in the absence of another agreement,
shall first of all cover the creditor's expenses, involved in the
enforcement of the discharge, then - the interest, and in the remaining
part - the basic amount of the debt.
Article 320. Discharge of the Alternative Obligation
The debtor, who is obliged to transfer to the creditor this or that
property, or to perform one of the two or of several actions, shall have
the right of choice, unless otherwise following from the law, from the
other legal acts or from the terms of the obligation.
Article 321. Discharge of the Obligation, in Which Several Creditors
or Several Debtors Participate
If several creditors or several debtors take part in the obligation,
each of the creditors shall have the right to claim the discharge, and
each of the debtors shall be obliged to discharge the obligation in an
equal share with the others, unless otherwise following from the law,
from the other legal acts, or from the terms of the obligation.
Article 322. Joint Obligations
1. The joint duty (the liability), or the joint claim shall arise,
if the joint nature of the duty or of the claim has been stipulated by
the contract or has been established by the law, in particular, in the
case of the indivisibility of the object of the obligation.
2. The duties of several debtors by the obligation, involved in the
business activity, the same as the claims of several creditors in such an
obligation, shall be joint ones, unless otherwise stipulated by the law,
by the other legal acts, or by the terms of the obligation.
Article 323. The Creditor's Rights in the Joint Duty
1. In case of the debtors' joint duty, the creditor shall have the
right to claim the discharge both from all the debtors jointly, and also
from any one of them taken apart, and both in full and in the part of the
debt.
2. The creditor, who has not been fully satisfied by one of the
joint debtors, shall have the right to claim the rest from the joint
debtors.
The joint debtors shall stay obligated until the moment, when the
obligation has been discharged in full.
Article 324. Objections to the Creditor's Claims in the Joint Duty
In the case of the joint duty, the debtor shall not have the right
to put forward against the creditor's claims the objections, which are
based on such relations of the other debtors with the creditor, in which
the said debtor does not participate.
Article 325. Discharge of the Joint Duty by One of the Debtors
1. The discharge of the joint duty in full by one of the debtors
shall absolve the rest of the debtors from the discharge toward the
creditor.
2. Unless otherwise following from the relations between the joint
debtors:
1) the debtor, who has discharged the joint duty, shall have the
right of the claim of regress to the rest of the debtors in equal shares,
less his own share;
2) that which has not been paid by one of the joint debtors to the
debtor, who has discharged the joint duty, shall fall in equal shares on
this debtor and on the rest of the debtors.
3. The rules of the present Article shall be applied correspondingly
to the termination of the joint obligation by offsetting the claim of
regress, filed by one of the debtors.
Article 326. The Joint Claims
1. In the case of the joint claims, any of the joint creditors shall
have the right to present to the debtor the claim in the full volume.
Before the claim has been presented by one of the joint creditors,
the debtor shall have the right to discharge the obligation toward any
one of them at his own discretion.
2. The debtor shall not have the right to put forward the objections
against the claim of one of the creditors, that are based on such
relations of the debtor with the other joint creditor, in which the given
creditor does not take part.
3. The discharge of the obligations in full toward one of the
creditors shall absolve the debtor from the discharge toward the other
creditors.
4. The joint creditor, who has accepted the discharge from the
debtor, shall be obliged to recompense what is due to the other creditors
in equal shares, unless otherwise following from the relationships
between them.
Article 327. Discharge of the Obligation by Placing the Debt on a
Deposit
1. The debtor shall have the right to place the money or the
securities he owes on the notary's deposit, and in the law-established
cases - on the court's deposit, if the obligation cannot be discharged by
the debtor on account of:
1) the absence of the creditor or of the person, whom he has
authorized to accept the discharge of the obligation, at the place, where
the obligation shall be discharged;
2) the creditor's legal incapacity and his having no substitute;
3) an obvious absence of any certainty about who is the creditor by
the obligation, in particular, in connection with the dispute on this
issue arising between the creditor and the other persons;
4) the creditor's avoidance of accepting the discharge of the
obligation or any other delay on his part.
2. The placing of the sum of money or of the securities on the
notary's or on the court's deposit shall be regarded as the discharge of
the obligation.
The notary or the court, on whose deposit the money or the
securities have been placed, shall notify about this the creditor.
Article 328. The Recourse Discharge of Obligations
1. The recourse discharge shall be recognized as the discharge of
the obligation by one of the parties, which in conformity with the
agreement has been stipulated by the discharge of its obligations by the
other party.
2. In case of the obliged party's failure to discharge the
obligations, stipulated by the agreement, or of the existence of the
circumstances, obviously testifying to the fact that such discharge will
not be effected within the fixed term, the party, onto which the recourse
discharge has been imposed, shall have the right to suspend the discharge
of its obligation or to refuse to discharge this obligation, and to claim
the compensation of the losses.
If the obligation, stipulated by the agreement, has not been
discharged in the full volume, the party, onto which the recourse
discharge has been imposed, shall have the right to suspend the discharge
of its obligation or to refuse to discharge it in the part, corresponding
to the above-said underdischarge.
3. If the recourse discharge of the obligation has been effected,
despite the fact that the other party has not discharged its obligation,
stipulated by the agreement, this party shall be obliged to effect such
discharge.
4. The rules, stipulated by Items 2 and 3 of the present Article,
shall be applied, unless otherwise stipulated by the law.
Chapter 23. Providing for the Discharge of Obligations
§ 1. The General Provisions
Article 329. The Ways of Providing for the Discharge of Obligations
1. The discharge of obligations may be provided for by the forfeit,
the pledge, the retention of the debtor's property, the surety, the bank
guarantee, the advance and also in the other ways, stipulated by the law
or by the agreement.
2. The invalidity of the agreement on providing for the discharge of
the obligation shall not entail the invalidity of this obligation (the
principal obligation).
3. The invalidity of the principal obligation shall entail the
invalidity of the obligation, providing for it, unless otherwise
established by the law.
§ 2. The Forfeit
Article 330. The Concept of the Forfeit
1. The forfeit (the fine, the penalty) shall be recognized as the
sum of money, defined by the law or by the agreement, which the debtor is
obliged to pay to the creditor in case of his non-discharge, or an
improper discharge, of the obligation, in particular, in the case of the
delay of the discharge. By the claim for the payment of the forfeit, the
creditor shall not be obliged to prove that the losses have actually been
inflicted upon him.
2. The creditor shall not have the right to claim the payment of the
forfeit, if the debtor is not responsible for the non-discharge or an
improper discharge of the obligation.
Article 331. The Form of the Agreement on the Forfeit
The agreement on the forfeit shall be made out in written form,
irrespective of the form of the principal obligation.
The non-observance of the written form shall entail the invalidity
of the agreement on the forfeit.
Article 332. The Legal Forfeit
1. The creditor shall have the right to claim the payment of the
forfeit, defined by the law (the legal forfeit), irrespective of whether
the obligation for its payment has been stipulated by the agreement
between the parties.
2. The amount of the legal forfeit may be increased by the agreement
between the parties, unless it is prohibited by the law.
Article 333. The Reduction of the Forfeit
If the forfeit, liable to the payment, is obviously out of
proportion compared with the consequences of the violation of the
obligation, the court shall have the right to reduce the forfeit.
The rules of the present Article shall not infringe upon the
debtor's right to the reduction of the volume of his liability on the
ground of Article 404 of the present Code and upon the creditor's right
to the compensation of the losses in the cases, stipulated by Article 394
of the present Code.
§ 3. The Pledge
Article 334. The Concept and the Grounds for the Pledge to Arise
1. By force of the law, the creditor by the obligation, guaranteed
against by the pledge (the pledgee), shall have the right of priority
before the other creditors of the person, to whom this property belongs
(the pledger), in the case of the debtor's non-discharge of this
obligation, to be satisfied from the cost of the pledged property after
the deductions, established by the law.
The pledgee shall have the right to receive, on the same principle,
satisfaction from the insurance compensation for the loss or for the
damage of the pledged property, regardless of the fact, in whose favour
it has been insured, unless the loss or the damage has taken place for
the reasons, for which the pledgee shall be answerable.
2. The pledge of the land plots, the enterprises, the buildings, the
structures, the flats and of the other immovable property (the mortgage)
shall be regulated by the Law on the Mortgage. The general rules on the
pledge, contained in the present Code, shall be applied to the mortgage
in the cases, for which no other rules have been laid down by the present
Code or by the Law on the Mortgage.
3. The pledge shall arise by force of an agreement. It shall also
arise on the ground of the law in the case, when the circumstances,
indicated in it, occur, if the law has stipulated, what kind of the
property and for securing against the discharge of what kind of
obligation shall be recognized as that in pledge.
The rules of the present Code on the pledge, arising by force of an
agreement, shall be correspondingly applied to the pledge, arising on the
ground of the law, unless otherwise stipulated by the law.
Article 335. The Pledger
1. Both the debtor himself and the third person may come out in the
capacity of the pledger.
2. The pledger of the thing may be its owner or the person, having
with respect to it the right of economic management.
The person, to whom the thing belongs by the right of economic
management, shall have the right to pawn it without the consent of the
owner in the cases, stipulated by Item 2 of Article 295 of the present
Code.
3. The pledger of the right may be the person, to whom the pledged
right belongs.
The pledge of the right of lease or of the other right to the other
person's thing shall not be admitted without the consent of its owner or
of the person, to whom the right of its economic management belongs, if
by the law or by the agreement the alienation of this right without the
consent of the said persons has been prohibited.
Article 336. The Object of Pledge
1. The object of pledge shall be any property, including the things
and the property rights (the claims), with the exception of the property,
withdrawn from the circulation, of the claims, inseparably linked with
the creditor's personality, in particular, the claims for the alimony,
for the compensation for the harm, inflicted to the life or to the
health, and of the other rights, whose ceding to the other persons is
prohibited by the law.
2. The pledge of the individual kinds of property, in particular, of
the property of the citizens, onto which no penalty shall be turned, may
be prohibited or restricted by the law.
Article 337. The Claim, Secured Against by the Pledge
Unless otherwise stipulated by the agreement, the pledge shall
secure the claim in the volume, which it possesses by the moment of its
satisfaction, in particular, the interest, the forfeit, the compensation
of the losses, caused by the delay in the discharge, and also the
compensation of the necessary outlays, made by the pledgee for keeping
the pledged thing, as well as the expenses, involved in the exaction.
Article 338. The Pledge Without and With the Transfer of the Pledged
Property to the Pledgee
1. The pledged property shall remain in the custody of the pledger,
unless otherwise stipulated by the agreement.
The property, on which the mortgage has been imposed, and also the
pawned commodities, which are in circulation, shall not be transferred to
the pledgee.
2. The object of pledge may be left with the pledger under the lock
and seal of the pledgee.
The object of pledge may be left with the pledger with putting upon
it the signs, testifying to the pledge (the firm pledge).
3. The object of pledge, transferred by the pledger into a temporary
possession or use to the third person, shall be regarded as left with the
pledger.
4. In the pledge of the property right, certified by the security,
the latter shall be transferred to the pledgee or given into the notary's
deposit, unless otherwise stipulated by the agreement.
Article 339. The Contract on the Pledge, Its Form and Registration
1. Indicated in the contract on the pledge shall be the object of
pledge and its estimate, substance and amount, and the term of
discharging the obligation, secured against by the pledge. It shall also
contain the indication, in the custody of which party the pledged
property is.
2. The agreement on the pledge shall be made out in written form.
The agreement on the mortgage, as well as the contract on the pledge
of the movable property or of the rights to this property as the security
against the obligations by the contract, which shall be notarially
certified, shall be subject to the notary's certification.
3. The agreement on the mortgage shall be registered in conformity
with the procedure, laid down for the registration of the deals with the
corresponding property.
4. The non-observance of the rules, contained in Items 2 and 3 of
the present Article, shall entail the invalidity of the agreement on the
pledge.
Article 340. The Property, to Which the Pledgee's Rights Shall Be
Extended
1. The rights of the pledgee (the right of pledge) to the thing,
which is the object of pledge, shall be extended to its accessories,
unless otherwise stipulated by the agreement.
To the fruits, products and incomes, obtained as a result of the use
of the pledged property, the right of pledge shall be extended in the
law-stipulated cases.
2. In the mortgage of an enterprise or of another property complex
as a whole, the right of pledge shall be extended to all the property,
included into its composition, both movable and immovable, including the
right of claim and the exclusive rights, among them those that have been
acquired during the period of the mortgage, unless otherwise stipulated
by the law or by the agreement.
3. The mortgage of a building or of a structure shall be admitted
only with the simultaneous mortgage by the same contract of the land
plot, on which this building or this structure stands, or of the part of
this land plot, functionally providing for the mortgaged object, or of
the right of the lease of this land plot or of the corresponding part
thereof, belonging to the pledger.
4. In the mortgage of the land plot, the right of mortgage shall not
be extended to the buildings and the structures, which have been, or are
being constructed on the given land plot by the mortgager, unless
otherwise stipulated by the contract.
In the absence of the relevant term in the contract, in case the
penalty is turned onto the mortgaged land plot, the mortgager shall
retain the right to a limited use (the servitude) of that part of the
plot, which is necessary for the use of the building or of the structure
in conformity with their intended purpose. The terms for the use of this
part of the land plot shall be defined by the agreement, concluded
between the mortgager and the mortgagee, and in case a dispute arises -
by the court.
5. If the mortgage has been established over the land plot, where
the buildings or the structures are situated, which belong not to the
mortgager, but to another person, in case the mortgagee turns the penalty
onto this plot and it is sold at an open auction, the rights and duties,
possessed with respect to this person by the mortgager, shall pass to the
acquirer of the land plot.
6. The contract on the pledge, and with respect to the pledge,
arising on the ground of the law - the law, may stipulate the pledge of
the things and of the property rights, which the pledger will acquire in
the future.
Article 341. Arising of the Right of Pledge
1. The right of pledge shall arise from the moment of concluding the
contract of pledge, and with respect to the pledge of the property,
subject to the transfer to the pledgee - from the moment of the transfer
of this property, unless otherwise stipulated by the contract of pledge.
2. The right of pledge for the commodities in circulation shall
arise in conformity with the rules of Item 2 of Article 357 of the
present Code.
Article 342. The Subsequent Pledge
1. If the property in pledge becomes the object of yet another
pledge as a security against other claims (the subsequent pledge), the
claims of the subsequent pledgee shall be satisfied from the cost of this
property after the claims of the previous pledgees.
2. The subsequent pledge shall be admitted, unless it is prohibited
by the previous contracts of pledge.
3. The pledger shall be obliged to supply information on all the
existing pledges of the given property, stipulated by Item 1 of Article
339 of the present Code, to every one of the subsequent pledgees, and
shall be answerable for the losses, caused to the pledgees by his
non-discharge of this obligation.
Article 343. The Content and the Security of the Pledged Property
1. The pledger or the pledgee, depending on in whose custody the
pledged property is (Article 338), shall be obliged, unless otherwise
stipulated by the law or by the contract:
1) to insure at the expense of the pledger the pledged property in
its full cost against the risks of the loss and damage, and if the full
cost of the property exceeds the amount of the claim, secured against by
the pledge - for the amount not less than that of the claim;
2) to take measures, necessary to guarantee the security of the
pledged property, including those involved in its protection against the
encroachments and claims on the part of the third persons;
3) to immediately notify the other party about the arising of a
threat of the loss or the damage of the pledged property.
2. The pledgee and the pledger shall both have the right to check by
the documents and by the fact upon the existence, the quantity, the state
and the storage conditions of the pledged property, which is in the
custody of the other party.
3. In case of a crude violation by the pledgee of the obligations,
indicated in Item 1 of the present Article, which creates a threat of the
loss or the damage of the pledged property, the pledger shall have the
right to demand that the pledge be terminated in advance.
Article 344. The Consequences of the Loss or the Damage of the
Pledged Property
1. The pledger shall take the risks of an accidental perish or an
accidental damage of the pledged property, unless otherwise stipulated by
the contract of pledge.
2. The pledgee shall be answerable for the full or the partial loss
or damage of the object of pledge, transferred to him, unless he proves
that he may be relieved of the responsibility in conformity with Article
401 of the present Code.
The pledgee shall be answerable for the loss of the object of pledge
in the amount of its actual cost, and for its damage - in the amount of
the sum, by which this cost has been reduced, regardless of the sum, by
which the object of pledge was estimated at the moment of its transfer to
the pledgee.
If as a result of the damage of the object of pledge it has changed
so much that it cannot be any more used for its intended purpose, the
pledger shall have the right to reject it and to claim the compensation
for its loss.
The contract may also stipulate the pledgee's obligation to
recompense to the pledger the other losses, inflicted upon him by the
loss or the damage of the object of pledge.
The pledger, who is the debtor by the obligation, secured against by
the pledge, shall have the right to offset his claim against the pledgee
for the compensation of the losses, caused to him by the loss or by the
damage of the object of pledge, when discharging the obligation, secured
against by the pledge.
Article 345. The Replacement and Restoration of the Object of Pledge
1. The replacement of the object of pledge shall be admitted with
the consent of the pledgee, unless otherwise stipulated by the law or by
the contract.
2. If the object of pledge has perished or has been damaged, or if
the right of ownership to it or the right of its economic management has
been terminated on the grounds, established by the law, the pledger shall
have the right to restore the object of pledge or to replace it with the
other property of an equal value within a reasonable term, unless
otherwise stipulated by the contract.
Article 346. The Use and Disposal of the Object of Pledge
1. The pledger shall have the right, unless otherwise stipulated by
the contract or following from the substance of the pledge, to use the
object of pledge in conformity with its intended purpose, including
deriving from it the fruits and incomes.
2. Unless otherwise stipulated by the law or by the contract or
following from the substance of the pledge, the pledger shall have the
right to alienate the object of pledge, to give it in rent or into a
gratuitous use to another person, or to dispose of it in any other way
with the pledgee's consent.
An agreement, restricting the pledger's right to bequeath the
pledged property, shall be insignificant.
3. The pledgee shall have the right to use the object of pledge, put
into his custody, only in the cases, stipulated by the contract, and
shall regularly present a report on its use to the pledger. By the
contract, upon the pledgee may be imposed the duty to derive the fruits
and incomes from the object of pledge for the purpose of discharging the
principal obligation or in the interest of the pledger.
Article 347. The Pledgee's Protection of His Rights to the Object of
Pledge
1. The pledgee, in whose custody the pledged property is or should
have been, shall have the right to claim it from the other person's
illegal possession, including from that of the pledger (Articles 301, 302
and 305).
2. In the cases, when by the terms of the contract the pledgee has
been granted the right to use the object of pledge, transferred to him,
he may demand from the other persons, including from the pledger, that
all violations of his right be removed, even though these violations have
not been connected with the deprivation of the possession (Articles 304
and 305).
Article 348. The Grounds for Turning the Penalty onto the Pledged
Property
1. The penalty may be turned onto the pledged property in order to
satisfy the pledgee's (the creditor's) claims in case of the
non-discharge or of an improper discharge by the debtor of the
obligation, secured against by the pledge, because of the circumstances,
for which he is answerable.
2. The claim for turning the penalty onto the pledged property may
be rejected, if the violation, committed by the debtor with respect to
the obligation, secured against by the pledge, is utterly insignificant,
and for this reason, the amount of the pledger's claims is obviously out
of all proportion with the cost of the pledged property.
Article 349. Procedure for Turning the Penalty onto the Pledged
Property
1. The pledgee's (the creditor's) claims shall be satisfied from the
cost of the pledged immovable property by the court decision.
The satisfaction of the pledgee's claim at the expense of the
pledged immovable property without turning to the court shall be admitted
on the grounds of a notarially certified agreement of the pledgee with
the pledger, concluded between them after the arising of the grounds for
turning the penalty onto the object of pledge. This agreement may be
recognized by the court as invalid upon the claim of the person, whose
rights have been violated by such an agreement.
2. The pledgee's rights shall be satisfied at the expense of the
pledged movable property by the court decision, unless otherwise
stipulated by the agreement of the pledger with the pledgee. However, the
penalty shall be turned onto the object of pledge, transferred to the
pledgee, in conformity with the procedure, established by the contract of
pledge, unless the law has laid down a different procedure.
3. The penalty shall be turned onto the object of pledge only by the
court decision in the cases, when:
1) the consent or the permit of the other person or of the other
body has been required for the conclusion of the contract;
2) the object of pledge is the property, presenting a considerable
historical, artistic or another kind of cultural value for society;
3) the pledger is absent and it is impossible to identify the place
of his stay.
Article 350. Realization of the Pledged Property
1. The realization (the sale) of the pledged property, onto which,
in conformity with Article 349 of the present Code, the penalty has been
turned, shall be effected by way of selling it at an open auction in the
order, established by the procedural legislation, unless otherwise laid
down by the law.
2. Upon the request of the pledger, the court shall have the right,
in its decision on turning the penalty onto the pledged property, to
postpone its sale at an open auction for a term of up to one year. The
delay shall not concern the parties' rights and duties by the obligation,
secured against by the pledge of this property, and shall not absolve the
debtor from recompensing the creditor's losses and the forfeit, both of
which have mounted over the period of delay.
3. The initial selling price of the pledged property, from which the
bidding starts, shall be fixed by the court decision in the cases, when
the penalty has been turned onto the property through the court, or by an
agreement, concluded between the pledgee and the pledger - in the rest of
cases.
The pledged property shall be sold to the person, who offers the
highest price at the auction.
4. In case the auction is declared as having failed, the pledgee
shall have the right, by an agreement with the pledger, to acquire the
pledged property and to offset the selling price by the amount of his
claims, secured against by the pledge. To such an agreement, the rules of
the purchase and sale shall be applied.
In case the repeatedly held auction is declared as having failed,
too, the pledgee shall have the right to keep the object of pledge to
himself, while appraising its cost at an amount, which is not over 10 per
cent lower than its initial selling price at the repeatedly held auction.
If the pledgee has not availed himself of the right to keep the
object of pledge to himself within one month from the day of declaring
the repeated auction as having failed, the contract of pledge shall be
terminated.
5. If the amount, derived from the realization of the pledged
property, proves to be insufficient to cover the pledgee's claim, he
shall have the right, in the absence of any other instruction in the law
or in the contract, to obtain the underderived amount from the other
property of the debtor, while not enjoying the right of priority, based
on the pledge.
6. If the amount, derived from the realization of the pledged
property, exceeds the size of the pledgee's claim, secured against by the
pledge, the difference shall be returned to the pledger.
7. The debtor and the pledger, who is the third person, shall have
the right, at any time before the sale of the object of pledge, to
terminate the turning onto it of the penalty and its realization by
discharging the obligation, secured against by the pledge, or that part
thereof, whose discharge has been delayed. An agreement, restricting this
right, shall be regarded as insignificant.
Article 351. Advanced Discharge of the Obligation, Secured Against
by the Pledge and Turning of the Obligation onto the
Pledged Property
1. The pledgee shall have the right to demand an advanced discharge
of the obligation, secured against by the pledge, in the following cases:
1) if the object of pledge has been withdrawn from the custody of
the pledger, with whom it has been left, other than in conformity with
the terms of the contract of pledge;
2) if the pledger has violated the rules on the replacement of the
object of pledge (Article 345);
3) if the object of pledge has been lost because of the
circumstances, for which the pledger is not answerable in case the
pledger has not availed himself of the right, stipulated by Item 2,
Article 345 of the present Code.
2. The pledgee shall have the right to claim an advanced discharge
of the pledge, secured against by the pledge, and if his claim is not
satisfied, to turn the penalty onto the object of pledge in the following
cases:
1) if the pledger has violated the rules on the subsequent pledge
(Article 342);
2) if the pledger has not discharged the duties, stipulated by
Subitems 1 and 2 of Item 1 and by Item 2, Article 343 of the present
Code;
3) if the pledger has violated the rules on the disposal of the
pledged property (Item 2 of Article 346).
Article 352. Termination of the Pledge
1. The pledge shall be terminated:
1) with the termination of the obligation, secured against by the
pledge;
2) upon the demand of the pledger in the presence of the
circumstances, stipulated by Item 3, Article 343 of the present Code;
3) in case of the perish of the pledged thing or of the termination
of the pledged right, unless the pledger has availed himself of the
right, stipulated by Item 2, Article 345 of the present Code;
4) in case of the sale of the pledged property at an open auction,
and also in case of its realization proving to be impossible (Item 4 of
Article 350).
2. About the termination of the mortgage, a note shall be made in
the register, into which the mortgage contract has been entered.
3. Upon the termination of the pledge as a result of the discharge
of the obligation, secured against by the pledge, or upon the pledger's
claim (Item 3 of Article 343), the pledgee, in whose custody the pledged
property has been kept, shall immediately return it to the pledger.
Article 353. Maintaining the Pledge in Force When the Right to the
Pledged Property Is Transferred to Another Person
1. If the right of ownership to the pledged property, or the right
of the economic management of this property is transferred from the
pledger to another person as a result of a pecuniary or gratuitous
alienation of this property or by way of the universal legal succession,
the right of pledge shall be maintained in force.
The legal successor of the pledger shall occupy the place of the
pledger and shall discharge all his duties, unless otherwise stipulated
by the agreement with the pledgee.
2. If the property of the pledger, which is the object of pledge,
has passed, by way of the legal succession, to several persons, each one
of the legal successors (acquirers of the property) shall bear the
consequences, following from the non-discharge of the obligation, secured
against by the pledge, in proportion to that part of the said property,
which has passed to him. However, in case the object of pledge is
indivisible or remains in the common ownership of the legal successors,
they shall become joint pledgers.
Article 354. The Consequences of the Forcible Withdrawal of the
Pledged Property
1. If the pledger's right of ownership to the property, which is the
object of pledge, is terminated on the grounds and in the way,
established by the law, as a result of the withdrawal (redemption) for
the state or for the municipal needs, of the requisition or of the
nationalization, and if the pledger is given the other property or the
corresponding compensation, the right of pledge shall be extended to the
new property, given instead of the old property, or the pledgee shall
correspondingly acquire the right of priority in the satisfaction of his
claim from the amount of the compensation due to the pledger. The pledgee
shall also have the right to claim an advanced discharge of the
obligation, secured against by the pledge.
2. In the cases, when the property, which is the object of pledge,
is withdrawn from the pledger in conformity with the law-established
order on the ground that another person is in actual fact the owner of
this property (Article 301), or as a sanction for committing a crime or
for another violation of the law (Article 243), the pledge with respect
to this property shall be terminated. In these cases, the pledger shall
have the right to claim an advanced discharge of the obligation, secured
against by the pledge.
Article 355. The Cession of the Rights by the Contract of Pledge
The pledgee shall have the right to transfer his rights by the
contract of pledge to another person, while observing the rules on the
transfer of rights by the cession of the claim (Articles 382-390).
The cession by the pledgee of his rights by the contract of pledge
to another person shall be valid, if the rights of claim against the
debtor by the principal obligation, secured against by the pledge, have
also been ceded to the same person.
Unless otherwise proved, the cession of the rights by the contract
of mortgage shall also imply the cession of the rights by the obligation,
secured against by the mortgage.
Article 356. Transfer of the Debt by the Obligation, Secured Against
by the Pledge
In case of the transfer of the obligation, secured against by the
pledge, to another person, the pledge shall be terminated, if the pledger
has not given his consent to the creditor to be answerable for the new
debtor.
Article 357. The Pledge of Commodities in Circulation
1. The pledge of commodities in circulation shall be recognized as
the pledge of commodities with leaving them in the pledger's custody and
with granting the latter the right to modify the composition and the
natural form of the pledged property (the commodity stocks, the raw and
other materials, the semi-finished and finished products, etc.), provided
that their total cost does not become less than that indicated in the
contract of pledge.
The reduction of the cost of the pledged commodities in circulation
shall be admitted in proportion to the discharged share of the
obligation, secured against by the pledge, unless otherwise stipulated by
the contract.
2. The commodities in circulation, alienated by the pledger, shall
cease to be the object of pledge from the moment of their passing into
the ownership or into the economic or the operation management of the
acquirer, while the commodities, acquired by the pledger, which have been
indicated in the contract of pledge, shall become the object of pledge
from the moment, when the right of their ownership or of their economic
management arises with the pledger.
3. The pledger of the commodities in circulation shall be obliged to
keep a register for entering the pledges, into which he shall make
entries on the terms of the pledge of the commodities and on all the
operations, entailing the change of the composition or of the natural
form of the pledged commodities, including their processing, by the date
of the last operation.
4. In case the pledger violates the terms of the pledge of
commodities in circulation, the pledgee shall have the right to hold up
the operations with them by way of putting upon them his signs and seals
until the elimination of the violation.
Article 358. Pawning of Things at the Pawn-Shop
1. The movable property, intended for personal use, may be accepted
as a security against a short-term credit by way of the business activity
of specialized organizations - the pawn-shops.
2. The contract on pawning things at the pawn-shop shall be
legalized by issuing by the pawn-shop of a pawn-ticket.
3. The pawned things shall be passed to the pawn-shop.
The pawn-shop shall be obliged to insure the things in favour of the
pawner at its own expense in the full amount of their estimated cost,
made in conformity with the prices of things of the same category and
standard, usually fixed in trade by the moment of their being accepted in
pawn.
The pawn-shop shall not have the right to use and to dispose of the
things in pawn.
4. The pawn-shop shall bear responsibility for the loss and the
damage of the pawned things, unless it proves that the loss and the
damage have occurred because of a force-majeure.
5. In case the credit, secured against by the pawn of things at the
pawn-shop, has not been repaid within the fixed term, the pawn-shop shall
have the right, on the ground of the notary's executive endorsement, and
after the expiry of one month's extra term, to sell this property in the
order, laid down for the realization of the pledged property (Items 3, 4,
6 and 7 of Article 350). After this, the claims of the pawn- shop against
the pawner (the debtor) shall be regarded as satisfied, even if the
amount, derived from the realization of the pawned property, is
insufficient to cover them in full.
6. The rules for the citizens' crediting by the pawn-shops under the
pledge of things, belonging to the citizens, shall be laid down by the
law and by the present Code.
7. The terms of the contract on the pawn of things at the pawn-shop,
restricting the rights of the pledger as compared with the rights,
granted to him by the present Code and by the other laws, shall be
insignificant. Instead of such terms, the corresponding provisions of the
law shall be applied.
§ 4. The Retention
Article 359. The Grounds for the Retention
1. The creditor, in whose custody is the thing, subject to the
transfer to the debtor or to the person, named by the debtor, shall have
the right, in case the debtor fails to discharge in time the obligation
on the payment for this thing or on the compensation to the creditor of
the expenses and of the other losses he has borne in connection with it,
to retain it until the corresponding obligation is discharged.
By way of the thing's retention may also be secured the claims,
which, while not being connected with the payment for the thing or with
the compensation of the expenses and of the other losses, have
nevertheless arisen from the obligation, whose parties are acting as
businessmen.
2. The creditor may retain the thing in his custody, despite the
fact that after this thing has passed into the creditor's possession, the
rights to it have been acquired by the third person.
3. The rules of the present Article shall be applied, unless
otherwise stipulated by the contract.
Article 360. Satisfaction of Claims at the Expense of the Retained
Property
The claims of the creditor, who is retaining the thing, shall be
satisfied from its cost in the volume and in the order, stipulated for
the satisfaction of the claims, secured against by the pledge.
§ 5. The Surety
Article 361. The Contract of Surety
By the contract of surety, the surety shall be obliged to the
creditor of the other person to be answerable for the latter's discharge
of his obligation in full or in part.
The contract of surety may also be concluded to provide security for
an obligation, which will arise in the future.
Article 362. The Form of the Contract of Surety
The contract of surety shall be legalized in written form. The
non-observance of the written form shall entail the invalidity of the
contract of surety.
Article 363. Responsibility of the Surety
1. In case of the failure to discharge, or of an improper discharge
by the debtor, of the obligation, secured by the surety, the surety and
the debtor shall be jointly answerable to the creditor, unless the
surety's subsidiary liability is stipulated by the law or by the contract
of surety.
2. The surety shall be answerable to the creditor in the same volume
as the debtor, including the payment of the interest, the compensation of
the court expenses, involved in the exaction of the debt and of the other
losses, borne by the creditor, which have been caused by the debtor's
non-discharge or improper discharge of the obligation, unless otherwise
stipulated by the contract of surety.
3. The persons, who have provided a joint surety, shall be jointly
answerable to the creditor, unless otherwise stipulated by the contract
of surety.
Article 364. The Right of the Surety to Object to the Creditor's
Claim
The surety shall have the right to put forward against the
creditor's claim the objections, which could have been put forward by the
debtor, unless otherwise following from the contract of surety. The
surety shall not lose the right to these objections even in case the
debtor has renounced them or has recognized his debt.
Article 365. The Rights of the Surety, Who Has Discharged the
Obligation
1. To the surety, who has discharged the obligation, shall pass the
creditor's rights by this obligation and also the rights, which have
belonged to the creditor as the pledgee, in the volume, in which the
surety has satisfied the creditor's claim. The surety shall also have the
right to claim that the debtor pay the interest on the amount of money,
paid up to the creditor, and recompense the other losses, which he has
borne in connection with the liability for the debtor.
2. After the surety has discharged the obligation, the creditor
shall be obliged to pass to the surety the documents, certifying the
claim against the debtor, and to transfer to him the rights, securing
this claim.
3. The rules, established by the present Article, shall be applied,
unless otherwise stipulated by the law, by the other legal acts or by the
contract, concluded by the surety with the debtor, or unless otherwise
following from the relationships between them.
Article 366. Notification of the Surety on the Debtor's Discharge of
the Obligation
The debtor, who has discharged the obligation, secured against by
the surety, shall immediately notify about it the surety. Otherwise, the
surety, who in his turn has discharged the obligation, shall have the
right to exact from the creditor what he has groundlessly obtained, or to
file the claim of regress against the debtor. In the latter case, the
debtor shall have the right to exact from the creditor only what has been
groundlessly obtained.
Article 367. Termination of the Obligation
1. The surety shall be terminated with the termination of the
secured obligation, and also in case of the amendment of this obligation,
entailing an increase of the liability, or the other unfavourable
consequences for the surety without the latter's consent.
2. The surety shall be terminated as a result of the transfer to
another person of the debt by the obligation, secured by the surety,
unless the surety has given his consent to the creditor to be answerable
for the new debtor.
3. The surety shall be terminated, if the creditor has refused to
accept the proper discharge, offered by the debtor or by the surety.
4. The surety shall be terminated after the expiry of the term,
indicated in the contract of surety, for which it has been issued. In
case such term has not been stipulated, the surety shall be terminated,
if the creditor does not file the claim against the debtor in the course
of one year from the date of the expiry of the term, fixed for the
discharge of the secured obligation. If the term of the discharge of the
principal obligation has not been stipulated and cannot be defined, or if
it has been defined by the moment of the demand, the surety shall be
terminated, unless the creditor files the claim against the surety in the
course of two years from the date, when the contract of surety was
concluded.
§ 6. The Bank Guarantee
Article 368. The Concept of the Bank Guarantee
By force of the bank guarantee, the bank, the other credit
institution or the insurance company (the guarantor) shall issue, upon
the request of the other person (the principal) a written obligation to
pay to the creditor (the beneficiary), in conformity with the terms of
the obligation, given by the guarantor, a certain amount of money upon
the beneficiary's presenting the written claim on its payment.
Article 369. Security by the Bank Guarantee of the Principal's
Obligation
1. The bank guarantee shall provide for the proper discharge by the
principal of his obligation to the beneficiary (the principal
obligation).
2. The principal shall pay out to the guarantor a reward for the
issue of the bank guarantee.
Article 370. Independence of the Bank Guarantee from the Principal
Obligation
The obligation of the guarantor to the beneficiary, stipulated by
the bank guarantee, shall not depend in the relationships between them
upon that principal obligation, to provide for whose discharge it has
been issued, even if the guarantee contains a reference to this
obligation.
Article 371. Irrevocability of the Bank Guarantee
The bank guarantee shall not be revoked by the guarantor, unless
otherwise stipulated in it.
Article 372. Untransferability of the Rights by the Bank Guarantee
The right of claim against the guarantor, possessed by the
beneficiary by the bank guarantee, shall not be transferred to the other
person, unless otherwise stipulated in the guarantee.
Article 373. The Coming of the Bank Guarantee in Force
The bank guarantee shall come in force from the date of its issue,
unless otherwise stipulated in it.
Article 374. Presentation of the Claim by the Bank Guarantee
1. The beneficiary's claim for the payment of the sum of money by
the bank guarantee shall be presented to the guarantor in written form,
with the documents, indicated in the guarantee, enclosed to it. The
beneficiary shall point out, either in the claim itself or in the
enclosed documents, in what consists the principal's violation of the
principal obligation, to secure which the guarantee was issued.
2. The beneficiary's claim shall be presented to the guarantor
before the expiry of the term, defined in the guarantee, for which it has
been issued.
Article 375. The Guarantor's Obligations in Considering the
Beneficiary's Claim
1. On receiving the beneficiary's claim, the guarantor shall without
delay notify about it the principal and shall pass to him the copies of
the claim with all the related documents.
2. The guarantor shall be obliged to examine the beneficiary's claim
and the enclosed documents within a reasonable term, displaying a
reasonable solicitude in order to establish, whether or not the claim and
the enclosed documents correspond to the terms of the guarantee.
Article 376. The Guarantor's Refusal to Satisfy the Beneficiary's
Claim
1. The guarantor shall refuse to satisfy the beneficiary's claim, if
this claim or the documents enclosed to it do not correspond to the terms
of the guarantee or if they are presented to the guarantor after the
expiry of the term, fixed in the guarantee.
The guarantor shall be obliged to immediately notify the beneficiary
about the refusal to satisfy his claim.
2. If the guarantor has learned before the satisfaction of the
beneficiary's claim that the principal obligation, secured against by the
bank guarantee, has already been discharged in full or in the
corresponding part, that it has been terminated on the other grounds or
has been invalidated, he shall be obliged to immediately notify about
this the beneficiary and the principal.
The repeated beneficiary's claim, received by the guarantor after
such a notification, shall be liable to satisfaction by the guarantor.
Article 377. The Limits of the Guarantor's Obligation
1. The guarantor's obligation to the beneficiary, stipulated by the
bank guarantee, shall be limited by the payment of the sum of money, for
which the guarantee was issued.
2. The guarantor's responsibility to the beneficiary for his
non-discharge or improper discharge of the obligation by the guarantee
shall not be limited to the sum of money, for which the guarantee was
issued, unless otherwise stipulated in the guarantee.
Article 378. Termination of the Bank Guarantee
1. The guarantor's obligation to the beneficiary by the guarantee
shall be terminated:
1) by the payment to the beneficiary of the sum of money, for which
the guarantee was issued;
2) after the expiry of the term, fixed in the guarantee, for which
it was issued;
3) as a result of the beneficiary's renouncement of his rights by
the guarantee and his return of the guarantee to the guarantor;
4) as a result of the beneficiary's renouncement of his rights by
the guarantee by way of his handing in of a written application on
relieving the guarantor of his obligations.
The termination of the guarantor's obligation on the grounds,
pointed out in Subitems 1, 2 and 4 of the present Item, shall not depend
on whether or not the guarantee has been returned to him.
2. The guarantor, who has learned about the termination of the
guarantee, shall be obliged to immediately notify about it the principal.
Article 379. The Guarantor's Claims of Regress to the Principal
1. The guarantor's right to claim by way of regress that the
principal recompense the sums of money, paid to the beneficiary by the
bank guarantee, shall be defined by the agreement, concluded between the
guarantor and the principal, for the discharge of which the guarantee was
issued.
2. The guarantor shall not have the right to claim that the
principal return the sums of money, paid to the beneficiary other than in
correspondence with the terms of the guarantee, or for the violation of
the guarantor's obligation to the beneficiary, unless otherwise
stipulated by the agreement, concluded between the guarantor and the
principal.
§ 7. The Advance
Article 380. The Concept of the Advance. The Form of an Agreement on
the Advance
1. The advance shall be recognized as the sum of money, issued by
one of the contracting parties to offset the payments to the other party
due from it, as a proof that the contract has been concluded and that its
discharge has been secured against.
2. The agreement on the advance, regardless of the sum of money
involved, shall be effected in written form.
3. In case of the doubt about whether the sum of money, paid to
offset the payments, due from the party by the contract, is the advance,
in particular, as a result of the non-abidance by the rule, laid down by
Item 2 of the present Article, this sum of money shall be regarded as
paid up by way of an advance, unless proved otherwise.
Article 381. The Consequences of the Termination and of the
Non-Discharge of the Obligation, Secured Against by the
Advance
1. If the obligation is terminated before the start of its discharge
by an agreement between the parties or as a result of its discharge being
impossible (Article 416), the advance shall be returned.
2. If the responsibility for the non-performance of the contract
lies with the party, which has given the advance, it shall be left with
the other party. If the responsibility for the non-performance of the
contract lies with the party, which has received the advance, it shall be
obliged to pay to the other party the double amount of the advance.
In addition, the party, responsible for the non-execution of the
contract, shall be obliged to recompense to the other party the losses,
offsetting the amount of the advance, unless otherwise stipulated by the
contract.
Chapter 24. The Substitution of Persons in an Obligation
§ 1. The Transfer of the Creditor's Rights to Another Person
Article 382. The Grounds and the Order of the Transfer of the
Creditor's Rights to Another Person
1. The right (the claim), belonging to the creditor on the grounds
of an obligation, may be transferred by him to another person by the deal
(the cession of the claim), or may pass to another person on the legal
grounds.
The rules on the transfer of the creditor's rights to another person
shall not be applied to the claims of regress.
2. To effect the transfer to another person, the consent of the
debtor shall not be required, unless otherwise stipulated by the law or
by the contract.
3. If the debtor has not been notified in written form on the
effected transfer of the creditor's rights to another person, the new
creditor shall bear the risk of the unfavourable consequences, which may
arise for him as a result of this. In this case, the discharge of the
obligation to the primary creditor shall be recognized as the discharge
to the proper creditor.
Article 383. The Rights, Which May not Be Passed to the Other Persons
The transfer to the other person of the rights, inseparably linked
with the creditor's personality, in particular, with the claims for the
alimony and for the compensation of the harm, caused to the life or to
the health, shall not be admitted.
Article 384. The Scope of the Creditor's Rights, Transferred to the
Other Person
Unless otherwise stipulated by the law or by the contract, the right
of the primary creditor shall be passed to the new creditor in the volume
and on the terms, which have existed by the moment of the transfer of the
right. In particular, to the new creditor shall pass the rights,
guaranteeing the discharge of the obligations, and also the other rights,
involved in the claim, including the right to the unpaid interest.
Article 385. The Proofs of the Rights of the New Creditor
1. The debtor shall have the right not to discharge the obligation
to the new creditor, until the proofs of the transfer of the claim to
this person have been presented to him.
2. The creditor, who has ceded the claim to the other person, shall
be obliged to pass to him the documents, certifying the right of the
claim, and to supply to him the information, which is important for the
discharge of the claim.
Article 386. The Debtor's Objections to the New Creditor's Claim
The debtor shall have the right to put forward objections against
the new creditor's claims, which he has had to the primary creditor by
the moment of receiving the notification about the transfer of the rights
by the obligation to the new creditor.
Article 387. The Transfer of the Creditor's Rights to the Other
Person on the Grounds of the Law
The creditor's rights by the obligation shall pass to the other
person on the grounds of the law and of the occurrence of the
circumstances, pointed out in it:
- as a consequence of the universal legal succession in the
creditor's rights;
- by the court decision on the transfer of the creditor's rights to
the other person, when the possibility of such transfer is stipulated by
the law;
- as a consequence of the discharge of the debtor's obligation by
his surety or by the pledger, who is not the debtor by this obligation;
- in the subrogation to the insurer of the creditor's rights with
respect to the debtor, responsible for the occurrence of the insurance
case;
- in the other law-stipulated cases.
Article 388. The Terms for Ceding the Claim
1. The creditor's ceding of the claim to the other person shall be
admitted, unless it contradicts the law, the other legal acts or the
contract.
2. The cession of the claim by the obligation, in which the
creditor's personality is of essential importance for the debtor, shall
not be admitted without the debtor's consent.
Article 389. The Form of Ceding the Claim
1. The cession of the claim, based on the deal, performed in the
simple written or in the notarial form, shall be effected in the
corresponding written form.
2. The cession of the claim by the deal, requiring the state
registration, shall be registered in conformity with the order,
established for the registration of this deal, unless otherwise
established by the law.
3. The cession of the claim by the order security shall be effected
by way of making an endorsement upon this security (Item 3 of Article
146).
Article 390. Responsibility of the Creditor, Who Has Ceded the Claim
The primary creditor, who has ceded the claim, shall be answerable
to the new creditor for the invalidity of the claim, transferred to the
latter, but shall not be answerable for the non-satisfaction of this
claim by the debtor, with the exception of the cases, when the primary
creditor has assumed upon himself the surety for the debtor to the new
creditor.
§ 2. The Transfer of the Debt
Article 391. The Terms and the Form of the Transfer of the Debt
1. The transfer by the debtor of his debt to the other person shall
be admitted only with the creditor's consent.
2. To the form of the transfer of the debt shall be correspondingly
applied the rules, contained in Items 1 and 2, Article 389 of the present
Code.
Article 392. Objections of the New Debtor Against the Creditor's
Claim
The new debtor shall have the right to put forward objections
against the creditor's claims, based on the relationships between the
creditor and the primary debtor.
Chapter 25. Responsibility for the Violation of Obligations
Article 393. The Debtor's Obligation to Recompense the Losses
1. The debtor shall be obliged to recompense to the creditor the
losses, caused to him by the non-discharge or by an improper discharge of
the obligations.
2. The losses shall be defined in conformity with the rules,
stipulated by Article 15 of the present Code.
3. Unless otherwise stipulated by the law, by the other legal acts
or by the agreement, when defining the losses, the prices shall be taken
into account, which existed in the place, where the obligation should
have been discharged, on the date of the debtor's voluntary satisfaction
of the creditor's claims, and if the claim has not been voluntarily
satisfied - on the date of its presentation. Proceeding from the
circumstances, the court may satisfy the claim for the compensation of
the losses, taking into account the prices, which existed on the day of
its adopting the decision.
4. When defining the lost profit, the measures, taken by the
creditor to derive it, and the preparations, made for the same purpose,
shall be considered.
Article 394. The Losses and the Forfeit
1. If for the non-discharge or an improper discharge of the
obligation the forfeit has been ruled, the losses shall be recompensed in
the part, which has not been covered by the forfeit.
The law or the agreement may stipulate the cases: when only the
forfeit, but not the losses shall be exacted; when the losses may be
exacted in full above the forfeit; when, according to the creditor's
choice, either the forfeit or the losses may be exacted.
2. In the cases, when a limited responsibility for the non-discharge
or an improper discharge of the obligation has been established (Article
400), the losses, liable to compensation in the part, not covered by the
forfeit, or above it, or instead of it, may be exacted up to the limit,
fixed by such a restriction.
Article 395. Responsibility for the Non-Discharge of the Pecuniary
Obligation
1. For the use of the other person's money as a result of its
illegal retention, of the avoidance of its return or of another kind of
delay in its payment, or as a result of its ungroundless receipt or
saving at the expense of the other person, the interest on the total
amount of these means shall be due. The interest rate shall be defined by
the discount rate of the bank interest, existing by the date of the
discharge of the pecuniary obligation or of the corresponding part
thereof at the place of the creditor's residence, and if the creditor is
a legal entity - at the place of its location. If the debt is exacted
through the court, the court may satisfy the creditor's claim, proceeding
from the discount rate of the bank interest on the date of filing the
claim or on the date of its adopting the decision. These rules shall be
applied, unless the other interest rate has been fixed by the law or by
the agreement.
2. If the losses, caused to the creditor by an illegal use of his
money, exceed the amount of the interest, due to him on the ground of
Item 1 of the present Article, he shall have the right to claim that the
debtor recompense him the losses in the part, exceeding this amount.
3. The interest for the use of the other person's means shall be
exacted by the date of payment of the amount of these means to the
creditor, unless the law, the other legal acts or the contract have fixed
a shorter term for the calculation of the interest.
Article 396. Responsibility and the Discharge of Obligations in Kind
1. The payment of the forfeit and the compensation of the losses in
case of an improper discharge of the obligation shall not absolve the
debtor from the discharge of the obligations in kind, unless otherwise
stipulated by the law or by the contract.
2. The compensation of the losses in case of the non-discharge of
the obligation and the payment of the forfeit for its non-discharge shall
absolve the debtor from the discharge of the obligation in kind, unless
otherwise stipulated by the law or by the contract.
3. The creditor's refusal to accept the discharge, which as a
consequence of the delay has lost all interest for him (Item 2 of Article
405), and also the payment of the forfeit, imposed by way of compensation
(Article 409), shall absolve the debtor from the discharge of the
obligation in kind.
Article 397. Discharge of the Obligation at the Debtor's Expense
In case of the non-discharge by the debtor of the obligation to
manufacture and transfer the thing into the ownership, into the economic
or into the operation management, or into the use of the creditor, or to
perform for him a certain job, or to render him a service, the creditor
shall have the right, within a reasonable term and for a reasonable pay,
to commission the third persons with the performance of the obligation,
or to perform it through his own effort, unless otherwise following from
the law, the other legal acts or the contract, or from the substance of
the obligation, and to claim that the debtor recompense the necessary
expenses and the other losses he has borne.
Article 398. The Consequences of the Non-discharge of the Obligation
to Transfer an Individually-definite Thing
In case of the non-discharge of the obligation to transfer an
individually-definite thing into the ownership, into the economic or the
operation management, or into the gratuitous use of the creditor, the
latter shall have the right to claim the forcible withdrawal of this
thing from the debtor and its transfer to the creditor on the terms,
stipulated by the obligation. This right shall cease to exist, if the
thing has already been transferred to the third person, possessing the
right of ownership, of economic or of operation management. If the thing
has not yet been transferred, the right of priority shall belong to that
creditor, with respect to whom the obligation has arisen at an earlier
date, and if this is impossible to establish - to that creditor, who has
filed the claim at an earlier date.
Instead of the claim for the transfer to him of the thing, which is
the object of the obligation, the creditor shall have the right to claim
the compensation of his losses.
Article 399. The Subsidiary Liability
1. Before presenting the claims against the person, who, in
conformity with the law, with the other legal acts or with the terms of
the obligation, is bearing liability in addition to the liability of the
other person, who is the principal debtor (the subsidiary liability), the
creditor shall be obliged to present the claim against the principal
debtor.
If the principal debtor has refused to satisfy the claim of the
creditor, or if the creditor has not received from him, within a
reasonable term, a response to the presented claim, this claim may be
presented against the person, bearing the subsidiary liability.
2. The creditor shall have no right to claim the satisfaction of his
claim against the principal debtor from the person, bearing the
subsidiary liability, if this claim may be satisfied by offsetting the
claim of regress to the principal debtor, or by an indisputable recovery
of the means involved from the principal debtor.
3. The person, bearing the subsidiary liability, shall be obliged,
before satisfying the claim, presented against him by the creditor, to
warn about it the principal debtor, and if the claim has been filed
against such a person - to draw the principal debtor into the court case.
Otherwise, the principal debtor shall have the right to put forward
against the claim of regress of the person, bearing the subsidiary
liability, the objections, which he has had against the creditor.
Article 400. Limitation of the Scope of Liability by Obligations
1. By the individual kinds of obligations and by those obligations,
which are related to a definite type of activity, the right to the full
compensation of the losses may be limited by the law (the limited
responsibility).
2. The agreement on limiting the scope of the debtor's
responsibility by the contract of affiliation or by another kind of
contract, in which the creditor is the citizen, coming out in the
capacity of the consumer, shall be insignificant, if the scope of
responsibility for the given kind of obligations or for the given
violation has been defined by the law and if the agreement has been
concluded before the setting in of the circumstances, entailing the
responsibility for the non-discharge or for an improper discharge of the
obligation.
Article 401. The Grounds of Responsibility for the Violation of the
Obligation
1. The person, who has not discharged the obligation or who has
discharged it in an improper way, shall bear responsibility for this, if
it has happened through his fault (an ill intention or carelessness on
his part), with the exception of the cases, when the other grounds of the
responsibility have been stipulated by the law or by the contract.
The person shall be recognized as not guilty, if, taking into
account the extent of the care and caution, which has been expected from
him in the face of the nature and the terms of the circulation, he has
taken all the necessary measures for properly discharging the obligation.
2. The absence of the guilt shall be proven by the person, who has
violated the obligation.
3. Unless otherwise stipulated by the law or by the contract, the
person, who has failed to discharge, or has discharged in an improper
way, the obligation, while performing the business activity, shall bear
responsibility, unless he proves that the proper discharge has been
impossible because of a force-majeure, i.e., because of the extraordinary
circumstances, which it was impossible to avert under the given
conditions. To such kind of circumstances shall not be referred, in
particular, the violations of obligations on the part of the debtor's
counter-agents, or the absence on the market of commodities,
indispensable for the discharge, or the absence of the necessary means at
the debtor's disposal.
4. An agreement on eliminating or limiting the liability for an
intentional violation of the obligation, concluded at an earlier date,
shall be insignificant.
Article 402. The Debtor's Responsibility for His Employees
The actions of the debtor's employees, involved in the discharge of
his obligation, shall be regarded as those of the debtor himself. The
debtor shall be answerable for these actions, if they have caused the
non-discharge or an improper discharge of the obligation.
Article 403. The Debtor's Responsibility for the Actions of the
Third Persons
The debtor shall be answerable for an improper discharge of the
obligation by the third persons, on whom the discharge of the obligation
has been imposed, unless it has been laid down by the law that the
responsibility shall be borne by the third person, who has been an
immediate discharger.
Article 404. The Creditor's Guilt
1. If the non-discharge or an improper discharge of the obligation
has occurred through the fault of both parties, the court shall
correspondingly reduce the scope of the debtor's responsibility. The
court shall also have the right to reduce the scope of the debtor's
responsibility, if the creditor has intentionally or through carelessness
contributed to the increase of the losses, caused by the non-discharge or
by an improper discharge, or if he has not taken reasonable measures to
reduce them.
2. The rules of Item 1 of the present Article shall also be
correspondingly applied in the cases, when the debtor, by force of the
law or of the contract, bears responsibility for the non-discharge or for
an improper discharge of the obligation regardless of whether he is, or
is not, at fault.
Article 405. The Debtor's Delay
1. The debtor, who has failed to discharge the obligation on time,
shall be answerable to the creditor for the losses, inflicted by the
delay, and also for the consequences of the discharge having accidentally
become impossible during the period of the delay.
2. If, because of the debtor's delay, the discharge has lost all
interest for the creditor, he shall have the right to refuse to accept
the discharge and to claim the compensation of the involved losses.
3. The debtor shall not be regarded as guilty of the delay during
the period of time, when the obligation could not have been discharged
because of the creditor's delay.
Article 406. The Creditor's Delay
1. The creditor shall be regarded as guilty of the delay, if he has
refused to accept the proper discharge, offered to him by the debtor, or
if he has not performed the actions, stipulated by the law, by the other
legal acts, or by the contract, or those stemming from the customs of the
business turnover or from the substance of the obligation, before the
performance of which the debtor could not have discharged his obligation.
The creditor shall also be regarded as guilty of the delay in the
cases, pointed out in Item 2 of Article 408 of the present Code.
2. The creditor's delay shall give to the debtor the right to the
compensation of losses, caused to him by the said delay, unless the
creditor proves that the delay has occurred through the circumstances,
for which neither he himself, nor the persons, to whom, by force of the
law, of the other legal acts or of the creditor's commission, the
acceptance of the discharge has been entrusted, are answerable.
3. The debtor shall not be obliged to pay the interest by the
pecuniary obligation over the period of the creditor's delay.
Chapter 26. The Termination of Obligations
Article 407. The Grounds for the Termination of Obligations
1. The obligation shall be terminated in full or in part on the
grounds, stipulated by the present Code, by the other laws and the other
legal acts, or by the contract.
2. The termination of the obligation upon the claim of one of the
parties shall be admitted only in the cases, stipulated by the law or by
the contract.
Article 408. The Termination of the Obligation by the Discharge
1. The proper discharge shall terminate the obligation.
2. While accepting the discharge, the creditor shall be obliged,
upon the debtor's claim, to give him a receipt for accepting the
discharge in full or in the corresponding part thereof.
If the debtor has issued to the creditor a promissory document to
certify the obligation, the creditor, while accepting the discharge,
shall be obliged to return it, and in case it is impossible to return the
said document, he shall be obliged to indicate this in the receipt he
issues. The receipt may be replaced by an inscription made on the
returned document. The debtor's custody of the promissory document shall
certify the termination of the obligation, unless otherwise proved.
If the creditor refuses to issue the receipt, to return to the
debtor the promissory document, or to indicate in the receipt that it is
impossible to return it, the debtor shall have the right to delay the
discharge. In these cases, the creditor shall be regarded as having
delayed it.
Article 409. The Indemnity
By an agreement between the parties, the obligation may be
terminated by way of paying an indemnity instead of the discharge (the
payment of money, the transfer of the property, etc.). The amount, the
term and the procedure for paying the indemnity shall be established by
the parties.
Article 410. Termination of the Obligation by an Offset
The obligation shall be terminated in full or in part by offsetting
a similar claim of regress, whose deadline has arrived or has not been
fixed, or has been defined by the moment of the demand. For the offset,
the application from one of the parties shall be sufficient.
Article 411. The Cases of the Offset Being Inadmissible
Inadmissible shall be the offset of the claims:
- if, by the application of the other party, the term of the
limitation of actions shall be applicable to the given claim, and the
said term has expired;
- for the compensation of the harm, inflicted to the life or to the
health;
- on the exaction of the alimony;
- for the life maintenance;
- in the other cases, stipulated by the law or by the contract.
Article 412. The Offset in the Cession of the Claim
In case of the cession of the claim, the debtor shall have the right
to offset against the claim of the new creditor his own claim of regress
against the primary creditor.
The offset shall be effected, if the claim has arisen on the
grounds, which have existed by the moment of the debtor's receipt of the
notification about the cession of the claim, and if the deadline of the
claim has set in before its receipt or if this deadline has not been
indicated or defined by the moment of the demand.
Article 413. Termination of the Obligation by the Debtor and the
Creditor Coinciding in One Person
The obligation shall be terminated in case the debtor and the
creditor coincide in a single person.
Article 414. Termination of the Obligation by the Novation
1. The obligation shall be terminated by an agreement between the
parties on replacing the primary obligation, which has existed between
them, with another obligation between the same persons, stipulating a
different object or a different way of the discharge (the novation).
2. The novation shall not be admissible with respect to the
obligations on the compensation for the harm, inflicted to the life or to
the health, and also with respect to those on the alimony.
3. The novation shall terminate the additional liabilities,
connected with the primary obligation, unless otherwise stipulated by the
agreement between the parties.
Article 415. Forgiving the Debt
The obligation shall be terminated by the creditor's absolving the
debtor from the obligations, borne by him, if this does not violate the
rights of the other persons with respect to the creditor's property.
Article 416. Termination of the Obligation Because of the
Impossibility to Discharge It
1. The obligation shall be terminated because of the impossibility
to discharge it, caused by the circumstance, for which neither of the
parties is answerable.
2. In case of the impossibility for the debtor to discharge the
obligation because of the faulty actions of the creditor, the latter
shall not have the right to claim the return of what he has discharged by
the obligation.
Article 417. Termination of the Obligation on the Grounds of an Act,
Issued by the State Body
1. If as a result of an act, issued by the state body, the discharge
of the obligation has become impossible in full or in part, the
obligation shall be terminated in full or in the corresponding part. The
parties, which have suffered losses as a result of this, shall have the
right to claim their compensation in conformity with Articles 13 and 16
of the present Code.
2. In case the act, issued by the state body, on whose grounds the
obligation has been terminated, is recognized as invalid in conformity
with the established procedure, the obligation shall be restored, unless
otherwise following from the agreement between the parties or from the
substance of the obligation and unless its discharge has lost all
interest for the creditor.
Article 418. Termination of the Obligation with the Citizen's Death
1. The obligation shall be terminated with the death of the debtor,
if it cannot be discharged without the debtor's personal participation,
or if it is indissolubly linked with the debtor's personality in any
other way.
2. The obligation shall be terminated with the death of the
creditor, if its discharge is intended personally for the creditor, or if
the obligation is indissolubly linked with the creditor's personality in
any other way.
Article 419. Termination of the Obligation with the Liquidation of
the Legal Entity
The obligation shall be terminated with the liquidation of the legal
entity (the debtor or the creditor), with the exception of the cases,
when the law or the other legal acts impose the discharge of the
obligation of the liquidated legal entity upon the other person (by the
claims for the compensation of the harm, caused to the life or to the
health, etc.).
Subsection 2. The General Provisions on the Contract
Chapter 27. The Concept and the Terms of the Contract
Article 420. The Concept of the Contract
1. The contract shall be recognized as the agreement, concluded by
two or by several persons on the institution, modification or termination
of the civil rights and duties.
2. Toward the contracts shall be applied the rules on bilateral and
multilateral deals, stipulated by Chapter 9 of the present Code.
3. Toward the obligations, arising from the contract, shall be
applied the general provisions on obligations (Articles 307-419), unless
otherwise stipulated by the rules of the present Chapter and the rules on
the individual kinds of contracts, contained in the present Code.
4. Toward the contracts, concluded by more than two parties, the
general provisions on the contract shall be applied, unless this
contradicts the multilateral nature of such contracts.
Article 421. The Freedom of the Contract
1. The citizens and the legal entities shall be free to conclude
contracts.
Compulsion to conclude contracts shall be inadmissible, with the
exception of the cases, when the duty to conclude the contract has been
stipulated by the present Code, by the law or by a voluntarily assumed
obligation.
2. The parties shall have the right to conclude a contract, both
stipulated and unstipulated by the law or by the other legal acts.
3. The parties shall have the right to conclude a contract, in which
are contained the elements of different contracts, stipulated by the law
or by the other legal acts (the mixed contract). Toward the relationships
between the parties in the mixed contract shall be applied in the
corresponding parts the rules on the contracts, whose elements are
contained in the mixed contract, unless otherwise following from the
agreement between the parties or from the substance of the mixed
contract.
4. The contract terms (provisions) shall be defined at the
discretion of the parties, with the exception of the cases, when the
content of the corresponding term (provision) has been stipulated by the
law or by the other legal acts (Article 422).
In the cases, when the contract provision has been stipulated by the
norm, applied so far as it has not been otherwise stipulated by the
agreement between the parties (the dispositive norm), the parties may by
their own agreement exclude its application, or may introduce the
provision, distinct from that, which has been stipulated by it. In the
absence of such an agreement, the contract provision shall be defined by
the dispositive norm.
5. Unless the contract provision has been defined by the parties or
by the dispositive norm, the corresponding provisions shall be defined by
the customs of the business turnover, applicable to the relationships
between the parties.
Article 422. The Contract and the Law
1. The contract shall be obliged to correspond to the rules,
obligatory for the parties, which have been laid down by the law and by
the other legal acts (the imperative norms), operating at the moment of
its conclusion.
2. If after the conclusion of the contract the law has been passed,
laying down the rules, obligatory for the parties, which differ from
those in operation when the contract was concluded, the provisions of the
concluded contract shall stay in force, with the exception of the cases,
when the law decrees that its action shall be extended to the
relationships that have arisen from the contracts, concluded at an
earlier date.
Article 423. The Pecuniary and the Gratuitous Contracts
1. The contract, by which the party shall receive a pay or a
different kind of the regress remuneration for the discharge of its
duties, shall be a pecuniary one.
2. The contract shall be recognized as gratuitous, if by it one
party assumes an obligation to provide something to the other party
without receiving from it a pay or another kind of the regress
remuneration.
3. The contract shall be supposed to be a pecuniary one, unless
otherwise following from the law, from the other legal acts, or from the
content or the substance of the contract.
Article 424. The Price
1. The performance of the contract shall be paid by the price, fixed
by an agreement between the parties.
In the law-stipulated cases, the prices (the tariffs, estimates,
rates, etc.) shall be applied, fixed or regulated by the specially
authorized state bodies.
2. Change in price after the conclusion of the contract shall be
admitted in cases and on the terms, provided for by the contract, law, or
in the procedure established by law.
3. In the cases, when the price in the pecuniary contract has not
been stipulated and cannot be defined proceeding from the contract terms,
the performance of the contract shall be remunerated by the price, which
is usually paid under the comparable circumstances for the similar kind
of commodities, works or services.
Article 425. The Operation of the Contract
1. The contract shall come in force and shall become obligatory for
the parties from the moment of its conclusion.
2. The parties shall have the right to establish that the terms
(provisions) of the contract, concluded by them, shall be applied to
their relations, which have arisen before the conclusion of the contract.
3. The law or the contract may stipulate that the end of the term of
operation of the contract entails the termination of the parties'
obligations by the contract.
The contract, in which such a term is absent, shall be recognized as
operating until the moment, when the parties complete the performance of
the obligation, defined in it.
4. The expiry of the term of operation of the contract shall not
absolve the parties from the responsibility for its violation.
Article 426. The Public Contract
1. The public contract shall be recognized as a contract, concluded
by a commercial organization and establishing its duties by the sale of
commodities, by the performance of works and by rendering services, which
such an organization shall effect in conformity with the nature of its
activity with respect to anybody, who turns to it (in the sphere of the
retail trade, the passenger traffic in the public transport vehicles, the
communications services, the supply of electric energy, the medical
services, the hotel accommodation, etc.).
The commercial organization shall have no right to show preference
to some persons as compared with the others as concerns the conclusion of
a public contract, with the exception of the cases, stipulated by the law
and by the other legal acts.
2. The price of commodities, works and services, as well as the
other terms of the public contract shall be equal for all the consumers,
with the exception of the cases, when the law and the other legal acts
admit the granting of privileges for the individual consumer categories.
3. Refusal on the part of the commercial organization to conclude a
public contract, if it can provide to the consumer the corresponding
commodities and services and to perform for him the corresponding works,
shall not be admitted.
If the commercial organization ungroundlessly avoids the conclusion
of a public contract, the provisions, stipulated by Item 4 of Article 445
of the present Code, shall be applied.
4. In the law-stipulated cases, the Government of the Russian
Federation may issue the rules, obligatory for the parties in concluding
and performing public contracts (the standard contracts, the provisions,
etc.).
5. The terms of the public contract, not corresponding to the
requirements, laid down in Items 2 and 4 of the present Article, shall be
insignificant.
Article 427. The Model Contract Rules
1. It may be stipulated in the contract that its individual terms
are defined by the model terms, elaborated for the corresponding type of
the contracts and published in the press.
2. In the case, when the contract contains no reference to the model
terms, such model terms shall be applied toward the relationships between
the parties as the customs of the business turnover, if they comply with
the requirements, laid down by Article 5 and by Item 5, Article 421 of
the present Code.
3. The model terms may be exposed in the form of a model contract or
of another document, containing these terms.
Article 428. The Contract of Affiliation
1. The contract of affiliation shall be recognized as the contract,
whose terms have been defined by one of the parties in the official lists
or in the other standard forms and could have been accepted by the other
party only by way of its joining the offered contract as a whole.
2. The party, which has joined the contract, shall have the right to
demand that the contract be dissolved or amended, if the contract of
affiliation, while not contradicting the law and the other legal acts,
deprives this party of the rights, which are usually granted by the
contracts of the given kind, if it excludes or limits the responsibility
of the other party for the violation of the obligations or contains the
other terms, clearly onerous for the affiliated party, which it would
have rejected, proceeding from its own reasonably interpreted interests,
could it have taken part in defining the contract terms.
3. In the face of the circumstances, stipulated in Item 2 of the
present Article, the demand about the dissolution or the amendment of the
contract, put forward by the party, which has joined the contract in
connection with the performance of its business activity, shall not be
liable to satisfaction, if the affiliated party has known, or should have
known, on what terms it was concluding the contract.
Article 429. The Preliminary Contract
1. By the preliminary contract, the parties shall assume an
obligation to conclude in the future a contract on the transfer of the
property, on the performance of works or on rendering services (the basic
contract) on the terms, stipulated by the preliminary contract.
2. The preliminary contract shall be concluded in the form,
established for the basic contract, and if the form of the basic contract
has not been established, in written form. The non-observance of the
rules on the form of the preliminary contract shall entail its
insignificance.
3. The preliminary contract shall contain the terms, making it
possible to identify the object, and also the other essential terms of
the basic contract.
4. In the preliminary contract shall be pointed out the term, within
which the parties are obliged to conclude the basic contract.
If such term has not been defined in the preliminary contract, the
basic contract shall be subject to conclusion in the course of one year
from the moment of concluding the preliminary contract.
5. In the cases, when the party, which has concluded the preliminary
contract, is avoiding the conclusion of the basic contract, shall be
applied the provisions, stipulated by Item 4, Article 445 of the present
Code.
6. The obligations, stipulated by the preliminary contract, shall be
terminated, if before the expiry of the term, within which the parties
have been obliged to conclude the basic contract, it is not concluded, or
if one of the parties does not forward to the other party an offer to
conclude this contract.
Article 430. The Contract in Favour of the Third Person
1. The contract in favour of the third person shall be recognized as
a contract, in which the parties have laid down that the debtor shall be
obliged to discharge the obligation not to the creditor, but to the third
person, who is, or is not mentioned in the contract and who shall have
the right to claim from the debtor that he discharge the obligation in
his favour.
2. Unless otherwise stipulated by the law, by the other legal acts
or by the contract, from the moment of the third person expressing to the
debtor his intention to avail himself of his right by the contract, the
parties shall not have the right to dissolve or to amend the contract,
concluded by them, without the consent of the third person.
3. The debtor by the contract shall have the right to put forward
the objections against the claims of the third person, which he could
have put forward against the creditor.
4. In the case, when the third person has renounced the right,
granted to him by the contract, the creditor may avail himself of this
right, unless this contradicts the law, the other legal acts or the
contract.
Article 431. The Interpretation of the Contract
While interpreting the terms of the contract, the court shall take
into account the literal meaning of the words and expressions, contained
in it. The literal meaning of the terms of the contract in case of its
being vague shall be identified by way of comparison with the other terms
and with the meaning of the contract as a whole.
If the rules, contained in the first part of the present Article, do
not make it possible to identify the content of the contract, the actual
common will of the parties shall be found out with account for the
purpose of the contract. All the corresponding circumstances, including
the negotiations and the correspondence, preceding the conclusion of the
contract, the habitual practices in the relationships between the
parties, the customs of the business turnover and the subsequent
behaviour of the parties shall be taken into account.
Chapter 28. The Conclusion of the Contract
Article 432. The Basic Provisions on the Conclusion of a Contract
1. The contract shall be regarded as concluded, if an agreement has
been achieved between the parties on all its essential terms, in the form
proper for the similar kind of contracts.
As essential shall be recognized the terms, dealing with the object
of the contract, the terms, defined as essential or indispensable for the
given kind of contracts in the law or in the other legal acts, and also
all the terms, about which, by the statement of one of the parties, an
accord shall be reached.
2. The contract shall be concluded by way of forwarding the offer
(the proposal to conclude the contract) by one of the parties and of its
acceptance (the acceptance of the offer) by the other party.
Article 433. The Moment of the Conclusion of the Contract
1. The contract shall be recognized as concluded at the moment, when
the person, who has forwarded the offer, has obtained its acceptance.
2. 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 224).
3. The contract, subject to the state registration, shall be
regarded as concluded from the moment of its registration, unless
otherwise stipulated by the law.
Article 434. The Form of the Contract
1. The contract may be concluded in any form, stipulated for making
the deals, unless the law stipulates a definite form for the given kind
of contracts.
If the parties have agreed to conclude the contract in a definite
form, it shall be regarded as concluded after the agreed form has been
rendered to it, even if the law does not require such form for the given
kind of contracts.
2. The contract in written form shall be concluded by compiling one
document, signed by the parties, and also by way of exchanging the
documents by mail, telegraph, teletype, telephone, by the electronic or
any other type of the means of communication, which makes it possible to
establish for certain that the document comes from the party by the
contract.
3. The written form of the contract shall be regarded as observed,
if the written offer to conclude the contract has been accepted in
conformity with the order, stipulated by Item 3, Article 438 of the
present Code.
Article 435. The Offer
1. The offer shall be recognized as the proposal, addressed to one
or to several concrete persons, which is sufficiently comprehensive and
which expresses the intention of the person, who has made the proposal,
to regard himself as having concluded the contract with the addressee,
who will accept the proposal.
The offer shall contain the essential terms of the contract.
2. The offer shall commit the person, who has forwarded it, from the
moment of its receipt by the addressee.
If the notification about the recall of the offer comes in before,
or simultaneously with the offer, the offer shall be regarded as not
received.
Article 436. The Irrevocability of the Offer
The offer, received by the addressee, shall not be revoked in the
course of the term, fixed for its acceptance, unless otherwise stipulated
in the offer itself or follows from the substance of the proposal, or
from the setting, in which it has been made.
Article 437. The Invitation to Make the Offers. The Public Offer
1. The advertisements and the other proposals, addressed to an
indefinite circle of persons, shall be regarded as an invitation to make
the offers, unless directly pointed out otherwise in the proposal.
2. The proposal, containing all the essential terms of the contract,
in which is seen the will of the person, who is making the proposal, to
conclude the contract on the terms, indicated in the proposal, with any
responding person, shall be recognized as an offer (the public offer).
Article 438. The Acceptance
1. The acceptance shall be recognized as the response of the person,
to whom the offer has been addressed, about its being accepted.
The acceptance shall be full and unconditional.
2. The silence shall not be regarded as the acceptance, unless
otherwise following from the law, from the custom of the business
turnover, or from the former business relations between the parties.
3. The performance by the person, who has received an offer, of the
actions, involved in complying with the terms of the contract, pointed
out in the offer (the dispatch of commodities, the rendering of services,
the performance of works, the payment of the corresponding amount of
money, etc.), shall be regarded as the acceptance, unless otherwise
stipulated by the law or by the other legal acts, or pointed out in the
offer.
Article 439. Recall of the Offer
If the notification about the recall of the offer has come to the
person, who has forwarded the offer, before the acceptance or
simultaneously with it, the acceptance shall be regarded as not obtained.
Article 440. Conclusion of the Contract on the Ground of the Offer,
Fixing the Term of Acceptance
When the term of acceptance has been fixed in the offer, the
contract shall be regarded as concluded, if the acceptance has been
obtained by the person, who has forwarded the offer, within the term,
stipulated in it.
Article 441. Conclusion of the Contract on the Ground of the Offer,
Not Fixing the Term of Acceptance
1. When in the written offer no term of acceptance has been
stipulated, the contract shall be regarded as concluded, if the
acceptance has been obtained by the person, who has forwarded the offer,
before the expiry of the term, fixed by the law or by the other legal
acts, and if such term has not been fixed - in the course of the normally
required time.
2. When the offer has been made orally and no term of acceptance has
been indicated, the contract shall be regarded as concluded, if the other
party immediately declared its acceptance.
Article 442. The Acceptance, Obtained with a Delay
In the cases, when the duly forwarded notification about the
acceptance is received with a delay, the acceptance shall not be regarded
as belated, unless the party, which has forwarded the offer, immediately
notifies the other party about the arrival of the acceptance with a
delay.
If the party, which has forwarded the offer, immediately notifies
the other party about the obtaining of its acceptance, which has come in
with a delay, the contract shall be regarded as concluded.
Article 443. The Acceptance on the Other Terms
The answer, indicating the consent to conclude the contract on the
terms other than those indicated in the offer, shall not be regarded as
the acceptance.
Such an answer shall be recognized as the refusal of the acceptance
and at the same time as a new offer.
Article 444. The Place of the Conclusion of the Contract
If no place of its conclusion has been indicated in the contract, it
shall be recognized as concluded at the place of residence of the citizen
or at the place of location of the legal entity, who (which) has
forwarded the offer.
Article 445. The Obligatory Conclusion of the Contract
1. In the cases, when in conformity with the present Code or with
the other laws, the conclusion of the contract is obligatory for the
party, to which the offer (the draft contract) has been forwarded, this
party shall forward to the other party the notification about the
acceptance, or about the refusal of the acceptance, or about the
acceptance of the offer on different terms (the records on the
differences by the draft contract) within 30 days from the date, when the
offer was received.
The party, which has forwarded the offer and which has received from
the party, for which the conclusion of the contract is obligatory, the
notification about its acceptance on different terms (the records on the
differences by the draft contract), shall have the right to pass the
differences, which have arisen during the conclusion of the contract, for
consideration to the court within 30 days from the day of receiving such
a notification or from the day of the expiry of the term of acceptance.
2. In the cases, when in conformity with the present Code or with
the other legal acts, the conclusion of the contract is obligatory for
the party, which has forwarded the offer (the draft contract), and when
within 30 days the records on the differences by the draft contract are
forwarded to it, this party shall be obliged to notify the other party,
within 30 days from the receipt of the records on the differences, about
the acceptance of the contract in its own version, or about the rejection
of the records on the differences.
In the case of the records on the differences being rejected, or of
the non-receipt of the notification about the results of their
examination within the stipulated term, the party, which has forwarded
the records of the differences, shall have the right to pass the
differences that have arisen during the conclusion of the contract, for
consideration to the court.
3. The rules on the term, stipulated by Items 1 and 2 of the present
Article, shall be applied, unless the other term has been stipulated by
the law or by the other legal acts, or has been agreed upon between the
parties.
4. If the party, for which, in conformity with the present Code or
with the other laws, the conclusion of the contract is obligatory, avoids
its conclusion, the other party shall have the right to turn to the court
with a claim for compelling it to conclude the contract.
The party, groundlessly avoiding the conclusion of the contract,
shall be obliged to recompense to the other party the losses, thus
inflicted upon it.
Article 446. The Pre-Contract Disputes
In the cases, when the differences, arising during the conclusion of
the contract, are passed for consideration to the court on the ground of
Article 445 of the present Code or by an agreement between the parties,
the terms of the contract, by which the parties have displayed
differences, shall be defined in conformity with the court decision.
Article 447. Conclusion of the Contract by a Tender
1. The contract, unless otherwise following from its substance,
shall be concluded by way of holding a tender. In this case, the contract
shall be concluded with the person, who has won it.
2. In the capacity of the organizer of the tender shall come out the
owner of the thing, or the possessor of the right of ownership, or a
specialized organization. The latter shall act on the ground of the
contract with the owner of the thing or with the possessor of the right
of ownership, and shall come out on their behalf or on its own behalf.
3. In the cases, pointed out in the present Code or in the other
law, the contracts on the sale of the thing or of the right of ownership
may be concluded only by way of holding a sale.
4. The sale shall be held in the form of an auction or of a tender.
The winner of the bidding at an auction shall be recognized as the
person, who has offered the highest price, and at the tender - the
person, who, as has been concluded by the tender commission, appointed in
advance by the organizer of the tender, has offered the best terms.
The form of the bidding shall be defined by the owner of the thing
on sale or by the possessor of the realized right of ownership, unless
otherwise stipulated by the law.
5. The auction and the tender, in which only one customer has
participated, shall be recognized as having failed.
6. The rules, stipulated by Articles 448 and 449 of the present
Code, shall be applied to the public auctions, held by way of execution
of the court ruling, unless otherwise stipulated by the procedural
legislation.
Article 448. The Organization and the Order of Holding the Sales
1. The auctions and tenders shall be open and closed.
In an open auction and in an open tender anybody may take part. In a
closed auction and in a closed tender only the persons, specially invited
for this purpose, shall take part.
2. Unless otherwise stipulated by the law, the statement on the
holding of the sale shall be made by its organizer not later than 30 days
in advance. The statement shall in any case contain information on the
time, the place and the form of the sale, on its object and procedure,
including that involved in formalizing the participation in the sale, in
the way of determining the winner in the bidding, and shall also name the
starting price.
If the object of the bidding is only the right to conclude a
contract, the statement on the forthcoming auction shall contain the
indication of the term, granted for this.
3. Unless otherwise stipulated by the law or by the statement on the
holding of the sale, the organizer of an open auction, who has made the
statement, shall have the right to refuse to hold the auction at any
time, but not later than three days before the date of its holding, and
in the case of the tender - not later than 30 days before its holding.
In the cases, when the organizer of the open sale has refused to
hold it with the violation of the fixed term, he shall be obliged to
recompense to the participants the actual losses they have suffered.
The organizer of the closed auction or of a closed tender shall be
obliged to recompense to the invited participants their actual losses,
regardless of fact, on what particular date after forwarding to them the
notification the refusal to hold it followed.
4. The participants in the sale shall put in an advance in the
amount, within the term and in conformity with the order, which have been
pointed out in the notification about the holding of the sale. In case it
has not taken place, the advance shall be liable to return. The advance
shall also be returned to the persons, who, while having taken part in
the bidding, have not won it.
When concluding the contract with the person, who has won the
bidding, the amount of the advance put in by him shall be offset against
the discharge of obligations by the concluded contract.
5. The person, who has won the sale, and its organizer shall sign
the records on the results of the bidding, which shall possess the power
of a contract, on the day of the bidding. The winner of the sale shall
lose the advance, put in by him, in case he tries to avoid the signing of
the records. The organizer of the sale, who has avoided the signing of
the records, shall be obliged to return the advance in the double amount,
and also to recompense to the winner of the sale his losses, involved in
his taking part in the bidding, in the part, exceeding the amount of the
advance.
If the object of the sale has been only the right to conclude a
contract, such a contract shall be signed by the parties not later than
within 20 days, or within another term, pointed out in the notification,
after the end of the bidding and the formalization of the records. In
case of one of the parties avoiding the signing of the contract, the
other party shall have the right to file a claim with the court for a
compulsory conclusion of the contract, and also for the compensation of
the losses, caused by such an attempt to avoid its conclusion.
Article 449. The Consequences of Violation of the Rules for Holding
the Sale
1. The sale, held with the violation of the rules, laid down by the
law, may be recognized by the court as invalid upon the claim of the
interested persons.
2. The recognizing of the bidding to be invalid shall entail the
invalidity of the contract, concluded with the person, who has won it.
Chapter 29. The Amendment and the Cancellation of the Contract
Article 450. The Grounds for the Amendment and the Cancellation of
the Contract
1. The amendment and the cancellation of the contract shall be
possible only by an agreement between the parties, unless otherwise
stipulated by the present Code, by the other legal acts or by the
contract.
2. Upon the demand of one of the parties, the contract may be
amended or cancelled by the court decision only:
1) in case of an essential violation of the contract by the other
party;
2) in the other cases, stipulated by the present Code, by the other
legal acts or by the contract.
As an essential violation shall be recognized such violation of the
contract by one of the parties, which entails for the other party the
losses, to a considerable extent depriving it of what it could have
counted upon when concluding the contract.
3. In case of the unilateral refusal to discharge the contract in
full or in part, when such refusal is admitted by the law or by the
agreement between the parties, the contract shall be correspondingly
regarded as cancelled or as amended.
Article 451. The Amendment and the Cancellation of the Contract
Because of an Essential Change of Circumstances
1. An essential change of the circumstances, from which the parties
have proceeded when concluding the contract, shall be the ground for its
amendment or cancellation, unless otherwise stipulated by the contract or
following from its substance.
The change of the circumstances shall be recognized as essential, if
they have changed to such an extent that in case the parties could have
wisely envisaged it, the contract would not have been concluded by them
or would have been concluded on the essentially different terms.
2. If the parties have failed to reach an agreement on bringing the
contract into correspondence with the essentially changed circumstances
or on its cancellation, the contract may be cancelled, and on the
grounds, stipulated by Item 4 of the present Article, it may be amended
by the court upon the claim of the interested party in the face of the
simultaneous existence of the following conditions:
1) at the moment of concluding the contract, the parties have
proceeded from the fact that no such change of the circumstances will
take place;
2) the change of the circumstances has been called forth by the
causes, which the interested party could not overcome after they have
arisen, while displaying the degree of care and circumspection, which
have been expected from it by the nature of the contract and by the terms
of the circulation;
3) the execution of the contract without amending its provisions
would so much upset the balance of the property interests of the parties,
corresponding to the contract, and would entail such a loss for the
interested party that it would have been to a considerable extent
deprived of what it could have counted upon when concluding the contract;
4) neither from the customs of the business turnover, nor from the
substance of the contract does it follow that the risk, involved in the
change of the circumstances, shall be borne by the interested party.
3. In case of the cancellation of the contract because of the
essentially changed circumstances, the court shall, upon the claim of any
one of the parties, define the consequences of the cancellation of the
contract, proceeding from the need to justly distribute the expenses,
borne by them in connection with the execution of this contract, between
the parties.
4. The amendment of the contract in connection with an essential
change of the circumstances shall be admitted by the court decision in
extraordinary cases, when the cancellation of the contract contradicts
the public interests, or if it entails the losses for the parties,
considerably exceeding the expenses, necessary for the execution of the
contract on the terms, amended by the court.
Article 452. The Procedure for the Amendment and the Cancellation of
the Contract
1. The agreement on the amendment or on the cancellation of the
contract shall be legalized in the same form as the contract itself,
unless otherwise following from the law, from the other legal acts, from
the contract or from the customs of the business turnover.
2. The claim for the amendment or for the cancellation of the
contract may be filed by the party with the court only after it has
received the refusal from the other party in response to its proposal to
amend or to cancel the contract, or in case of its non-receipt of any
response within the term, indicated in the proposal or fixed by the law
or by the contract, and in the absence thereof - within a 30-day term.
Article 453. The Consequences of the Amendment and of the
Cancellation of the Contract
1. In case of the amendment of the contract, the parties'
obligations shall be preserved in the amended form.
2. In case of the cancellation of the contract, the parties'
obligations shall be terminated.
3. In case of the amendment or of the cancellation of the contract,
the obligations shall be regarded as amended or as terminated from the
moment of the parties' concluding an agreement on the amendment or on the
cancellation of the contract, unless otherwise following from the
agreement or from the nature of the contract's amendment, and in case of
the amendment or the cancellation of the contract by the court decision -
from the moment of the enforcement of the court ruling on the amendment
or on the cancellation of the contract.
4. The parties shall have no right to claim the return of what has
been discharged by them by their obligations up to the moment of the
amendment or the cancellation of the contract, unless otherwise
stipulated by the law or by the agreement between the parties.
5. If an essential violation of the contract by one of the parties
has served as the ground for the amendment or for the cancellation of the
contract, the other party shall have the right to claim the compensation
of the losses, inflicted upon it by the amendment or by the cancellation
of the contract.
Part Two
Section IV. Particular Kinds of Obligations
Chapter 30. Purchase and Sale
§ 1. General Provisions on Purchase and Sale
Article 454. Contract of Sale
1. 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.
2. Provisions stipulated by this paragraph shall be applied to the
purchase and sale of securities and currency values unless the law
establishes special rules for their purchase and sale.
3. In cases provided for by this Code or any other law the specific
aspects of purchase and sale of particular goods shall be determined by
laws and other legal acts.
4. Provisions stipulated by this paragraph shall be applicable to
the sale of property rights, unless the contrary follows from the content
or nature of these rights.
5. Provisions specified by this paragraph shall be applicable to
particular kinds of the contract of sale (retail sale, delivery of goods,
delivery of goods for state needs, contracting, power supply, sale of
real estate, sale of an enterprise), unless the contrary is provided for
by the rules of this Code for these kinds of contracts.
Article 455. The Condition of the Contract about Goods
1. Any things may be goods under the contract of sale due to the
observance of the rules envisaged by Article 129 of this Code.
2. A contract may be concluded for the sale of goods to be on hand
by the seller at the time of its conclusion, and also of goods which will
be created or acquired by the seller in the future, unless otherwise
stipulated by law or follows from the nature of goods.
3. The condition of the contract of sale shall be deemed to be
agreed upon, if the contract makes it possible to determine the name and
quantity of goods.
Article 456. The Duties of the Seller for the Transfer of Goods
1. The seller shall be obliged to transfer to the buyer goods
provided for by the contract of sale.
2. Unless otherwise stipulated by the contract of sale, the seller
shall be obliged to transfer together with the thing its accessories, and
also documents related to it (technical certificate, quality certificate,
operations instructions, etc.), envisaged by law, other legal acts or
contracts.
Article 457. The Term of the Execution of the Duty to Transfer Goods
1. The term of the execution of the seller's duty to turn over goods
to the buyer shall be determined by the contract of sale, and if the
contract does not allow to determine this term, the term of the execution
of this duty of the seller shall be determined by the rules stipulated by
Article 314 of this Code.
2. The contract of sale shall be deemed to be concluded with the
proviso of its performance by the strictly fixed date, if it follows
succinctly from the contract that in case of breaking the term of its
execution the buyer loses his interest in the contract.
The seller shall have the right to perform such contract before the
onset or after the expiry of the term fixed by it only with the buyer's
consent.
Article 458. The Time of the Discharge of the Seller's Duty to Hand
over Goods
1. Unless otherwise stipulated by the contract of sale, the duty of
the seller to hand over goods to the buyer shall be deemed to be
exercised at the time of:
the delivery of goods to the buyer or the person indicated by him,
if the contract provides for the seller's duty to deliver goods;
the placement of goods at the disposal of the buyer, if goods should
be passed to the buyer or the person indicated by him in the place of
location of goods. Goods shall be deemed to be placed at the buyer's
disposal, when by the time specified by the contract goods are ready for
the transfer in the proper place and the buyer is aware of the readiness
of goods for such transfer in accordance with the contract's conditions.
Goods shall not be deemed to be ready for transfer, if they have not been
identified for the contract's purposes by marking or in any other way.
2. In cases when the contract of sale does not imply the seller's
duty to deliver goods or turn them over to the buyer at the place of
their location, the duty of the seller to turn them over the buyer shall
be deemed to be performed at the time of handing over goods to the
carrier or the communication organization for the delivery to the buyer,
unless otherwise stipulated by the contract.
Article 459. The Transfer of the Risk of Accidental Destruction of
Goods
1. Unless otherwise stipulated by the contract of sale, the risk of
accidental destruction of goods or accidental damage of goods shall be
transferred to the buyer since the time when in keeping with law or the
contract the seller is deemed to have performed his duty of handing over
goods to the buyer.
2. The risk of accidental destruction of, or accidental damage to,
goods sold when they are in transit shall be transferred to the buyer
since the time of concluding the contract of sale, unless otherwise
stipulated by such contract or the customs of business turnover.
The condition of the contract to the effect that the risk of
accidental destruction of, or accidental damage to, goods is transferred
to the buyer since the time of the delivery of goods to the first carrier
may be recognized by a court of law as invalid on the demand of the
buyer, if at the time of concluding the contract the seller knew or
should known that the goods had been lost or damaged and failed to inform
the buyer about this.
Article 460. The Duty of the Seller to Hand Over Goods Free from the
Rights of Third Persons
1. The seller shall be obliged to give to the buyer goods free from
any rights of third persons with the exception of the case when the buyer
has agreed to accept goods encumbered with the rights of third persons.
The seller's failure to discharge this duty shall entitle the buyer
to demand a reduction of the price of goods or to cancel the contract of
sale, if it is not proved that the buyer knew or should have known about
the rights of third persons to these goods.
2. The rules, provided for by Item 1 of this Article, shall be
applicable in that case as well when to the goods by the time of their
transfer there had been claims from third persons, about which the seller
had information if these claims were subsequently recognized as lawful in
the established order.
Article 461. The Liability of the Seller in Case of the Withdrawal
of Goods from the Buyer
1. If goods are withdrawal from the buyer by third persons on the
grounds that arose before the execution of the contract of sale, the
seller shall be obliged to compensate the buyer's losses, unless he
proves that the buyer knew or should have known about these grounds.
2. The agreement of the parties thereto about the release of the
buyer of the liability in case third persons reclaim the acquired goods
from the buyer or about its restriction shall be null and void.
Article 462. The Duties of the Buyer and the Seller in Case of
Bringing an Action About the Withdrawal of Goods
If a third party brings an action for the withdrawal of goods on the
ground that arose before the execution of the contract of sale, the buyer
shall be obliged to draw the seller to the participation in the case,
whereas the seller shall be obliged to join this case on the side of the
buyer.
The non-engagement by the buyer of the seller in the participation
in the case shall absolve the seller from his liability to the buyer, if
the seller proves that by taking part in the case he could prevent the
withdrawal of sold goods from the buyer.
The seller who was involved by the buyer in the case but who failed
to take part in it shall be deprived of the right to prove that the buyer
conducted the case incorrectly.
Article 463. The Consequences of the Non-execution of the Duty to
Hand Over Goods
1. If the seller refuses to give to the buyer the sold goods, the
buyer shall have the right to waive the execution of the contract of
sale.
2. If the seller refuses to give an individually definite thing, the
buyer shall have the right to lay claims to the seller, provided for by
Article 398 of this Code.
Article 464. The Consequences of the Non-execution of the Duty to
Pass Accessories and Documents Relating to Goods
If the seller fails to pass or refuses to pass to the buyer
accessories or documents relating to goods, which he should give in
keeping with law, other legal acts or with the contract of sale (Item 2
of Article 456), the buyer shall have the right to fix the reasonable
period of time for their transfer.
In case when the accessories and documents relating to goods have
not been given by the seller in the said period of time, the buyer shall
have the right to waive goods, unless otherwise stipulated by the
contract.
Article 465. The Quantity of Goods
1. The quantity if goods subject to the transfer to the buyer shall
be provided for by the contract of sale in corresponding units of
measurement or in money terms. The condition of the quantity of goods may
be agreed upon by fixing in the contract the order of its estimation.
2. If the contract of sale does not make it possible to estimate the
quantity of goods subject to transfer, the contract shall not be deemed
to be concluded.
Article 466. The Consequences of the Breach of the Condition for the
Quantity of Goods
1. If the seller has passed to the buyer in breach of the contract
of sale the less or quantity of goods than that specified in the
contract, the buyer shall have the right to demand the missing quantity
of goods or to waive the given goods and the payment for them, but the
goods have been paid for, to demand the return of the paid sum of money.
2. If the seller has passed to the buyer goods in the quantity
exceeding that specified in the contract of sale, the buyer shall be
obliged to inform the seller about this in the procedure, provided for by
Item 1 of Article 483 of this Code. If the seller has failed to dispose
of the corresponding part of goods within the reasonable period of time,
after the receipt of the buyer's information, the buyer shall have the
right to accept all the goods, unless otherwise stipulated by the
contract.
3. If the buyer accepts goods in the quantity exceeding that
indicated in the contract of sale (Item 2 of this Article), the
additionally accepted goods shall be paid for at the price specified for
the goods accepted in conformity with the contract, unless the agreement
between the parties thereto has fixed a different price.
Article 467. Assortment of Goods
1. If under the contract of sale goods are subject to transfer in a
definite correlation according to kinds, models, size, colour and other
properties (assortment), the seller shall be obliged to transfer goods in
the assortment agreed upon by the parties thereto.
2. If assortment has not been determined in the contract of sale and
the latter has not established the procedure for its definition, but it
follows from the substance of the obligation that goods should be
transferred to the buyer in assortment on the basis of the buyer's needs
which were known to the seller at the time of concluding the contract or
to refuse to execute this contract.
Article 468. The Consequences of Breaking the Condition of Goods
Assortment
1. In case of the transfer of goods, stipulated by the contract of
sale, in assortment inconsistent with the contract, the buyer shall have
the right to refuse to accept them and pay for them, but if they have
been paid for, to demand the return of the paid sum of money.
2. If alongside with goods whose assortment corresponds to the
contract of sale the seller has given to the buyer goods with the breach
of the assortment condition, the buyer shall have the right:
to accept goods fitting with the assortment condition and to refuse
to accept the rest of them;
to waive all the given goods;
to demand that goods which are at variance with the assortment
condition should be replaced by goods in the assortment stipulated by the
contract;
to accept all the given goods.
3. In case of the refusal from the goods whose assortment differs
from the condition of the contract of sale or in case of making a claim
for the replacement of goods inconsistent with the assortment condition,
the buyer shall have the right to refuse to pay for these goods, but if
they have been paid for, to demand the refund of the paid sum of money.
4. Goods running at variance with the assortment condition of the
contract of sale shall be deemed to be accepted, unless the buyer informs
the seller about his refusal to take goods within the reasonable period
after their receipt.
5. If the buyer has not refused to accept goods whose assortment
runs counter to the contract of sale, he shall be obliged to pay for them
at the price agreed upon with the seller. In case where the seller has
not taken the necessary measures of adjusting the price within the
reasonable period, the buyer shall pay for goods at the price which at
the time of concluding a contract under comparable circumstances has been
usually charged for similar goods.
6. The rules of this Article shall be applied, unless otherwise
stipulated by the contract of sale.
Article 469. The Quality of Goods
1. The seller shall be obliged to transfer to the buyer goods whose
quality corresponds to the contract of sale.
2. In the absence of quality terms in the contract of sale the
seller shall be obliged to hand over to the customs goods suitable for
the purposes for which goods of this sort are usually used.
If the seller was informed by the buyer about the concrete purposes
of the acquisition of goods during the conclusion of the relevant
contract, the seller shall be obliged to transfer to the buyer goods
suitable for use in conformity with these purposes.
3. In case goods are sold according to sample and/or description the
seller shall be obliged to hand over goods which correspond to the sample
and/or their description.
4. If by a law or in a procedure established by a law for
mandatory requirements for
the quality of saleable goods, the seller engaged in business shall be
obliged to transfer to the buyer goods which meet these mandatory
requirements.
Under the agreement between the seller and the buyer the former may
hand over to the latter goods meeting the higher requirements for quality
as compared with the mandatory requirements stipulated by a law or in a
procedure established by a law.
Article 470. The Guarantee of the Quality of Goods
1. Goods which the seller is obliged to hand over to the buyer shall
correspond to the requirements, stipulated by Article 469 of this Code,
at the time of their transfer to the buyer, unless the contract of sale
provides for a different time of defining the compliance of goods with
these requirements and within the reasonable period goods shall be
suitable for the purposes for which goods of this sort are usually used.
2. In case where the contract of sale provides for the submission by
the seller of the guarantee of the quality of goods, the seller shall be
obliged to transfer to the buyer goods which should meet the
requirements, stipulated by Article 469 of this Code, during the time
fixed by the contract (guarantee period).
3. The guarantee of the quality of goods shall also extend to all
the complementary parts, unless otherwise provided for by the contract of
sale.
Article 471. The Reckoning of the Guarantee Period
1. The guarantee period shall start to run since the time of
transfer of goods to the buyer (Article 457), unless otherwise stipulated
by the contract of sale.
2. If the buyer is deprived of the possibility to use goods, for
which the contract has provided the guarantee period, due to the
circumstances under the control of the seller, the guarantee period shall
not run until the removal of relevant circumstances by the seller.
Unless otherwise stipulated by the contract of sale, the guarantee
period shall be prolonged for the time during which goods could not be
used because of the discovered shortcomings, provide the seller is
informed about the defects of goods in the order established by Article
483 of this Code.
3. Unless otherwise stipulated by the contract of sale, the warranty
period for complementary parts shall be deemed to be equal to the
guarantee period for the basic item and shall begin to run simultaneously
with the guarantee period for the basic item.
4. A guarantee period shall be established for goods (complementary
parts), in which defects (Article 476) have been discovered during the
guarantee period. This guarantee period shall be of the same duration
that applies to the replaced goods, unless otherwise stipulated by the
contract of sale.
Article 472. The Serviceable Life of Goods
1. By a law or in a procedure established by a law there may be
stipulated the obligation to determine the period of time at the
expiration of which the goods are considered unsuitable for use for their
regular purpose (period of suitability).
2. Goods for which the serviceable life has been fixed shall be
transferred by the seller to the buyer with all allowance for their use
by designation before the expiry of the serviceable life, unless otherwise
stipulated by the agreement.
Article 473. The Reckoning of the Serviceable Life of Goods
The serviceable life of goods shall be determined by the period of
time, calculated since the day of their manufacture, during which goods
are fit for use, or by the date before which goods are fit for use.
Article 474. Quality Inspection
1. Quality inspection may be provided for by the law, other legal
acts and the mandatory requirements of state standards or by the contract
of sale.
Procedure for quality inspection shall be introduced by the law,
other legal acts, the mandatory requirements of state standards or by the
contract. In cases there inspection procedure is established by the law,
other legal acts and the mandatory requirements of state standards, the
procedure of quality inspection of goods, determined by the contract,
shall comply with these requirements.
2. If procedure for quality inspection is not introduced in keeping
with Item 1 of this Article, the inspection of the quality of goods
shall be carried out in accordance with the customs of the volume of
business or with other commonly used terms of the quality inspection of
goods subject to transfer under the contract of sale.
3. If the law, other legal acts, the mandatory requirements of state
standards or the contract of sale provide for the duty of the seller to
inspect the quality of goods to be transferred to the buyer (testing,
analysis, inspection, etc.), the seller shall present to the buyer proof
of quality inspection.
4. Procedure, and also other terms of the quality inspection of
goods, carried out both by the seller and the buyer, shall be the same.
Article 475. The Consequences of the Transfer of Goods of Improper
Quality
1. Unless defects of goods were specified by the seller, the buyer
to whom substandard goods have been handed over shall have the right to
demand from the seller at his option:
- a proportionate reduction in the purchase price;
- gratuitous removal of defects in goods within the reasonable
period of time;
- compensation of his expenses incurred in the removal of the
defects of goods.
2. If the requirements for the quality of goods have been breached
substantially (discovery of irremovable defects, defects which cannot be
removed without disproportionate costs or costs of time, recurrent
defects or newly emerged defects after their removal, and of other
similar shortcomings), the buyer shall have the right to act at his
option:
to refuse to fulfil the contract of sale and to demand the sum of
money paid for the goods;
to demand the substitution of proper goods corresponding to the
contract for the goods of improper quality.
3. Claims for the removal of defects or for the substitution of
goods, referred to in Items 1 and 2 of this Article, may be made by the
buyer, unless the contrary follows from the nature of goods or the
substance of the obligation.
4. In the event of the improper quality of some part of goods that
make up the set (Article 479) the buyer shall have the right to exercise,
in respect of this part of goods, the rights, envisaged by Items 1 and 2
of this Article.
5. The rules, provided for by this Article, shall be applicable,
unless the present Code or any other law establishes the contrary.
Article 476. Defects of Goods for Which the Seller Is Responsible
1. The seller shall be responsible for the defects of goods, if the
buyer proves that they had arisen before they were transferred to him or
for the reasons that emerged before this occurrence.
2. The seller shall bear responsibility for the defects of the goods
to which he accorded the guarantee of quality, unless he proves that
these defects arose after the goods had been handed over the buyer in
consequence of the breach by the buyer of the rules of using goods or of
their storage, or in consequence of the actions of third persons or force
majeure.
Article 477. Time-limits of Discovery of Defects in Transferred
Goods
1. Unless otherwise stipulated by the law or the contract of sale,
the buyer shall have the right to make claims associated with defects of
goods, provided they have been discovered in the time-limits fixed by
this Article.
2. If no guarantee period or serviceable life is established for
goods claims for defects in goods may be made by the buyer, provided that
the defects of goods sold have been discovered in the reasonable period
of time, but within two years since the day of transfer of goods to the
buyer or within the longer period of time, when it is fixed by the law or
the contract of sale. The time-limit for the discovery of shortcomings in
goods subject to carriage or dispatch by post shall be reckoned since the
day of the delivery of goods to the place of their destination.
3. If a guarantee period has been fixed for goods, the buyer shall
have the right to make claims associated with defects of goods upon the
discovery of defects during the guarantee period.
If a warranty period has been fixed for complementary parts in the
contract of sale of lesser duration than for the basic unit, the buyer
shall have the right to make claims for the defects in a complementary
part upon their discovery during the guarantee period for the basic unit.
If a guarantee period is fixed for a complementary part in the
contract for longer duration than the guarantee period for the basic
unit, the buyer shall have the right to make claims for defects of goods,
if defects of the complementary part have been discovered during its
guarantee period, regardless of the expiry of the guarantee period for
the basic unit.
4. The buyer shall have the right to make claims for the defects of
goods with serviceable life, if they have been discovered during their
serviceable life.
5. In cases where the guarantee period stipulated by the contract
makes up less than two years and defects in goods were discovered by the
buyer upon the expiry of the guarantee period, but within two years since
the day of the transfer of goods to the buyer, the seller shall bear
responsibility, if the buyer proves that the defects of goods arose
before they had been handed over to the buyer or for the reasons that
emerged before this occurrence.
Article 478. Complete Sets of Goods
1. The seller shall be obliged to hand over to the buyer goods
corresponding to the terms of the contract of sale on completeness.
2. If the contract of sale has not defined the complete set of
goods, the seller shall be obliged to hand over to the buyer goods whose
completeness is determined by the customs of the volume of business or by
other usually made claims.
Article 479. A Set of Goods
1. If the contract of sale provides for the duty of the seller to
hand over to the buyer a definite set of goods, the obligation shall be
deemed to be fulfilled since the time of the transfer of all goods
included in the set.
2. Unless otherwise stipulated by the contract of sale and unless
the contrary follows from the substance of the obligation concerned, the
seller shall be obliged to transfer at once to the buyer all the goods
included in the set.
Article 480. The Consequences of the Transfer of Incomplete Sets of
Goods
1. If an incomplete set of goods is transferred (Article 478), the
buyer shall have the right to demand from the seller at his option:
- a proportionate reduction of the purchase price;
- the completing of goods within the reasonable period of time.
2. If the seller has failed to fulfil the claims of the buyer for
completing goods within the reasonable period of time, the buyer shall
have the right at his option:
to demand the substitution of complete goods for incomplete goods;
to waive the execution of the contract of sale and demand the refund
of the paid sum of money.
3. The consequences, envisaged by Items 1 and 2 of this Article,
shall also be applied in case of the breach by the seller of his duty to
hand over to the buyer a set of goods (Article 479), unless otherwise
stipulated by the contract of sale and unless the contrary follows from
the substance of the obligation.
Article 481. Tare and Packaging
1. Unless otherwise stipulated by the contract of sale and unless
the contrary follows from the substance of the obligation, the seller
shall be obliged to hand over goods in tare and/or in packaging, except
for goods which do not require tare and/or packaging in view of their
character.
2. If the contract of sale has not determined the requirements for
tare and packaging, goods shall be bagged and/or packaged by the usual
method, and in the absence of such method by the method that ensures the
safety of goods of such kind under the usual conditions of storage and
transportation.
3. If the statutory order provides for mandatory requirements for
tare and/or packaging, the seller engaged in business shall be obliged to
hand over goods to the buyer in tare and/or in packaging meeting these
mandatory requirements.
Article 482. The Consequences of the Transfer of Goods Without Tare
and/or Packaging or in Improper Tare and/or Packaging
1. In cases where goods subject to bagging and/or packaging are
handed over to the buyer without tare and/or packaging, the buyer shall
have the right to demand that the seller should bag and/or pack goods or
to replace improper tare and/or packaging, unless the contrary follows
from the contract, the substance of the obligation or the nature of
goods.
2. In cases, provided for by Item 1 of this Article, the buyer shall
have the right to make to the seller claims following from the transfer
of goods of improper quality (Article 475) instead of the claims,
referred to in this Item.
Article 483. The Notification of the Seller about the Improper
Execution of the Contract of Sale
1. The buyer shall be obliged to inform the seller about the breach
of the term of the contract of sale on the quantity, assortment, quality,
completeness, tare and/or package of goods within the period provided for
by the law, other legal acts or the contract, and if such period has not
been fixed, within the reasonable period after the breach of the
corresponding term of the contract should have been discovered by
proceeding from the character and designation of goods.
2. In case of non-fulfilment of the rule, envisaged by Item 1 of
this Article, the seller shall have the right to refuse in full or in
part from the satisfaction of the claims of the buyer on the transfer to
him of the missing quantity of goods, on the replacement of goods that do
not meet the terms of the contract of sale, on the quality and assortment
of goods, on the removal of defects of goods, on completing goods or on
the substitution of complete goods for incomplete goods, on the bagging
and/or packing of goods or on the replacement of substandard tare and/or
packaging of goods, if he proves that the non-fulfilment of his rule by
the buyer has involved the impossibility of satisfying his claims or
entails for the seller the incommensurable expenses as compared with
those he would have incurred, has he been informed in due time about the
breach of the contract.
3. If the seller knew or should known about the fact that the
transferred goods did not correspond to the terms of the contract of
sale, he shall not have the right to refer to the provisions, stipulated
by Items 1 and 2 of this Article.
Article 484. The Duty of the Buyer to Accept Goods
1. The buyer shall be obliged to accept goods given to him with the
exception of cases where he has the right to demand that goods be
replaced or to refuse to fulfil the contract of sale.
2. Unless otherwise stipulated by the law, other legal acts or the
contract of sale, the buyer shall be obliged to perform actions which in
keeping with the usual claims are needed on his part to ensure the
transfer and receipt of relevant goods.
3. In cases where the buyer in contravention of the law, other legal
acts or the contract of sale does not accept goods or refuses to accept
them, the seller shall have the right to demand that the buyer should
accept goods or refuse to fulfil the contract.
Article 485. The Price of Goods
1. The buyer shall be obliged to pay for goods at the price,
specified by the contract of sale at the price fixed in accordance with
Item 3 of Article 424 of this Code unless the contract provides for the
price and unless it may be estimated by proceeding from its terms, and
also perform actions at his own expense, which in conformity with the
law, other legal acts, the contract or the usual requirements are
necessary for making payments.
2. When price is set depending on the weight of goods, it shall be
estimated according to the net weight, unless otherwise stipulated by the
contract of sale.
3. If the contract of sale provides that the price of goods is
subject to change depending on the indices stipulating the price of goods
(cost price, expenses, etc.), but at the same time does not determine the
method of revision of prices, the price shall be estimated by proceeding
from the correlation of these indices at the time of concluding the
contract and transferring goods. In case the seller delays the fulfilment
of the duty of handing over goods, the price shall be estimated from the
correlation of these indices at the time of concluding the contract, and
the contract does not provide for this, at the time fixed in keeping with
Article 314 of this Code.
The rules envisaged by this Item shall be applicable, unless
otherwise stipulated by this Code, other law, other legal acts or the
contract and unless the contrary follows from the substance of the
obligation concerned.
Article 486. The Payment for Goods
1. The buyer shall be obliged to pay for goods directly before or
after the transfer of goods by the seller, unless otherwise stipulated by
this Code, other laws, other legal acts or the contract of sale and
unless the contrary follows from the substance of the obligation
concerned.
2. If the contract of sale does not provide for payments for goods
by instalment, the buyer shall be obliged to payment to the seller the
full price for the transferred goods.
3. If the buyer does not pay for the goods transferred to him in
keeping with the contract of sale, the seller shall have the right to
demand the payment for goods and interest payment in accordance with
Article 395 of this Code.
4. If the buyer refuses to accept goods and pay for them in
contravention of the contract of sale, the seller shall have the right at
his option to demand either the payment for goods or to refuse to fulfil
the contract.
5. In cases where in keeping with the contract of sale the seller
shall be obliged to hand over to the buyer the goods which have not been
paid by the buyer and other goods, the seller shall have the right to
suspend the transfer of these goods until the time when all the goods
handed over earlier are paid in full, unless otherwise stipulated by the
law, other legal acts or the contract.
Article 487. The Tentative Payment for Goods
1. In cases where the contract of sale provides for the duty of the
buyer to pay for goods in full or in part before the transfer by the
seller of goods (tentative payment), the buyer shall make payment within
the period provided for by the contract, and if such period is not
envisaged by the contract, within the period, determined pursuant to
Article 314 of this Code.
2. In case of default on the duty by the buyer to pay for goods use
shall be made of the rules, envisaged by Article 328 of this Code.
3. If the seller who has received the sum of tentative payment fails
to discharge the duty of transferring goods within the fixed period
(Article 457), the buyer shall be obliged to demand the transfer of the
paid goods or the refund of the sum of the tentative payment for goods
which have not been handed over by the seller.
4. If the seller fails to perform the duty of transferring the
tentatively paid goods and unless the contrary is stipulated by the
contract of sale, interest shall be paid to the amount of the tentative
payment pursuant to Article 395 of this Code since the day when under the
contract the goods should have been handed over till the day of the
transfer of goods to the buyer or the refund to him of the tentatively
paid sum of money. The contract may provide for the duty of the seller to
pay interest to the amount of the tentative payment since the day of the
receipt of this sum from the buyer.
Article 488. Payment for Goods Sold on Credit
1. If the contract of sale provides for the payment for goods over a
definite period of time after they are handed over to the buyer (sale of
goods on credit), the buyer shall effect the payment on due date
envisaged by the contract, and if such date is not stipulated by the
contract, on due date defined in keeping with Article 314 of this Code.
2. In case of default on the duty by the seller to transfer goods,
use shall be made of the rules, provided for by Article 328 of this Code.
3. If the buyer who has received goods does not fulfil the duty of
payment for them within the period fixed by contract of sale, the seller
shall be obliged to demand payment for he transferred goods or the refund
of the goods not paid for.
4. If the buyer fails to fulfil the duty of paying for the
transferred goods in the period stipulated by the contract and unless the
contrary is specified by this Code or the contract of sale, interest
shall be paid to the amount of the overdue sum of money in keeping with
Article 395 of this Code from the day when the goods should have been
paid for to the day of payment for goods by the buyer.
The contract may provide for the duty of the buyer to pay interest
to the amount corresponding to the price of goods beginning with the day
of the transfer of the goods by the seller.
5. Unless otherwise stipulated by the contract of sale, the goods
sold on credit from the time of their transfer to the buyer and to their
payment shall be recognized as held in pledge by the seller for the
guaranteed execution by the buyer of his duty to make payment for the
goods.
Article 489. Payment for Goods by Instalment
1. The contract for sale of goods on credit with the proviso on the
instalment of date shall be deemed to be concluded, if it indicated the
price of goods, the procedure, period and amount of payments alongside
with other essential terms of the contract of sale.
2. When the buyer fails to make a regular payment for the goods sold
by instalment and transferred to him within the period stipulated by the
contract, the seller shall have the right, unless otherwise provided for
by the contract, to refuse execute the contract and demand the refund of
the sold goods with the exception of cases where the sum of payments
received from the buyer exceeds half of the price of the goods.
3. The rules envisaged by Items 2, 4 and 5 of Article 488 of this
Code shall be applicable to the contract for sale on credit.
Article 490. Insurance of Goods
The contract of sale may provide for the duty of the seller or the
buyer to insure goods.
If the party duty-bound to ensure goods does not effect insurance in
keeping with the contract terms, the other party shall have the right to
ensure these goods and demand that the duty-bound party reimburse the
expenses on insurance or refuse to execute the contract.
Article 491. The Preservation of the Right of Property for the
Seller
In cases where the contract of sale provides that the right of
property in the goods handed over to the buyer is preserved for the
seller before the payment for the goods or the onset of other
circumstances, the buyer shall not have the right to alienate the goods
or dispose of them in any other way before the transfer of the right of
ownership to him, unless otherwise stipulated by the law or the contract
or unless the contrary follows from the designation and property of the
goods.
In cases where the transferred goods are not paid for within the
period specified by the contract or where other circumstances emerge
under which the right of property passes to the buyer, the seller shall
have the right to demand the return of the goods to him, unless otherwise
stipulated by the contract.
§ 2. Retail Sale
Article 492. The Contract of Retail Sale
1. Under the contract of retail sale the seller engaged in the
business of retail sales shall undertake to hand over to the buyer goods
intended for personal, family, home and any other use unrelated with
business activity.
2. The contract of retail sale shall be a public agreement (Article
426).
3. The laws on the protection of the consumers' rights and other
legal acts, adopted in accordance with them, shall be applicable to the
relations covered by the contract of retail sale with the participation
of the buyer-individual but not regulated by this Code.
Article 493. The Form of the Contract of Retail Sale
Unless otherwise stipulated by the law or the contract of retail
sale, including by the terms of law blanks or other standard forms, to
which the buyer joins (Article 428), the contract of retail sale shall be
deemed to be concluded in the proper form since the time of the issue by
the seller to the buyer of a cash-desk ticket or a sale receipt, or any
other document confirming payment for goods. The lack of said documents
shall not deprive the buyer of the possibility of referring to testimony
by witnesses in corroboration of the conclusion of the contract and its
terms and conditions.
Article 494. The Public Offer of Goods
1. The offer of goods in advertisement, merchandise catalogues and
descriptions of goods, referred to people at large, shall be recognized
as a public offer (Item 2 of Article 437), if it contain all the
essential terms and conditions of the retail sale contract.
2. The putting up of goods in places of sales (on counters, in
windows, etc.), the demonstration of other samples or the presentation of
information about goods sold (descriptions, catalogues, photographs of
goods, etc.) in places of sales shall be recognized as a public offer,
regardless of the fact whether the price or other essential terms and
conditions of the retail sale contract, except for the case when the
seller has clearly determined that relevant goods are not intended for
sale.
Article 495. The Presentation of Information about Goods to the
Buyer
1. The seller shall be obliged to present to the buyer the requisite
and trustworthy information about goods offered for sale, which
corresponds to the requirements, established by the law, other legal acts
and usually made in retail sale, for the substance and methods of
presenting such information.
2. The buyer shall have the right, before the conclusion of a
contract of retail sale, to inspect goods, demand the check-up of their
properties or their demonstration, unless this is excluded due to the
nature of goods and contradict the rules accepted in retail sale.
3. Unless the buyer is given the possibility of receiving forthwith
in the place of sale information about goods, referred to in Items 1 and
2 of this Article, he shall be entitled to demand from the seller the
compensation for the losses caused by the unwarranted evasion from the
conclusion of the contract of retail sale (Item 4 of Article 445), and if
the contract has been concluded, to refuse within the reasonable period
of time from the execution of the contract, to demand the refund of the
paid sum of money and the compensation for other losses.
4. The seller who has not offered to the buyer the possibility of
receiving relevant information about goods shall also bear liability for
the defects of goods which arose after their transfer to the buyer, if
the proves that they had arisen in the absence of such information.
Article 496. The Sale of Goods with the Proviso That the Buyer
Accepts Them Within the Fixed Period of Time
The contract of retail sale may be concluded with the proviso that
the buyer accepts goods within the fixed period of time, fixed by the
contract, during which these goods may not be sold to another buyer.
Unless otherwise stipulated by the contract, the failure of the
buyer to appear or the non-commission of other necessary actions for the
acceptance of goods in the period of time fixed by the contract may be
regarded by the seller as a ground for the refusal of the buyer to fulfil
the contract.
The seller's additional expenses on the secured transfer of goods to
the buyer in the period of time fixed by the contract shall be included
in the price of goods, unless otherwise stipulated by the law, other
legal acts or the contract.
Article 497. The Sale of Goods by Sample
1. A contract of retail sale may be concluded on the basis of the
familiarization of the buyer with the sample of goods (its description,
the merchandise catalogue, etc.) offered by the seller.
2. Unless otherwise stipulated by the law, other legal acts or the
contract, the contract of retail sale by sample shall be deemed to be
fulfilled since the time of the delivery of goods to the place indicated
in the contract, but if the place of the transfer of goods has not been
determined by the contract, since the time of the delivery of goods to
the buyer in the place of residence of an individual or the place of
location of a legal entity.
3. Before the transfer of goods the buyer shall have the right to
refuse to fulfil the contract of retail sale, provided that the seller's
necessary expenses incurred on the commission of actions for the
fulfilment of the contract are compensated.
Article 498. The Sale of Goods with the Use of Vending Machines
1. In cases where goods are sold with the use of vending machines,
the owner of these machines shall be obliged to bring to the notice of
buyers information about the seller by putting up on the machine the data
on the name (firm's name) of the seller, the place of his location, the
conditions of his work, and also on the actions to be committed by the
buyer for the receipt of goods or by presenting to the buyer such data by
any other method.
2. The contract of retail sale with the use of vending machines
shall be deemed to be concluded since the time of the commission by the
buyer of the actions necessary for the receipt of goods.
3. If paid goods are not handed over to the buyer, the seller shall
be obliged, on the demand of the buyer, forthwith to hand over goods to
him or to return the sum of money paid by him.
4. In cases where the vending machine is used for change, the
acquisition of currency notes, the rules for retail sale shall be
applied, unless the contrary follows from the substance of the obligation
concerned.
Article 499. The Sale of Goods with the Proviso of Their Delivery to
the Buyer
1. If the contract of retail sale has been concluded with the
proviso of the delivery of goods to the buyer, the seller shall be
obliged to deliver goods to the place indicated by the buyer within the
period of time, fixed by the contract, and if the place of delivery of
goods has not been indicated by the buyer, goods shall be delivered to
the place of residence of the buying individual or the place of location
of the buying legal entity.
2. The contract of retail sale shall be deemed to be executed since
the time goods have been handed over to the buyer, and in the absence of
the latter, to any other person who has produced the receipt or any other
document testifying to the conclusion of the contract or to the
completion of the delivery of goods, unless otherwise stipulated by the
law, other legal acts or the contract and unless the contrary follows
from the substance of the obligation concerned.
3. If the contract fails to fix the time of delivery of goods for
handing over to the buyer, goods shall be delivered within the reasonable
period of time after the receipt of the buyer's claim.
Article 500. The Price and Payment for Goods
1. The buyer shall be obliged to pay for goods at the price quoted
by the seller at the time of concluding the retail sale contract, unless
otherwise stipulated by the law or other legal acts or unless follow from
the substance of the obligation concerned.
2. If the retail sale contract provides for the tentative payment
for goods (Article 487), the non-payment by the buyer of goods in the
period of time foxed by the contract shall be deemed to be the buyer's
refusal to fulfil the contract, unless otherwise stipulated by the
agreement of the parties thereto.
3. The rule envisaged by the first paragraph of Item 4 of Article
488 of this Code shall not be applied to the contracts of retail sale on
credit, including to those with the proviso of payment by the buyer for
goods by instalment.
The buyer shall have the right to pay for goods at any time within
the contractual period of instalment of date.
Article 501. The Contract of Hire and Sale
Under the contract the buyer shall be a hirer (leaseholder) of goods
given to him (contract of hire and sale) prior to the transfer of
ownership of goods to the buyer (Article 491).
Unless otherwise stipulated by the contract, the buyer shall become
the owner of goods since the time of payment for goods.
Article 502. Exchange of Goods
1. The buyer shall have the right, during 14 days since the time of
the transfer of non-food products to him, if no longer period is declared
by the seller, to exchange the bought products in the place of purchase
and in other places, announced by the seller, for similar products of a
different size, form, clearance, style, colour or complete set by making
the necessary resettlement with the seller if there is a difference in
price.
If the seller has no goods at his disposal needed for exchange, the
buyer shall have the right to return to the seller the acquired goods and
receive the sum of money paid for them.
The demand of the buyer for exchange or the return of goods shall be
subject to satisfaction, unless goods have been in use, retained their
consumer properties and there is evidence that they have been bought from
the given seller.
2. The list of goods which are not subject to exchange or return
according to the grounds, referred to in this Article, shall be
determined in the order prescribed by the law or other legal acts.
Article 503. The Right of the Buyer in Case of Sale to Him of Goods
of Improper Quality
1. The buyer to whom goods of improper quality are sold, if its
defects have not been specified by the seller, shall have the right to
demand at his option:
the replacement of substandard goods with goods of proper quality;
appropriate reduction in the purchase price;
compensation for the expenses incurred in the removal of defects of
goods.
The buyer shall have the right to demand the replacement of hi-tech
or expensive goods in case of the substantial breach of requirements for
their quality (Item 2 of Article 475).
2. In case of the discovery of defects of goods whose properties
make it possible to remove them (food products, household chemical goods,
etc.) the buyer shall have the right to replace such goods by goods of
proper quality or a proportionate reduction in the purchase price.
3. In place of producing requirements, referred to in Items 1 and 2
of his Article the buyer shall have the right to refuse to execute the
contract of retail sale and demand the return of the sum of money paid
for goods.
In this case the buyer shall return the received goods of improper
quality on the demand of the seller and at his expense.
In case of the return by the buyer of the sum of money paid for
goods the seller shall have no right to withdraw from it the sum of money
for which the value of goods fell due to the full or partial use of
goods, the loss of vendibility or other similar circumstances.
Article 504. Compensation for the Difference in Price When Goods Are
Replaced, the Purchase Price Is Reduced and Goods of
Improper Quality Are Returned
1. When substandard goods are replaced by goods of proper quality
that correspond to the retail sale contract, the seller shall have no
right to demand compensation for the difference between the price of
goods specified by the contract and the price of goods existing at the
time of the substitution of goods or of the delivery by the court of its
decision on the replacement of goods.
2. In case of replacement of substandard goods by similar goods of
proper quality but with different size, style, sort or other distinctive
features, the difference between the price of the replaceable goods at
the time of substitution and the price of goods handed over in place of
substandard goods shall be subject to compensation.
If the demand of the buyer has not been satisfied by the seller, the
price of replaceable goods and the price of goods handed over in place of
them shall be fixed at the time of the delivery by the court of its
decision on the substitution of goods.
3. If a demand is made on an adequate reduction in the purchase
price of goods, it is necessary to take into account the price of goods
at the time of making a demand on their price reduction, and if the
buyer's demand has not been satisfied of one's own accord, at the time of
the delivery by the court of its decision on the proportionate reduction
of the price.
4. If substandard goods are returned to the seller, the buyer shall
have the right to demand compensation for the difference between the
price of goods fixed by the retail sale contract and the price of
appropriate goods at the time of the voluntary satisfaction of his
demand, and if this demand has not been satisfied of his own accord, at
the time of the delivery by the court of its decision.
Article 505. The Liability of the Seller and the Fulfillment of the
Obligation in Kind
In case of default on the seller's obligation under the contract of
retail sale, the compensation of losses and the payment of a penalty
shall not absolve the seller from the obligation in kind.
§ 3. Delivery of Goods
Article 506. Contract for Delivery
Under the contract for delivery the supplier-seller engaged in
business shall undertake to transfer to the buyer goods produced or
purchased by him within the fixed period or periods of time for use in
business or for other purposes unrelated to personal, family, home or any
other use.
Article 507. Settlement of Disagreements During the Conclusion of
the Contract for Delivery
1. When during the conclusion of a contract for delivery
disagreements arose between the parties over particular terms and
conditions of the contract, the party which has offered to conclude the
contract and received from the other party the proposal on the adjustment
of these terms and conditions shall, during 30 days since the day of
receipt of this proposal, unless a different date is fixed by law and
agreed upon between the parties, take measures on the coordination of the
relevant terms and conditions of the contract or notify in writing the
other party about the refusal to conclude it.
2. The party which has received the proposal under the corresponding
terms and conditions of the contract but has not taken measures to
coordinate the terms and conditions of the contract for delivery and has
not notified the other party about the refusal to conclude the contract
on due date, provided for by Item 1 of this Article, shall be obliged to
compensate the losses caused by the evasion from the coordination of the
terms and conditions of the contract.
Article 508. Periods of Delivery of Goods
1. In case where the parties provide for the delivery of goods
during the validity term of the contract for delivery by individual
consignments and where the periods of delivery of individual batches
(periods of delivery) have not be defined, goods shall be delivered by
even shipments monthly, unless the contrary follows from the law, other
legal acts, the substance of obligations and the customs of business
turnover.
2. The contract for delivery may establish a schedule of shipments
of goods (by decade, day, hour, etc.) in addition to the definition of
periods of delivery of goods.
3. Prior delivery of goods may be made with the consent of the
buyer.
Goods supplied short of the term and accepted by the buyer shall be
counted towards the quantity of goods subject to delivery in the next
period.
Article 509. The Procedure for Delivery of Goods
1. Goods shall be delivered by the supplier by means of shipment
(transfer) of goods to the buyer who is a party to the contract for
delivery or to the person indicated in the contract as a consignee.
2. In case where the contract for delivery provides for the right of
the buyer to give to the supplier directions on the shipment (transfer)
of goods to consignees (shipment warrants), goods shall be shipped
(transferred) by the supplier to the consignees, referred to in the
shipment warrant.
The consent of the shipment warrant and the date of its sending by
the buyer to the supplier shall be determined by the contract. If the
contract does not provide the time of sending a shipment warrant, the
latter shall be sent to the supplier within 30 days before the onset of
the period of delivery.
3. The non-submission of a shipment warrant by the buyer within the
fixed period of time shall entitle the supplier either to renounce the
execution of the contract for delivery or to demand that the buyer pay
for goods. Moreover, the supplier shall have the right to claim damages
caused in connection with the non-submission of the shipment warrant.
Article 510. Delivery of Goods
1. Delivery of goods shall be made by the supplier by means of their
shipment by transport vehicles, provided for by the contract for delivery
and on the contractual terms and conditions.
In cases where the contract fails to determine which type of
transportation facility and on which conditions goods are to be
delivered, the right of choosing the type of transportation facility or
of defining the conditions of the delivery of goods shall belong to the
supplier, unless the contrary follows from the law, other legal acts and
the substance of the obligation concerned or the customs of business
turnover.
2. The contract for delivery may provide for the receipt of goods by
the buyer (consignee) in the place of location of the supplier (sampling
of goods).
If the term of sample is not provided by the contract, the sampling
of goods shall be carried out by the buyer (consignee) within the
reasonable period of time after the receipt of the supplier's
notification about the readiness of goods.
Article 511. The Replenishment of Short Delivery of Goods
1. The supplier who has a shortage of delivery of goods in a
particular period of delivery shall be obliged to replenish the short
delivered goods in the next period (periods) within the validity term of
the contract for delivery, unless otherwise provided for by the contract.
2. In case where goods are shipped by the supplier to several
consignees, referred to in the contract for delivery or the shipment
warrant of the buyer, goods delivered to one consignee over and the
quantity envisaged by the contract or the shipment warrant shall not be
counted towards the short delivery of goods to other consignees, unless
otherwise stipulated by the contract.
3. By notifying the supplier the buyer shall have the right to
accept goods whose delivery has been overdue, unless otherwise stipulated
by the contract for delivery. Goods delivered before the supplier
receives the notification concerned, the buyer shall be obliged to accept
and pay for them.
Article 512. Assortment of Goods in Case of Replenishing Short
Deliveries
1. Assortment of the short delivered goods subject to replenishment
shall be determined by the agreement of the parties. In the absence of
such agreement the supplier shall be obliged to replenish the short
delivered quantity of goods in the assortment established for the period
in which the goods were short delivered.
2. The delivery of goods of one name in the greater quantity than
the contract for delivery provides shall not be counted towards the cover
of the short delivered goods of another name which form the same
assortment and shall be subject to replenishment, except for the cases
where such delivery was made with the preliminary written consent of the
buyer.
Article 513. The Acceptance of Goods by the Buyer
1. The buyer (consignee) shall be obliged to perform all the
necessary actions which ensure the acceptance of goods delivered in
keeping with the contract for delivery.
2. Goods received by the buyer (consignee) shall be examined by him
within the period of time, stipulated by the law, other legal acts, the
contract for delivery or the customs of the business turnover.
The buyer (consignee) shall be obliged to check the quantity and
quality of accepted goods within the same period of time in the order,
prescribed by the law, other legal acts, the contract or the customs of
business turnover, and to inform the supplier forthwith in writing about
the discovered discrepancies or defects of goods.
3. If the buyer (consignee) receives the delivered goods from a
transport organization, he shall be obliged to check the compliance of
these goods with information referred to in transport and accompanying
documents, and also to accept these goods from the transport organization
with the observance of the rules stipulated by the laws and other legal
acts regulating the activity of transportation facilities.
Article 514. Safekeeping of Goods Which Have Not Been Accepted by
the Buyer
1. When in keeping with the law, other legal acts or the contract
for delivery the buyer (consignee) refuses to accept the goods delivered
by the supplier, he shall be obliged to ensure the safety of these goods
(safekeeping) and inform the supplier immediately.
2. The supplier shall be obliged to take away the goods accepted by
the customs for safekeeping or to dispose of them within the reasonable
period of time.
If the supplier fails to dispose of these goods within this period,
the buyer shall have the right to sell goods or return them to the
supplier.
3. The requisite expenses incurred by buyer in connection with the
acceptance of goods for safekeeping, the sale of goods or their return to
the seller shall be liable to compensation by the supplier.
In this case, the proceeds from the sale of goods shall be
transferred to the supplier minus the amount due to the buyer.
4. In cases where the buyer does not accept goods from the supplier
without the grounds, established by the law, other legal acts or the
contract, or refuses to accept them, the supplier shall have the right to
demand from the buyer the payment for the goods.
Article 515. The Sampling of Goods
1. When the contract for delivery provides for the sampling of goods
by the buyer (consignee) in the place of location of the supplier (Item 2
of Article 510), the buyer shall be obliged to inspect the transferred
goods in the place of their transfer, unless otherwise stipulated by the
law, other legal acts or unless the contrary follows from the substance
of the obligation concerned.
2. The non-sampling of goods by the buyer (consignee) within the
period of time specified by the contract for delivery, and in the absence
of the contract within the reasonable period of time after the receipt of
the supplier's notification about the readiness of goods shall entitle
the supplier to refuse to fulfil the contract or to demand that the buyer
pay for goods.
Article 516. Payment for Delivered Goods
1. The buyer shall pay for delivered goods with the observance of
the procedure and form of payments stipulated by the contract for
delivery. If the agreement between the parties thereto fails to determine
the procedure and form of payments, payments shall be effected by means
of payment orders.
2. If the contract for delivery provides for the payment for goods
to be made by the recipient (payer) and the latter has refused without
any foundation to pay for goods or failed to pay for them within the
period of time stipulated by the contract, the supplier shall have the
right to demand that the buyer pay for the delivered goods.
3. In case where the contract for delivery provides for the shipment
of goods in parts forming the set, the payment for goods by the buyer
shall be effected after the shipment (sampling) of the last part forming
the set, unless otherwise stipulated by the contract.
Article 517. Tare and Packaging
Unless the contrary is stipulated by the contract for delivery, the
buyer (consignee) shall be obliged to return to the supplier reusable
tare and means of packaging of the delivered goods in the order and in
the terms stipulated by the law, other legal acts and by the obligatory
rules adopted in accordance with or by the contract.
Other tare, and also the packaging of goods shall be returned to the
supplier only in cases provided for by the contract.
Article 518. The Consequences of the Delivery of Goods of Improper
Quality
1. The buyer (consignee) to whom goods of improper quality have been
supplied shall have the right to make claims to the supplier as
stipulated by Article 475 of this Code, except for the case when the
supplier who has received the notification of the buyer about the
defects of the delivered goods shall without delay substitute goods of
proper quality for the delivered goods.
2. The buyer (consignee) who sells the delivered goods by retail
shall have the right to demand within the reasonable period of time the
substitution for the goods of improper quality, unless otherwise
stipulated by the contract for delivery.
Article 519. The Consequences of the Delivery of Incomplete Goods
1. The buyer (consignee) to whom goods have been supplied with the
breach of the terms and conditions of the contract for delivery, of the
requirements of the law and other legal acts or of the usual requirements
for completeness shall have the right to make to the supplier claims
stipulated by Article 480 of this Code, except for the case when the
supplier who has received the buyer's notification about the incomplete
set of the delivered goods shall make goods complete without delay or
replace these by complete goods.
2. The buyer (consignee) who sells goods by retail shall have the
right to demand the replacement within the reasonable period of time of
incomplete goods returned by the consumer by complete goods, unless
otherwise stipulated by the contract of delivery.
Article 520. The Rights of the Buyer in Case of Short Delivery of
Goods, the Non-fulfilment of the Requirements for the
Removal of Defects of Goods or of Completing Goods
1. If the supplier has failed to deliver the quantity of goods,
stipulated by the contract for delivery, or has not fulfilled the buyer's
claim for the replacement of substandard goods or for completing goods
within the fixed period of time, the buyer shall have the right to
acquire short delivered goods from other persons and to charge all the
necessary and reasonable expenses to the supplier for their acquisition.
The expenses of the buyer on the acquisition of goods from other
persons in cases of their short delivery by the supplier or of the
non-fulfillment of the buyer's claims for the removal of defects of goods
or for completing goods shall be reckoned according to the rules,
provided for by Item 1 of Article 524 of this Code.
2. The buyer (consignee) shall have the right to refuse to pay for
substandard and incomplete goods, and if such goods have been paid for,
to demand to refund of the paid sums of money pending the removal of
defects and the completion of goods or of their replacement.
Article 521. Penalty for Short Delivery or Delay in Delivery of
Goods
The penalty established by the law or the contract for delivery for
short delivery or delay in delivery of goods shall be recovered from the
supplier until the actual execution of the obligation within the limits
of his duty to replenish the short delivered quantity of goods in
subsequent periods of delivery, unless a different procedure for the
payment of penalty is established by the law or the contract.
Article 522. Cancellation of Similar Liabilities under Several
Contracts for Delivery
1. In cases where goods of the same name are delivered by the
supplier to the buyer at once under several contracts for delivery and
the quantity of delivered goods is insufficient for the cancellation of
the supplier's liabilities under all contracts, the delivered goods shall
be counted towards the execution of the contract to be indicated by the
supplier when he delivers goods or immediately after this delivery.
2. If the buyer has paid to the supplier for the goods of the same
name, received under several contracts for delivery and the sum of
payment is insufficient for the cancellation of the buyer's liabilities
under all contracts, the paid sum of money shall be counted towards the
execution of the contract, indicated by the buyer when goods are paid for
or without delay after payment.
3. If the supplier or the buyer have not availed of the rights
granted to them by Items 1 and 2 of this Article, the execution of the
liability shall be counted towards the cancellation of the liabilities
under the contract, where period of execution commenced earlier. If the
period of the execution of the liabilities under several contracts has
commenced simultaneously, the granted execution shall be counted in
proportion towards the cancellation of the liabilities under all
contracts.
Article 523. Unilateral Waiver of the Execution of the Contract for
Delivery
1. Unilateral waiver of the execution of the contract for delivery
(in full or in part) or unilateral change of this contract shall be
allowed in case of the substantial infringement of the contract by one of
the parties thereto (the fourth paragraph of Item 2 of Article 450).
2. The infringement of the contract for delivery by the supplier may
be substantial in cases of:
the delivery of goods of improper quality with defects which cannot
be removed in the period acceptable for the buyer;
the repeated breach of the terms of delivery of goods.
3. The infringement of the contract for delivery by the buyer may be
substantial in cases of:
repeated breach of the terms of payment for goods;
repeated non-sampling of goods.
4. The contract for delivery shall be deemed to be altered or
dissolved since the time of receipt by one party of the notification of
the other party about the unilateral waiver to execute the contract in
full or in part, unless a different term of cancelling or modifying the
contract is provided by the notification or defined by the agreement of
the parties.
Article 524. The Reckoning of Losses in Case of the Cancellation of
the Contract
1. If within the reasonable period of time after the cancellation of
the contract due to the infringement of the obligation by the seller the
buyer bought goods from another person at higher but reasonable price
instead of goods specified by the contract, the buyer may make to the
seller his claim for the compensation of losses in the form of the
difference between the contractual price and the price under the deal
made instead.
2. If within the reasonable period of time after the cancellation of
the contract owing to the infringement of the obligation by the buyer the
seller has sold goods to another person under the reasonable but lower
price than that stipulated by the contract, the seller may make to the
buyer his claim for the compensation of losses in the form of the
difference between the contractual price and the price under the dial
made instead.
3. If after the cancellation of the contract on the grounds,
provided for by Items 1 and 2 of this Article, no transaction has been
made instead of the dissolved contract, and the current price is
available for these goods, the party may make his claim for the
compensation of losses in the form of the difference between the price
specified by the contract and the current price existing at the time of
the dissolution of the contract.
The price that is usually charged under the comparable circumstances
for similar goods in the place where goods should be transferred shall be
recognized as a current price. If there is no current price in this
place, use may be made of the current price that was used in another
place, which may serve as a reasonable replacement, with due account of
the difference in the expenses on the transportation of goods.
4. The satisfaction of the requirements, provided for by Items 1, 2
and 3 of this Article, shall not release the party, which has not
fulfilled or fulfilled the obligation in improper way from the
compensation of other losses caused by the other party, on the basis of
Article 15 of this Code.
§ 4. Delivery of Goods for State Needs
Article 525. The Grounds for the Delivery of Goods for State Needs
1. Goods shall be delivered to meet state needs on the basis of a
state contract for the delivery of goods for state needs, and also in
keeping with the contracts for delivery of goods, concluded in accordance
with the state contract (Item 2 of Article 530). State needs shall be
recognized to mean the statutory needs of the Russian Federation or the
subjects of the Russian Federation, which are met from the budget
resources and the extra-budgetary sources of financing.
2. The rules for the contract for delivery (Articles 506-523) shall
be applicable to the relations involved in the delivery of goods for
state needs, unless otherwise stipulated by the rules of this Code.
The laws on the delivery of goods for state needs shall be
applicable to the relations involved in the delivery of goods for state
needs in the part that is not regulated by this paragraph.
Article 526. The State Contract for the Delivery of Goods for State
Needs
Under the state contract for the delivery of goods for state needs
(hereinafter referred to as the state contract) the supplier (executor)
shall undertake to transfer goods to the state customer or to another
person according to his direction, whereas the state customer shall
undertake to pay for the delivered goods.
Article 527. The Grounds for the Conclusion of State Contracts
1. A state contract shall be concluded on the basis of the order of
a state customer for the delivery of goods to meet state needs, accepted
by the supplier (executor).
The conclusion of a state contract shall be mandatory for the state
customer who has placed the order accepted by the supplier (executor).
2. The conclusion of a state contract shall be compulsory for the
supplier (executor) only in cases established by law and provided that
the state customer should compensate all the losses which can be caused
to supplier (executor) in connection with the fulfilment of the state
contract.
3. The condition of compensation of losses, envisaged by Item 2 of
this Article, shall not be applied to the governmental enterprises not
subject to privatization.
4. If an order for the delivery of goods for state needs is placed
by bidding, the conclusion of the state contract with the supplier
(executor), declared to be the tender winner, shall be compulsory for a
state customer.
Article 528. Procedure for the Conclusion of State Contracts
1. A state contract shall be drafted by a state customer and sent to
the supplier (executor), unless otherwise stipulated by the agreement
between them.
2. The party which has received the draft of a state contract shall
sign it within 30 days and return one copy of the state contract to the
other party, while in the presence of disagreements on the terms and
conditions of the state contract shall draw up minutes of disagreements
during this period and send it together with the signed state contract to
the other contract party or shall notify it about the refusal to conclude
the state contract.
3. The party which has received the state contract with the minutes
of disagreements shall be obliged within 30 days to consider
disagreements, take measures to adjust them with the other party and
inform this party about the acceptance of the state contract in its
wording or about the rejection of the minutes of disagreements.
In case of rejection of the minutes of disagreements or upon the
expiry of this period of time, the non-adjusted disagreements under the
state contract, the conclusion of which is mandatory for one of the
parties, may be transferred by the other party for the consideration by a
court of law within 30 days.
4. In case where a state contract is concluded according to the
results of the bidding for placing an order for the delivery of goods for
state needs, the state contract shall be concluded within 30 days since
the day of the bidding.
5. If the party for which the conclusion of a state contract is
obligatory evades from its conclusion, the other party shall have the
right to apply to a court of law with the demand of compelling this party
to conclude the state contract.
Article 529. The Conclusion of a Contract for Delivery of Goods for
State Needs
1. If a state contract provides for the delivery of goods by the
supplier (executor) to the buyer, defined by the state customer, under
the contracts for the delivery of goods for state needs, the state
customer shall notify within 30 days since the day of signing the state
contract the supplier (executor) and the buyer about the attachment of
the buyer to the supplier (executor).
The notification about the attachment of the buyer to the supplier
(executor), issued by the state customer in keeping with the state
contract, shall be a ground for the conclusion of a contract for the
delivery of goods for state needs.
2. The supplier (executor) shall be obliged to send the draft of the
contract for the delivery of goods for state needs to the buyer,
indicated in the notification about the attachment, within 30 days since
the day of the receipt of the notification from the state customer,
unless a different procedure for drafting a contract is stipulated by the
state contract or unless the draft of the contract is submitted by the
buyer.
3. The party which has received the draft contract for the delivery
of goods for state needs shall sign it and return one copy to the other
party within 30 days since the day of the receipt of the draft and in the
presence of disagreements over the contract terms shall draw up during
this time minutes of the disagreements and send them to the other party
together with the signed contract.
4. The party which has received the signed draft contract for the
delivery of goods for state needs with the minutes of disagreements
shall, during 30 days, consider the disagreements, take measures to
coordinate the terms and conditions of the contract with the other part
and inform the other party about the acceptance of the contract in its
wording or about the rejection of the minutes of the disagreements.
non-adjusted disagreements may be transferred by the interested party for
the consideration by the court within 30 days.
5. If the supplier (executor) evades from the conclusion of the
contract for the delivery of goods for state needs, the buyer shall have
the right to apply to a court of law with the demand for compelling the
supplier (executor) to conclude a contract on the terms of the contract
drafted by the buyer.
Article 530. The Buyer's Refusal to Conclude a Contract for the
Delivery of Goods for State Needs
1. The buyer shall have the right to refuse wholly or partially from
goods, indicated in the notification about attachment, and from the
conclusion of a contract for their delivery.
In this case, the supplier (executor) shall forthwith notify the
state customer and demand that he notify about the attachment to another
buyer.
2. Within 30 days since the day of the receipt of the notification
of the supplier (executor), the state customer shall issue a notification
about the attachment of another buyer to him or send to the supplier
(executor) a shipment warrant with an indication of the consignee of
goods, or state its consent to accept and pay for goods.
3. In case of default on the state customer's duties, provided for
by Item 2 of this Article, the supplier (executor) shall have the right
either to demand that the state customer should accept and pay for goods
or to sell goods at its discretion with the charge of reasonable expenses
incurred in their sale to the state customer.
Article 531. The Execution of the State Contract
1. In cases where in keeping with terms and conditions of the state
contract goods are delivered directly to the state customer or according
to its direction (shipment warrant) to another person (consignee), the
relations between the parties in the performance of the state contract
shall be regulated by the rules stipulated by Articles 506-523 of this
Code.
2. In cases where goods are delivered for state needs by the
consignee, indicated in the shipment warrant, the goods shall be paid for
by the state customer, unless a different procedure for payments is
envisaged by the state contract.
Article 532. Payment for Goods Under the Contract for the Delivery
of Goods for State Needs
In case of the delivery of goods to the buyers under the contracts
for the delivery of goods for state needs payment for goods shall be made
by the buyers at the prices estimated in accordance with the state
contract, unless a different procedure determining prices and payments is
stipulated by the state contract.
When the buyer pays for goods under the contract for the delivery of
goods for state needs, the state customer shall be recognized as a
guarantor of this obligation of the buyer (Articles 361-367).
Article 533. Compensation for Losses Caused in Connection with the
Execution or Dissolution of a State Contract
1. Unless otherwise stipulated by the laws on the delivery of goods
for state needs or by a state contract, the losses caused to the supplier
(executor) in connection with the execution of the state contract (Item 2
of Article 527) shall be liable to compensation by the state customer
within 30 days since the day of the transfer of goods in conformity with
the state contract.
2. In case where the losses caused to the supplier (executor) in
connection with the performance of a state contract are not compensated
in accordance with the state contract, the supplier (executor) shall have
the right to refuse to perform the state contract and demand the
compensation of the losses caused by the dissolution of the state
contract.
3. When a state contract is dissolved on the grounds referred to in
Item 2 of this Article, the supplier shall have the right to refuse to
execute the contract for the delivery of goods for state needs.
The losses caused to the buyer by such refusal of the supplier shall
be compensated by the customer.
Article 534. The Rejection by the State Customer of Goods Delivered
Under the State Contract
In cases provided for by law the state customer shall have the right
to reject wholly or partially the goods whose delivery is stipulated by
the state contract, provided that the losses caused by such rejection are
compensated to the supplier.
If the rejection by the state customer of the goods whose delivery
is provided for by the state contract has involved the cancellation or
charge of the contract for the delivery of goods for state needs, the
losses caused to the buyer by such cancellation or change shall be
compensated by the state customer.
§ 5. Sale of Agricultural Produce
Article 535. Contract of Sale of Agricultural Produce
1. Under the contract of sale of agricultural produce the agricultural producer
shall undertakes to transfer the farm products he has grown or
produced to the purveyor, the person who purchases such products for
processing or sale.
2. The rules for the contract for delivery (Articles 506-524) shall
be applicable to the relations covered by the contract of and
not regulated by the rules of this paragraph, while in cases of the
delivery of goods for state needs the rules for the contract sale of
agricultural produce for delivery
(Articles 525-534) shall be applicable.
Article 536. The Duties of the Purveyor
1. Unless otherwise stipulated by the contract of contracting, the
purveyor shall be obliged to accept farm products from the producer in
the place of their location and to ensure their delivery.
2. In case where farm products are accepted in the place of location
of the purveyor or in any other place indicated by it, the purveyor shall
have no right to refuse to accept farm products which correspond to the
terms and conditions of the contract of contracting and which have been
transferred to the purveyor in the period of time, specified by the
contract.
3. The contract of contracting may provide for the duty of the
purveyor processing farm products to return to the producer the waste of
this processing on its demand with payment at the price fixed by the
contract.
Article 537. The Duty of the Producer of Farm Products
The producer of farm products shall be obliged to transfer to the
purveyor the grown or produced farm products in the quantity and
assortment, envisaged by the contract of contracting.
Article 538. The Liability of the Producer of Farm Products
The producer of farm products which has failed to fulfil its
obligation or has fulfilled it improperly shall bear liability in the
presence of its fault.
§ 6. Power Supply
Article 539. The Contract of Power Supply
1. Under the contract of power supply the energy supplying
organization shall undertake to transmit power to the user (consumer)
through the connected up network, while the user shall undertake to pay
for accepted power, and also to observe the conditions of its
consumption, provided for by the contract, and to ensure the safety of
the operation of its electrical networks and the working order of the
devices and equipment use by it and related to the consumption of power.
2. A contract of power supply shall be concluded with the user, if
the latter has at its disposal a power receiving device meeting the
technical requirements and connected up to the networks of the energy
supplying organization and other requisite equipment, and also if the
user guarantees the accounting of the consumption of power.
3. The laws ad other legal acts on power supply, and also the
mandatory rules adopted in conformity with them, shall be applicable to
the relations covered by the contract of power supply and regulated by
this Code.
4. The rules of this paragraph shall be applicable to the relations
under an agreement for supply with electric power unless otherwise
established by a law or other legal acts.
Article 540. The Conclusion and Prolongation of the Contract of
Power Supply
1. In cases where the individual acts as a user of power for
domestic consumption under the contract of power supply, this contract
shall be deemed to be concluded since the time of the fixed actual
linking up of the user to the attached network in the statutory order.
Unless otherwise stipulated by the agreement of the parties, such
contract shall be deemed to be concluded for an indefinite period of time
and may be altered or dissolved on the grounds, stipulated by Article 546
of this Code.
2. The contract of power supply, concluded for an indefinite period
of time, shall be deemed to be prolonged for the same period and on the
same conditions, if before the expiry of its validity term neither party
states about its termination or alteration or the conclusion of a new
contract.
3. If one of the parties to the contract has tabled the proposal on
the conclusion of a new contract before the expiry of its validity term,
the relations between the parties shall be regulated by the contract
concluded earlier before a new contract is to be concluded.
Article 541. The Quantity of Power
1. The energy supplying organization shall be obliged to transmit
power to the user through the attached network in the quantity provided
for by the contract of power supply and with the observance of the
conditions of transmission to be agreed upon by the parties. The quantity
of power transmitted to the subscriber and the used up by him shall be
estimated in accordance with the data of accounting of its actual
consumption.
2. The contract of power supply may provide for the right of the
user to change the quantity of received power, fixed by the contract,
provided the compensation of the expenses incurred by the energy
supplying organization in connection with the transmission of power in
the quantity which is not stipulated by the contract
3. In case where the individual using power for domestic consumption
acts as a user under the contract of power supply, he shall have the
right to use power in the quantity needed by him.
Article 542. The Quality of Power
1. The quality of power transmitted shall correspond to the
requirements made by state standards and other compulsory rules or
envisaged by the contract of power supply.
2. If the energy supplying organization breaks the requirements for
the quality of power, the user shall have the right to refuse to pay for
such power. In this case, the energy supplying organization shall have
the right to demand that the user should compensate the cost of the power
which the user has saved groundlessly in consequence of the use of this
power (Item 2 of Article 1105).
Article 543. The Duties of the Buyer to Maintain and Operate
Networks, Instruments and Equipment
1. The user shall be obliged to ensure proper technical condition
and safety of the operated electric power networks, instruments and
equipment, to observe the conditions of power consumption, and also
immediately inform the energy supplying organization about accidents,
fires and troubles in energy recording instruments and about other
infringements arising during the use of energy.
2. In case where the individual using power for domestic consumption
acts as a user under the contract of power supply, the duty of ensuring
proper technical condition and safety of electric power networks, and
also of energy recording instruments shall be discharged by the energy
supplying organization, unless otherwise stipulated by the law and other
legal acts.
3. Requirements for the technical condition and operation of
electric power networks, instruments and equipment, and also the
procedure for control over their work shall be defined by the law, other
legal acts or the agreement between the parties.
Article 544. Payment for Power
1. The user shall pay for the quantity of power, actually accepted
by him, in line with the data of power recording, unless otherwise
stipulated by the law, other legal acts or the agreement of the parties.
2. Procedure for payments for energy shall be determined by the law,
other legal acts or by the agreement between the parties.
Article 545. The Subuser
The user may transmit power, accepted by it from the energy
supplying organization through the attached network, to another person
(subuser) only with the consent of the energy supplying organization.
Article 546. The Modification and Cancellation of the Contract of
Power Supply
1. In case where the individual using power for domestic consumption
acts as a user under the contract of power supply, he shall have the
right to cancel the contract unilaterally, provided he informs the energy
supplying organization about this and pays in full for the used power.
In case where the legal entity acts as a user under the contract of
power supply, the energy supplying organization shall have the right to
refuse to fulfil the contract unilaterally on the grounds provided for by
Article 523 of this Code, except for the cases established by the law or
other legal acts.
2. An interval in the supply of power, the termination or
restriction of the supply of power shall be allowed by agreement between
the parties, except for the cases where the unsatisfactory condition of
the user's power plant, certified by the state power supervision body,
endangers the levels and safety of individuals. The energy supplying
organization shall warn the user about the interruption, termination or
restriction of the supply of power.
The termination or restriction of the supply of power without the
consent of a subscriber that is a juridical person but with the relevant
notification thereof shall be permissible in a procedure established by a
law or other legal acts in the case of violation by the said subscriber
of the obligations in the payment for the power.
3. An interval in the supply of power, the termination or
restriction of the supply of power without agreement with the user and
without its appropriate warning shall be allowed whenever it is necessary
to take urgent measures of preventing or abolishing the accidents
provided the latter immediately informs the user about this.
Article 547. Liability Under the Contract of Power Supply
1. In cases of default on the obligations or of improper execution
of the obligations under the contract of power supply, the defaulting
party shall be obliged to compensate the real damage caused by this (Item
2 of Article 15).
2. If a result of the regulation of the conditions of power
consumption on the basis of the law or other legal acts an interval has
been made in the supply of the user with power, the energy supplying
organization shall bear liability for default on the contractual
obligations or for their improper fulfilment in the presence of its
fault.
Article 548. The Application of the Rules for Power Supply to Other
Contracts
1. The rules envisaged by Articles 539-547 of this Code shall be
applicable to the relations connected with the supply of thermal power
through the attached network, unless otherwise stipulated by the law or
other legal acts.
2. The rules for the contract of power supply (Article 539-547)
shall be applied to the relations involved in the supply of gas, oil and
oil products, water and other goods, unless otherwise stipulated by the
law, other legal acts or unless the contrary follows from the substance
of the obligation concerned.
§ 7. The Sale of Real Estate
Article 549. The Contract of Sale of Real Estate
1. Under the contract of sale of real estate the seller shall
undertake to transfer into the buyer's ownership a land plot, a building
or structure, an apartment or other real estate (Article 130).
2. The rules, provided for by this paragraph, shall be applied to
the sale of enterprises inasmuch as the contrary is stipulated by the
rules for the contract of sale of the enterprise (Articles 559-566).
Article 550. The Form of the Contract of Sale of Real Estate
The contract of sale of real estate shall be concluded in writing by
drawing up one document to be signed by the parties thereto (Item 2 of
Article 434).
The non-observance of the form of a contract of sale of real estate
shall invalidate it.
Article 551. State Registration of the Transfer the Title to Real
Estate
1. The transfer of the title to real estate under the contract of
sale of real estate to the buyer shall be subject to state registration.
2. Before the state registration of the transfer of the title to
property the execution of the contract of sale of real estate by the
parties shall not be a ground for the change of their relations with
third persons.
3. In case where one of the parties evades the state registration of
the transfer of the title to real estate, the court shall have the right
at the request of the other party to pass a decision on the state
registration of the transfer of the title to property. The party which
groundlessly evades the state registration of the transfer of the title
to property shall be obliged to compensate the losses of the other party,
caused by the delayed registration.
Article 552. The Rights to the Land Plot in Case of Sale of the
Building, Structure or Other Immovables Located on It
1. Under the contract of sale of the building, structure or other
immovables the buyer shall receive together with the transferred title to
such real estate that part of the land plot which is occupied with this
real estate and is necessary for its use.
2. In case where the seller is the owner of the land plot on which
the sold real estate is to be found, the buyer shall receive the right of
property or the right of lease or any other right to the corresponding
part of the land plot, specified by the contract of sale of real estate.
If the contract fails to define the right to the corresponding land
plot, transferred to the buyer of real estate, the right to that part of
the land plot that is occupied with immovables and is necessary for their
use shall pass to the buyer.
3. The sale of immovables located on the land plot which does not
belong to the seller by right of ownership shall be allowed without the
consent of the owner of this land plot, unless this contradicts the terms
of the use of such land plot, established by the law or the contract.
In case of sale of such real estate the buyer shall acquire the
right to the use of the corresponding part of the land plot on the same
conditions as the seller of the real estate does.
Article 553. The Rights to Real Estate in Case of Sale of a Land
Plot
In cases where the land plot on which the building, structure or
other immovables owned by the seller are to be found is sold, without its
transfer into the ownership of the buyer of this real estate, the seller
shall retain the right of using the part of the land plot which is
occupied with immovables and is necessary for their use on the terms to
be defined by the contract of sale.
If the terms of the use of the corresponding part of the land plot
has not been defined by the contract of its sale, the seller shall retain
the right of the restricted use (servitude) of that part of the land plot
which is occupied with immovables and is necessary for their use in
keeping with their purpose.
Article 554. The Definition of the Subject-matter in the Contract of
Sale of Real Estate
The contract of sale of real estate shall indicate the data that
make it possible to ascertain real estate subject to the transfer to the
buyer under the contract, including the data which determine the location
of real estate on the corresponding land plot or within other real
estate.
In the absence of these data in the contract the condition on the
real estate subject to transfer shall be deemed not to be agreed upon by
the parties thereto and the corresponding contract shall be deemed not to
be concluded.
Article 555. Price in the Contract of Sale of Real Estate
1. The contract of sale of real estate provide for the price of this
estate.
In the absence in the contract of the price clause, agreed upon by
the parties thereto in written form, the contract of sale of real estate
shall be deemed not to be concluded. In this case, the rules for fixing
price, envisaged by Item 3 of Article 424 of this Code shall not be
applied.
2. Unless otherwise stipulated by the law or the contract of sale of
real estate, the price fixed in it for the building, structure or other
real estate to be found on the land plot shall include the price of the
corresponding part of the land plot, transferred with this real estate or
the right to it.
3. In cases where the price of real estate in the contract of sale
of real estate is fixed per unit of its square or per other indicator of
its size, the total price of such real estate subject to payment shall
be estimated by proceeding from the actual size of the real estate
transferred to the buyer.
Article 556. The Transfer of Real Estate
1. Real estate shall be transferred by the seller and accepted by
the buyer on the basis of the deed of conveyance or other document on its
transfer.
Unless otherwise stipulated by the law or the contract, the
obligation of the seller to transfer real estate to the buyer shall be
deemed to be executed after this real estate is handed in to the buyer
and after the parties sign the respective document on the transfer.
The evasion by one of the parties from the signing of the document
on the transfer of real estate on the terms and conditions of the
contract shall be deemed to imply the refusal of the seller to discharge
the duty of transferring real estate and that of the buyer to fulfil the
duty of accepting such estate.
2. The acceptance by the buyer of real estate which does not comply
with the terms and conditions of the contract of sale of real estate,
including in case when such non-conformity is specified in the document
on the transfer of real estate, shall not be a ground for the release of
the seller from the liability for improper performance of the contract.
Article 557. The Consequences of the Transfer of Real Estate of
Inadequate Quality
In case of the transfer by the seller to the buyer of real estate of
inadequate quality, which does not comply with the terms and conditions
of the contract of sale of real estate on its quality, the rules of
Article 475 of this Code shall be applied, exception being made for the
provisions dealing with the right of the buyer to demand the substitution
of goods conforming to the contract for goods of improper quality.
Article 558. Specific Aspects of the Sale of Living Accommodation
1. The list of the persons who retain the statutory right of using
the living accommodation after it was acquired by the buyer with an
indication of their right to use the dwelling being sold shall be a
substantial condition of the contract of sale of a dwelling house or
apartment, part of the dwelling house or the apartment.
2. The contract of sale of a dwelling house or apartment, part of
the dwelling house or the apartment shall be subject to state
registration and shall be deemed to be concluded since the time of such
registration.
§ 8. The Sale of Enterprises
Article 559. The Contract of Sale of the Enterprise
1. Under the contract of sale of the enterprise the seller shall
undertake to transfer into the buyer's ownership the enterprise as a
whole as a property complex (Article 132) with the exception of the
rights and duties which the seller has no right to hand over to other
persons.
2. The rights to the firm's name, trademark, service mark and other
means of individualization of the seller and its goods, works or
services, and also the rights to the use of such means of
individualization belonging to it on the basis of a license shall pass to
the buyer, unless otherwise stipulated by the contract.
3. The rights of the seller, received by it on the basis of the
permit (license) for the engagement in the respective activity, shall not
belong to the transfer to the buyer, unless otherwise stipulated by the
law or other legal acts. The transfer to the buyer of the enterprise's
obligations which it is impossible to execute in the absence of such
permit (license) for it shall not absolve the seller from the
corresponding obligations to the creditors. For default on such
obligations the seller and the buyer shall bear joint and several
liability to the creditors.
Article 560. The Form and the State Registration of the Contract of
Sale of the Enterprise
1. The contract of sale of the enterprise shall be concluded in
writing by drawing up one document to be signed by the parties thereto
(Item 2 of Article 434) with the obligatory addendum to it of the
documents, referred to in Item 2 of Article 561 of this Code.
2. The non-observance of the form of the contract of sale of the
enterprise shall involve its invalidity.
3. The contract of sale of the enterprise shall be subject to state
registration and shall be deemed to be concluded since the time of such
registration.
Article 561. Certification of the Structure of the Enterprise to Be
Sold
1. The structure and cost of the enterprise to be sold shall be
determined by the contract of sale of the enterprise on the basis of its
full inventory making, which is carried out in accordance with the rules
of such inventorying.
2. Prior to the signing of a contract of sale of the enterprise, the
parties thereto shall consider the inventorying certificate, the
balance-sheet, the opinion of an independent auditor on the structure and
cost of the enterprise, and also the list of all debts (liabilities),
included in the structure of the enterprise with an indication of
creditors and of the character, amount and terms of their claims.
The property, rights and duties, referred to in said documents,
shall be subjects to the transfer by the seller to the buyer, unless the
contrary follows from the rules of Article 559 of this Code and unless
established by the agreement of the parties.
Article 562. The Rights of Creditors in the Sale of the Enterprise
1. For liabilities, included in the composition of the enterprise to
be sold, the creditors shall be notified before it is transferred to the
buyer about its sale by one of the parties to the contract of sale of the
enterprise.
2. The creditor who has not informed the seller or the buyer about
his consent with the transfer of the debt shall have the right to demand,
during three months since the day of the receipt of the notice about the
sale of the enterprise, either the termination or the prior execution of
the obligation and compensation by the seller of the losses caused by
this, or the recognition of the contract of sale of the enterprise as
invalid in full or in the respective part.
3. The creditor who has not been notified about the ale of the
enterprise in the order, prescribed by Item 1 of this Article, may bring
an action to satisfy the claims, provided for by Item 2 of this Article,
during the year since the day when he learnt or should have learnt about
the transfer of the enterprise by the seller to the buyer.
4. After the transfer of the enterprise to the buyer the seller and
the buyer shall bear joint and several liability for the debts included
in the composition of the transferred enterprise and converted to the
buyer without the consent of the creditor.
Article 563. The Transfer of the Enterprise
1. The enterprise shall be transferred by the seller to the buyer
under the deed of conveyance, which contains the data on the structure of
the enterprise and on the notification of the creditors about the sale of
the enterprise, and also information about the revealed shortcomings of
the transferred property and the list of assets, the duty of whose
transfer have not been discharged by the seller in view of their loss.
The preparation of the enterprise for conveyance, including the
drawing up of a deed of conveyance and the presentation of this act for
signing shall the duty of the seller and shall be effected at his
expense, unless otherwise stipulated by the contract.
2. The enterprise shall be deemed to be transferred to the buyer
since the day of signing the deed of conveyance by both parties.
Since this time the risk of accidental destruction or damage of
property within the enterprise shall pass to the buyer.
Article 564. The Transfer of the Title to the Enterprise
1. The title to the enterprise shall pass to the buyer since the
time of state registration of this title.
2. Unless otherwise stipulated by the contract of sale of the
enterprise, the title to the enterprise shall pass to the buyer and shall
be subject to state registration immediately after the conveyance of the
enterprise to the buyer (Article 563).
3. In cases where the contract provides for the preservation of the
seller's title to the enterprise, transferred to the buyer, until the
payment for the enterprise or the onset of other circumstances, the buyer
shall have the right to dispose, before the transfer of the title to it,
of the assets and rights forming the composition of the transferred
enterprise to the extent this is necessary for the purposes for which the
enterprise has been acquired.
Article 565. The Consequences of the Transfer and Acceptance of the
Enterprise with Shortcomings
1. Consequences of the transfer by the seller and of the acceptance
by the buyer under the deed of conveyance of the enterprise whose
structure does not conform, in particular, to the quality of the
transferred assets, specified by the contract of sale of the enterprise,
shall be determined on the basis of the rules in Articles 460-462, 466,
469, 475 and 479 of this Code, unless otherwise stipulated by the
contract and Items 2-4 of this Article.
2. In case where the enterprise has been transferred and accepted
under the deed of conveyance, which contains information about the
disclosed shortcomings of the enterprise and the lost assets (Item 1 of
Article 563), the buyer shall have the right to demand a corresponding
reduction of the purchase price of the enterprise, unless the right to
make other claims in such cases is provided for by the contract of sale
of the enterprise.
3. The buyer shall have the right to demand the reduction of the
purchase price in case of the transfer of the debts (liabilities) of the
seller within the composition of the enterprise, which have not been
indicated in the contract of sale of the enterprise or in the deed of
conveyance, unless the seller proves that the buyer has known about such
debts (liabilities) during the conclusion of the contract and the
transfer of the enterprise.
4. In case of receipt of the buyer's notice about the defects of the
property transferred within the composition of the enterprise or in the
absence in this composition of particular types of property subject to
the transfer may replace without delay the property of improper quality
or present to the buyer the missing property.
5. The buyer shall have the right to demand in due course of law the
dissolution or change of the contract of sale of the enterprise and the
return of what has been executed under the contract, if it is found out
that the enterprise because of its shortcomings, for which the seller is
accountable, does not fit for the purposes named in the contract of sale,
and these shortcomings have not been removed by the seller on the
conditions and in the order and terms fixed in keeping with this Code,
other laws, other legal acts or the contract or its is impossible to
eliminate such shortcomings.
Article 566. The Application to the Contract of Sale of the
Enterprise of the Rules for the Consequences of the
Invalidation of Transactions and for the Change or
Dissolution of the Contract
The rules of this Code for the consequences of the invalidation of
transactions and for the change or the dissolution of the contract of
sale, providing for the return or the recovery of the received in kind
under the contract from one party or from both parties, shall be applied
to the contract of sale of the enterprise, id such consequences do not
violate the rights and law-protected interests of the creditors of the
seller and the buyer and other persons and do not contradict public
interests.
Chapter 31. Barter
Article 567. Barter Contract
1. Under the barter contract each party thereto shall undertake to
transfer into the ownership of the other party one commodity in exchange
for the other commodity.
2. The rules for purchase and sale (Chapter 30) shall be applied to
the barter contract, unless this contradicts the rules of this Chapter
and the essence of barter. In this case each party shall be recognized
respectively as the seller of goods which it undertakes to hand over and
as the buyer of goods which it undertakes to accept in exchange.
Article 568. Prices and Expenses Under the Barter Contract
1. Unless the contrary follows from the barter contract, goods
subject to exchange shall be assumed to be of equal value, while the
expenses on their transfer and acceptance shall be incurred in each case
by the party which bears the respective duties.
2. In case where in keeping with the barter contract the exchanged
goods are recognized as those of equal value, the party which is
duty-bound to hand over goods whose price is below the price of goods
offered in exchange shall pay the difference in the prices immediately
before or after the execution of its duty of transferring goods, unless
a different procedure of payment is provided for by the contract.
Article 569. The Reciprocal Fulfilment of the Obligation of Turning
Over Goods Under the Barter Contract
In case where in keeping with the barter contract the periods of the
transfer of exchanged goods do not coincide, the rules for the reciprocal
fulfilment of obligations (Article 328) shall be applied to the execution
of the obligation of handing over goods by the party which should pass
the goods after the transfer of the goods by the other party.
Article 570. The Transfer of the Title to Exchanged Goods
Unless the law or the barter contract provides otherwise, the title
to exchanged goods shall pass to the parties acting under the barter
contract as buyers simultaneously after the execution of the obligation
of turning over goods by both parties.
Article 571. Liability for the Withdrawal of Goods Acquired Under
the Barter Contract
The party from which the third party has withdrawn the goods
acquired under the barter contract shall have the right, in the presence
of the grounds, provided for by Article 461 of this Code, to demand that
the other party should return goods received by the latter in exchange
and/or in compensation for damages.
Chapter 32. Donation
Article 572. Donation Contract
1. Under the donation contract one party (donor) shall transfer or
undertake to transfer free of charge to the other part (donee) a thing
into ownership or property right (claim) to himself or to a third person
and release or undertake to release this party from the property
obligation to himself or to the third party.
In the presence of a reciprocal transfer of a thing or right or of a
reciprocal obligation the contract shall not be recognized as donation.
The rules provided for by Item 2 of Article 170 of this Code shall be
applied to such contract.
2. The promise of handing over any thing or property right free of
charge or of releasing anybody from property obligation (promise of
donation) shall be recognized as a donation contract and shall bind the
person who has given the promise, if the latter was made in proper form
(Item 2 of Article 574) and contains the clearly expressed intention to
transfer in future to a specific person a thing or a right free of charge
or to release him from property obligation.
The promise to donate all belongings or part of all these belongings
without reference to a specific object of donation in the form of a
thing, right or the release from obligation shall be null and void.
3. The contract stipulating the transfer of a gift to the donee
after the death of the donor shall be null and void.
The rules of civil legislation on inheritance shall be applied to
this kind of donation.
Article 573. The Donee's Refusal to Accept the Gift
1. The donee shall have the right to abandon the gift at any time
before it is handed over to him. In this case, the donation contract
shall be deemed to be dissolved.
2. If a donation contract has been concluded in writing, the
rejection of the gift shall also be made in writing. In case where the
donation contract has been registered (Item 3 of Article 574), the
rejection of the gift shall also be subject to state registration.
3. If a donation contract has been concluded in writing, the donor
shall have the right to demand that the donee should compensate for the
real damage inflicted by the refusal to accept the gift.
Article 574. The Form of the Donation Contract
1. Donation, accompanied by the transfer of the gift to the donee,
may be accomplished orally, except for the cases, provided for by Items 2
and 3 of this Article.
The gift shall be presented by handing order, symbolic transfer
(delivery of keys, etc.) or delivery of law-making documents.
2. The contract of donation of movables shall be made in writing in
cases when:
the donor is represented by a legal entity and the value of the gift
exceeds the statutory five-fold amounts of the minimum wages or salaries;
the contract contains the promise of donation in the future.
In cases provided for by this Item the donation contract made orally
shall be null and void.
3. The donation contract of real estate shall be subject to state
registration.
Article 575. Ban of Donation
It shall be impermissible to donate gifts, except for common gifts,
whose value does not exceed the statutory five-fold amounts of the
minimum wages or salaries:
1) on behalf of minors and legally unfit individuals and by their
legal representatives;
2) to the workers of medical treatment, educational, social
protection and other similar institutions by individuals who are treated,
maintained or educated by them, and by spouses and relatives of these
persons;
3) to civil servants and employees of municipal bodies in connection
with their official status or the discharge of their official duties;
4) in relations between profit-making organizations.
Article 576. The Restriction of Donation
1. The legal entity owning a thing by right of economic or operative
management shall have the right to donate it with the consent of the
owner, unless otherwise stipulated by law. This restriction shall not
extend to usual gifts of small value.
2. Property held in common joint ownership may be donated by
agreement of all those who have a stake in joint ownership with the
observance of the rules, specified by Article 253 of this Code.
3. The donor's right to make claims to a third party shall be
donated with the observance of the rules, stipulated by Articles
382-386, 388 and 389 of this Code.
4. Donation by means of the execution of the donee's duty to a third
party shall be effected with the observance of the rules, provided for by
Item 1 of Article 313 of this Code.
Donation by means of the transfer by the donor of the donee's debt
to a third party shall be effected with the observance of the rules,
specified by Articles 391 and 392 of this Code.
5. A power of attorney for the execution of donation by the
representative, in which a donee is not named and an object of donation
is not indicated, shall be null and void.
Article 577. The Refusal to Execute the Donation Contract
1. The donor shall have the right to refuse to execute the contract
containing the promise of handing over a thing or a right to the donee in
the future or to release the donee from property obligation; if after the
conclusion of the contract the property or family status or the state of
health of the donor has changed so much that the execution of the
contract will lead under new conditions to a substantial reduction of his
standard of life.
2. The donor shall have the right to refuse to execute the contract
containing the promise of giving a thing or a right to the donee in the
future or to release the donee from property obligation on the grounds
that entitle him to revoke donation (Item 1 of Article 578).
3. The refusal of the donor to execute the donation contract on the
grounds, stipulated by Items 1 and 2 of this Article, shall not entitle
the donee to claim damages.
Article 578. The Revocation of Donation
1. The donor shall have the right to revoke donation, if the donee
has committed an attempt on his life, the life of any of his family
members or close relatives or has committed deliberately a bodily injury
to the donor.
In case of the intentional homicide of the donor by the donee the
right to claim in court the revocation of donation shall belong to the
donor's heirs.
2. The donor shall have the right to demand judicially the
revocation of donation, if the donee's treatment of the gift which has a
great intangible value for the donor creates a threat of its irrevocable
loss.
3. At the request of the interested person the court of law may
revoke the donation of the individual businessman or the legal entity in
violation of the provisions of the law on insolvency (bankruptcy) from
the pecuniary means, associated with his business, during six months that
preceded the declaration of this person as insolvent (bankrupt).
4. The donation contract may specify the donor's right to revoke
donation, if he outlives the donee.
5. In case of revocation of donation the donee shall be obliged to
return the gift, if the latter had been preserved in kind by the time of
the revocation of donation.
Article 579. Cases in Which the Refusal to Execute the Donation
Contract and the Revocation of Donation Are Impossible
The rules for the refusal to execute the donation contract (Article
577) and for the revocation of donation (Article 578) shall not be
applied to common gifts of small value.
Article 580. The Consequences of the Infliction of Damage Owing to
the Defects of the Gift
The injury inflicted on the donee's life or health and property tort
owing to the defects of the gift shall be subject to indemnity by the
donor in keeping with the rules, provided for by Chapter 59 of this Code,
if it is proved that these defects had arisen before the transfer of the
donated thing to the donee, that they do not relate to obvious
shortcomings and the donor did not warn the donee about them, though he
had known about them.
Article 581. Legal Succession in Case of a Promise of Donation
1. The rights of the donee to whom a gift has been promised under
the donation contract shall not be passed to his heirs (successors),
unless otherwise stipulated by the donation contract.
2. The duties of the donor who has promised donation shall pass to
his heirs (successors), unless otherwise stipulated by the donation
contract.
Article 582. Endowment
1. The donation of a thing or right for general useful purposes
shall be recognized as endowment.
Endowment may be made to individuals, medical treatment and
instructional institutions, social protection institutions and other
similar institutions, charitable and scientific institutions and
educational establishments, funds, museums and other cultural
institutions, public associations and religious organizations, and also
to the State and other subjects of civil law, referred to in Article 124
of this Code.
2. No permission or consent shall be required for the acceptance of
an endowment.
3. The endowment of property to an individual shall be conditioned
by the donor, while the endowment of property to a legal entity may be
conditioned by him by the use of this property according to a definite
purpose. In the absence of such condition the endowment of property to an
individual shall be regarded as donation, while in other cases the
endowed property shall be used by the donee in keeping with the
designation of property.
The legal entity which accepts the endowment to be used for a
definite purpose shall keep a separate record of all transactions
involved in the use of the endowed property.
4. If it is impossible to use the endowed property in accordance
with the purpose indicated by the donor due to the changed circumstances,
it may be used according to another purpose only with the consent of the
donor, while in cases of the death of the donor-individual or of the
liquidation of the legal entity only with the consent of the donor and by
a court decision.
5. The use of endowed property out of accordance with the purpose
indicated by the donor or the change of this purpose with the
contravention of the rules, provided for by Item 4 of this Article, shall
entitle the donor, his heirs or any other successor to demand the
revocation of the endowment.
6. Articles 578 and 581 of this Code shall not be applied to
endowment.
Chapter 33. Rent and Life Maintenance with Dependence
§ 1. General Provisions on Rent and Life
Maintenance with Dependence
Article 583. The Rent Contract
1. Under the rent contract one party (rent recipient) shall transfer
property to the other party (rent payer) into his ownership, whereas the
rent payer shall undertake to pay periodically rent to the recipient in
the form of a definite sum of money or to provide money on his
maintenance in a different form in exchange for the received property.
2. Under the rent contract it is possible to provide for the duty of
paying rent on a permanent basis (permanent rent) or for the entire
period of life of the rent recipient (life annuity). Life annuity may be
established on the terms of the life maintenance of an individual with
dependence.
Article 584. The Form of the Rent Contract
The rent contract shall be subject to notarization, whereas the
contract providing for the alienation of real estate on the disbursement
of rent shall also be subject to state registration.
Article 585. Alienation of Property on Rent Disbursement
1. Property to be alienated on rent disbursement may be turned over
by the rent recipient for the ownership of the rent payer for charge or
free of charge.
2. In case where the rent contract provides for the transfer of
property for charge, the rules for purchase and sale (Chapter 30) shall
be applied to the relations of the parties involved in transfer and
payment, and in case where such property is transferred free of charge,
the rules for the donation contract (Chapter 32) shall be applied
inasmuch as the rules of this Chapter stipulate otherwise and do not
contradict the substance of the rent contract.
Article 586. Encumbrance of Real Estate with Rent
1. The rent shall encumber the land plot, enterprise, building,
structure or any other real estate, transferred on its payments. In case
of alienation of such property by the rent payer, his obligations under
the rent contract shall pass on the acquirer of property.
2. The person who transferred real estate encumbered with rent for
the ownership of another person shall bear together with him subsidiary
liability (Article 399) on the demands of the rent recipient which have
arisen in connection with the violation of the rent contract unless the
present Code, other law or contract provide joint and several
responsibility under this liability.
Article 587. Security for Rent Payment
1. In case of transfer of a land plot or any other immovable
property on rent payment the rent recipient shall acquire the right of
pledge to this property as security for the rent payer's obligation.
2. The clause establishing the duty of the rent payer to present
security for the discharge of his obligations (Article 329) or to ensure
the risk of liability in favour of the rent recipient for default on
these obligations or for their improper discharge shall be the essential
condition of the contract stipulating the transfer of a pecuniary sum or
other movable assets.
3. In case of default by the rent payer on the obligations, provided
for by Item 2 of this Article, and also in case of loss of security or
the deterioration of its conditions due to the circumstances for which
the rent recipient is not answerable, the rent recipient shall have the
right to dissolve the rent contract and claim damages caused by the
dissolution of the contract.
Article 588. Liability for Delayed Rent Payment
For delayed rent payment the rent payer shall pay to the recipient
interest, stipulated by Article 395 of this Code, unless a different
amount of interest is specified by the rent contract.
§ 2. Permanent Rent
Article 589. Permanent Rent Recipient
1. Only individuals, and also non-profit organizations may be the
permanent rent recipient, unless this contradicts the law and if this
corresponds to the aims of their activity.
2. The rights of the rent recipient may be transferred under the
permanent rent contract to the persons, referred to in Item 1 of this
Article, by means of assignment of a claim and descend by inheritance or
by way of legal succession in case of the reorganization of legal
entities, unless otherwise stipulated by the law or the contract.
Article 590. The Form and Amount of Permanent Rent
1. Permanent rent shall be paid out in money terms in the amount
fixed by the contract.
The permanent rent contract may provide for the payment of rent by
presenting things, performing works or rendering services that correspond
to the pecuniary sum of the rent in value terms.
2. Unless otherwise stipulated by the permanent rent contract, the
amount of the paid rent shall rise in proportion to the increase in the
statutory minimum wages or salaries.
Article 591. The Dates of Permanent Rent Payment
Unless otherwise stipulated by the permanent rent contract,
permanent rent shall be paid out upon the end of each calendar quarter.
Article 592. The Payer's Right to Permanent Rent Redemption
1. The payer of permanent rent shall have the right to refuse to
make the further disbursement of rent by means of its redemption.
2. Such refusal shall be valid, provided that it has been made by
the rent payer in written form within three months before the cessation
of the payment of rent or for longer periods fixed by the permanent rent
contract. In this case, the obligation of rent payment shall not
terminate until the receipt of the entire sum of redemption by the rent
recipient, unless a different redemption procedure is stipulated by the
contract.
3. The condition of the permanent rent contract concerning the rent
payer's refusal to use the right of redemption shall be null and void.
The contract may stipulate that the right to the permanent rent
redemption may not be exercised during the lifetime of the rent recipient
or during different periods that do not exceed 30 years since the
conclusion of the contract.
Article 593. The Redemption of Permanent Rent on the Demand of the
Rent Recipient
The permanent rent recipient shall have the right to demand the
redemption of rent by the payer in the cases when:
the rent payer has delayed its payment for more than one year,
unless otherwise stipulated by the permanent rent contract;
the rent payer has breaches his obligations of security rent payment
(Article 587);
the rent payer has been recognized as insolvent or other
circumstances have appeared to testify patently to the fact that rent
will not be paid out by him in the amount and in the period of time fixed
by the contract;
real estate, transferred against the rent payment, has replenished
common property or has been divided among several persons;
in other cases specified by the contract.
Article 594. Redemption Price of Permanent Rent
1. Redemption of permanent price in cases, provided for by Articles
592 and 593 of this Code, shall be effected at the price fixed by the
permanent rent contract.
2. In the absence of a clause on redemption price in the permanent
rent contract, under which property has been transferred for charge on
payment of permanent rent, redemption shall be made at the price that
corresponds to the annual sum of rent subject to payment.
3. In the absence of a clause on redemption price in the permanent
rent contract, under which property has been transferred for rent payment
free of charge, redemption price shall include in addition to the annual
sum of rental payments the price of the transferred property to be
determined according to the rules, provided for by Item 3 of Article 424
of this Code.
Article 595. Risk of Accidental Destruction of Property Transferred
on Payment of Permanent Rent
1. The risk of accidental destruction or accidental damage of the
property, transferred free of charge on payment of permanent rent, shall
be borne by the rent payer.
2. In case of accidental destruction or accidental damage of the
property, transferred for charge on payment of permanent rent, the payer
shall have the right to demand accordingly the cessation of the
obligation of rent payment or the charge of the conditions of its
payment.
§ 3. Life Annuity
Article 596. Life Annuity Recipient
1. Life annuity may be established for the period of life of the
individual who conveys property on rent payment or for the period of life
of another individual indicated by the former individual.
2. It shall be permissible to introduce life annuity in favour of
some individuals whose shares in the right to receive rent are regarded
as equal, unless otherwise stipulated by the life annuity contract.
In case of death of one of the rent recipients his share in the
right to rent shall pass to the rent recipients who outlived him, unless
the life annuity contract provides otherwise, and in case of death of the
last recipient the rent payment obligation shall cease.
3. The contract establishing a life annuity in favour of the
individual who had died by the time of concluding the contract shall be
null and void.
Article 597. The Amount of Life Annuity
1. Life annuity shall be defined by the contract as a sum of money
periodically paid out to the rent recipient during his life.
2. The amount of life annuity, defined in the contract, shall be per
month not less than the minimum amount of the wage or salary, established
by the law and in cases, provided for by Article 318 of this Code, shall
be subject to increase.
Article 598. Dates of Payment of Life Annuity
Unless otherwise stipulated by the life annuity contract, life
annuity shall be paid out at the end of each calendar month.
Article 599. The Cancellation of the Life Annuity Contract on the
Demand of the Rent Recipient
1. In case of essential violation of the life annuity contract by
the rent payer, the rent recipient shall have the right to demand that
the rent payer redeem rent on the terms, provided for by Article 594 of
this Code, or cancel the contract and claim for compensation.
2. If an apartment, dwelling house or any other property has been
alienated free of charge on payment of life annuity, the rent recipient
shall have the right to demand this property in case of the substantial
violation of the contract by the rent payer with the offset against its
value on account of the redemption price of rent.
Article 600. Risk of Accidental Destruction of Property Transferred
in Payment for Life Annuity
The accidental destruction or the accidental damage of the property
transferred in payment for life annuity shall not absolve the rent payer
from the obligation to pay it on the terms, provided for by the life
annuity contract.
§ 4. Life Maintenance with Dependency
Article 601. The Contract of Life Maintenance with Dependency
1. Under the contract of life maintenance with dependency the rent
recipient-individual shall transfer the dwelling house, apartment or
land plot he owns or any other real estate into the ownership of the rent
payer, who undertakes to carry on life maintenance with the dependency of
the individual and/or the third person (persons) indicated by him.
2. The rules for life maintenance shall be applicable to the
contract of life maintenance with dependency, unless otherwise stipulated
by the rules of this paragraph.
Article 602. The Duty of Providing Maintenance with Dependency
1. The duty by the rent payer to provide the maintenance with
dependency may include the satisfaction of needs in a dwelling, food and
clothing, and if this is required by the individual's state of health,
also the care of him. The contract of life maintenance with dependency
may also provide for the payment of funeral services.
2. The contract of life maintenance with dependency shall estimate
the value of the entire scope of maintenance with dependency. In this
case, the value of the whole scope of monthly maintenance may not be less
than two minimum amounts of statutory wages or salaries.
3. In settling the dispute between the parties over the scope of
maintenance to be provided to an individual the court of law shall be
guided by the principles of integrity and reasonableness.
Article 603. Replacement of Life Maintenance by Periodical Payments
The contract of life maintenance with dependency may provide for
possible replacement of the provision of maintenance with dependency in
kind with periodical monetary payments during the life of the individual.
Article 604. Alienation and Use of Property Transferred for Life
Maintenance
The rent payer shall have the right to alienate, put in pledge or in
any other way encumber real estate, transferred to him as security of
life maintenance, only with the preliminary consent of the rent
recipient.
The rent payer shall be obliged to take necessary measures so that
the use of said property during the period of the provision of life
maintenance with dependency should not reduce the value of this property.
Article 605. The Termination of Life Maintenance with Dependency
1. The obligation of life maintenance with dependency shall cease
with the death of the rent recipient.
2. In case of substantial breach by the rent payer of his
obligations the rent recipient shall have the right to demand the return
of real estate, transferred as security of life maintenance or the
disbursement of redemption price on the terms, prescribed by Article 594
of this Code. In this case, the rent payer shall not have the right to
claim the compensation for the expenses incurred in connection with the
maintenance of the rent recipient.
Chapter 34. Lease
§ 1. General Provisions on Lease
Article 606. 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.
Fruit, produce and income received by the leaseholder as a result of
leased property in keeping with the agreement shall be his property.
Article 607. Objects of Lease
1. Land plots and other separate natural objects, enterprises and
other property complexes, buildings, structures, equipment, transport
vehicles and other things, which do not forfeit their natural properties
in the process of their use (non-consumed things) may be let on lease.
The law may institute types of property which cannot be let on lease
or can be leased with restriction.
2. The law may establish specific aspects of the lease of land plots
and other separate natural objects.
3. The lease agreement shall indicate data that make it possible to
ascertain definitely property subject to the transfer to the leaseholder
as an object of lease. In the absence of these data in the agreement the
clause on the object subject to lease shall be deemed to not agreed upon
by the parties, and the appropriate agreement shall not be regarded as
concluded.
Article 608. Lessor
The right of leasing property shall belong to its owner. Lessors may
also be represented by the persons who are authorized by law or by the
owner to let property on lease.
Article 609. The Form and State Registration of the Lease Agreement
1. The lease agreement for a term of over one year shall be
concluded in writing, and if at least one of the party is represented by
a legal entity the lease agreement shall be concluded in writing,
regardless of its term.
2. The agreement for lease of real estate shall be subject to state
registration, unless otherwise stipulated by law.
3. The agreement for lease of property that provides for the
transfer of the title to this property to the leaseholder (Article 624)
shall be concluded in the form stipulated for the contract of sale of
such property.
Article 610. The Validity Term of the Lease Agreement
1. The lease agreement shall be concluded for a term to be defined
by the agreement.
2. If the period of lease is not defined by the agreement, the lease
agreement shall be deemed to be concluded for an indefinite period.
In this case, each party shall have the right to recede at any time
from the agreement by warning the other party one month before schedule
and in case of real estate lease - three months before schedule. The law
may fix a different period for warning that the lease agreement,
concluded for an indefinite term, ceases to be valid.
3. The law may provide for a maximum period (deadline) of the
agreement for particular types of lease, and also for the lease of
particular types of property. In these cases, if the term of the lease is
not fixed by the agreement and neither party has receded from it before
the expiry of the maximum period, fixed by the law, the agreement shall
cease to operate upon the expiry of the deadline.
The lease agreement concluded for a term exceeding the statutory
maximum period shall be deemed to be concluded for a term equal to the
time-limit.
Article 611. The Supply of Property to the Leaseholder
1. The lessor shall be obliged to supply property to the leaseholder
in the state meeting the terms and conditions of the lease agreement and
the purpose of property.
2. Property shall be let on lease together with all its accessories
and related documents (technical certificate, quality certificate, etc.),
unless otherwise stipulated by the agreement.
If such accessories and documents have not been handed over, the
leaseholder may not use property in accordance with its designation or is
largely deprived of those assets on which he had the right to count when
he concluded the agreement and he may claim for the supply of such
accessories and documents by the lessor or for the cancellation of the
agreement, and also for compensation of losses.
3. If the lessor has failed to furnish to the leaseholder the leased
property within the period fixed in the agreement or within the
reasonable period when the agreement does not indicate such period, the
leaseholder shall have the right to reclaim this property from him in
keeping with Article 398 of this Code and claim damages caused by delayed
execution or to demand the dissolution of the agreement and to claim
damages caused by its non-execution.
Article 612. The Liability of the Lessor for Defects of the Leased
Property
1. The lessor shall be answerable for the defects of leased property
which prevent in full or in part to its use, if even during the
conclusion of the contract he did not know about these defects.
In case of discovery of such defects the leaseholder shall have the
right at his option:
the demand that the lessor should either remove free of charge the
defects of property or reduce proportionately the rental payment, or
indemnify his expenses on the removal of the defects of property;
to deduct directly the sum of the expenses incurred in the removal
of these defects from the rental payment by notifying the lessor about
this in advance;
to demand the anticipatory dissolution of the contract.
The lessor, who is notified about the leaseholder's claims or about
his intention to eliminate the defects of property at the expense of the
lessor, may replace without delay the property granted to the leaseholder
by other similar property in a proper state or remove its defects free of
charge.
If the satisfaction of the leaseholder's claims or the deduction by
him of the expenses on the removal of the defects from the rental payment
does not cover the losses caused to the leaseholder, he shall have the
right to demand the reparation of the uncovered part of the losses.
2. The lessor shall not be liable for the defects of the leased
property which have been specified by him during the conclusion of the
lease agreement or had been known to the leaseholder beforehand or should
have been discovered by the leaseholder during the inspection of the
property or the verification of its good condition during the conclusion
of the agreement or the granting of property on lease.
Article 613. The Rights of Third Parties to the Leased Property
The lease of property shall not be a ground for the termination or
charge of the rights of third parties to this property.
During the conclusion of a lease agreement the lessor shall be
obliged to warn the leaseholder about all the rights of third parties to
the leased property (servitude, right of pledge, etc.). Default by the
lessor on this duty shall entitle the leaseholder to demand a reduction
in the rental payment or to dissolve the agreement and compensate for the
losses.
Article 614. Rental Payment
1. The leaseholder shall be obliged to make a charge for the use of
property (rental payment) in due time.
Procedure, conditions and terms of making the rental payment shall
be determined by the lease agreement. In case where the agreement does
not determine the procedure, conditions and terms of making the rental
payment, it shall be held that the procedure, conditions and terms are
usually applied in the lease of similar property under comparable
circumstances.
2. The rental payment shall be introduced for the leased property as
a while or for each component in the form:
1) the fixed sum of payments made periodically or in a lump;
2) the established share of products, fruits or incomes obtained as
a result of the use of leased property;
3) definite services rendered by the leaseholder;
4) the transfer by the leaseholder to the lessor of the thing
specified by the contract for ownership or lease;
5) the payment by the leaseholder of the costs stipulated by the
agreement for the improvement of leased property.
In the lease agreement the parties thereto may provide for the
combination of said forms of the rental payment or for other forms of
lease payment.
3. Unless otherwise stipulated by the agreement, the amount of the
rental payment may be changed by agreement of the parties in the periods,
provided for by the agreement, but at least once in a year. The law may
envisage other minimum terms of the review of the amount of the rental
payment for particular types of lease, and also for the lease of
particular types of property.
4. Unless the law provides for otherwise, the leaseholder shall have
the right to demand a corresponding reduction of the rental payment, if
in view of the circumstances for which he is not answerable, the
conditions of the use, specified by the lease agreement, or the state of
property have deteriorated substantially.
5. Unless otherwise stipulated by the lease agreement, in case the
leaseholder has substantially violated the terms of making the rental
payment, the lessor shall have the right to demand that he should make
the rental payment short of the term in the period fixed by the lessor.
In this case. the lessor shall not have the right to demand an
anticipatory payment of the rental for more than two terms in succession.
Article 615. The Use of Leased Property
1. The leaseholder shall be obliged to make use of leased property
in accordance with the terms and conditions of the lease agreement, and
if such terms and conditions in the agreement have not been defined, in
accordance with the purpose of property.
2. The leaseholder shall have the right to let the leased property
in sub-tenancy with the consent of the lessor and to transfer his rights
and duties under the lease agreement to another person (transfer of
lease), to place the leased property in gratuitous use, and also to put
the leasehold interests in pledge and to introduce them as a contribution
to the authorized capital of economic partnerships and societies or as a
share to the producer cooperative, unless otherwise stipulated by this
Code, other law or other legal acts. In said cases, with the exception of
the transfer of lease, the leaseholder shall remain to be liable under
the agreement to the lessor.
A sublease contract may not be concluded for the term exceeding the
term of the lease agreement.
The rules for lease agreements shall be applied to the sublease
contracts, unless otherwise stipulated by the law or other legal acts.
3. If the leaseholder makes use of property out of accordance with
the terms and conditions of the lease agreement and the purpose of
property, the lessor shall have the right to demand the dissolution of
the agreement and claim damages.
Article 616. The Duty of the Parties to Maintain Leased Property
1. The lessor shall be obliged to carry out the overhaul of leased
property at his expense, unless otherwise stipulated by the law, other
legal acts or the lease agreement.
An overhaul shall be carried out on time, fixed by the agreement,
and if it is not provided for by the agreement or is caused by urgent
necessity, it shall be carried out within the reasonable period.
The breach by the lessor of the duty of making an overhaul shall
entitle the leaseholder to implement the following measures at his
option:
to carry out the overhaul, specified by the agreement or caused by
urgent necessity and to exact from the lessor the cost of the overhaul or
to count towards the rental payment;
to demand a corresponding reduction of the rental payment;
to demand the dissolution of the agreement and to claim damages.
2. The leaseholder shall be obliged to maintain property in good
condition, to carry out an overhaul at his own expense and incur expenses
on the maintenance of property, unless otherwise stipulated by the law or
the lease agreement.
Article 617. The Preservation of the Lease Agreement in Force in
Case of the Change of the Parties Thereto
1. The transfer of the right of ownership (economic management,
operative management, life inheritable possession) of leased property to
another person shall not be a ground for the alteration or dissolution of
the lease agreement.
2. In case of death of the individual who leases real estate, his
rights and duties shall pass to the heir under the lease agreement,
unless otherwise stipulated by the law or the agreement.
The lessor shall have no right to refuse such heir to enter in the
agreement for the remaining term of its validity, except for the case
when its conclusion was conditioned by the leaseholder's personal
qualities.
Article 618. The Termination of the Sublease Contract in Case of the
Anticipatory Cessation of the Lease Agreement
1. Unless otherwise stipulated by the lease agreement, the
anticipatory cessation of the lease agreement shall involve the
termination of the sublease contract concluded in accordance with the
agreement. In this case the subleaseholder shall have the right to
conclude a lease agreement on the property used by him in keeping with
the sublease contract within the remaining period of sublease on the
terms and conditions that correspond to those of the ceased lease
agreement.
2. If the lease agreement is null and void on the grounds, provided
for by this Code, the sublease contract concluded in conformity with it
shall also be null and void.
Article 619. Early Rescission of the Lease Agreement on
Demand of the Lessor
At the request of the lessor the lease agreement may be dissolved by
a court of law short of the term in cases when the leaseholder:
1) makes use of property with the substantial violation of the terms
and conditions of the agreement or of the purpose of property, or with
repeated breaches;
2) substantially deteriorates property;
3) fails to make a rental payment for more than two times in
succession upon the expiry of the payment date, fixed by the agreement;
4) fails to carry out an overhaul of property in the time-limits
fixed by the lease agreement, and in the absence of them in the agreement
within reasonable periods in cases where in conformity with the law,
other legal acts or the agreement the overhaul is the duty of the
leaseholder.
The lease agreement may provide for other grounds of the
anticipatory dissolution of the agreement on the demand of the lessor in
compliance with Item 2 of Article 450 of this Code.
The lessor shall have the right to demand that the agreement be
dissolved short of the term only after the sending to the leaseholder a
written warning about the need to execute the obligation by him within
the reasonable period of time.
Article 620. The Anticipatory Dissolution of the Lease Agreement on
the Demand of the Leaseholder
At the request of the leaseholder the lease agreement may be
dissolved short of the term by a court of law in cases when:
1) the lessor fails to grant property for use by the leaseholder or
creates impediments to the use of property in keeping with the terms and
conditions of the agreement or the purpose of property;
2) the property transferred to the leaseholder has the defects which
prevent its use and which have not been specified by the lessor during
the conclusion of the agreement, have not been known to the leaseholder
in advance and should not have been discovered by the leaseholder during
the inspection of the property or the verification of its serviceability
at the time of the conclusion of the agreement;
3) the lessor does not carry out the duty of effecting major repairs
of property within the time-limits fixed by the lease agreement and in
their absence - within the reasonable period of time;
4) property proves to be in a faulty condition in view of the
circumstances beyond the control of the leaseholder.
The lease agreement may also institute other grounds for the
anticipatory dissolution of the agreement on the demand of the
leaseholder in keeping with Item 2 of Article 450 of this Code.
Article 621. The Leaseholder's Preferential Right to Conclude a
Lease Agreement for a New Term
1. Unless otherwise stipulated by the law or the lease agreement,
the leaseholder who discharged his duties properly shall have, with other
things being equal, the right of preference to other persons to the
conclusion of a lease agreement for a new term upon the expiry of the
validity term of the agreement. The leaseholder shall be obliged to
inform in writing the lessor about his desire to conclude such agreement,
and if the agreement does not indicate such time - within the reasonable
period before the expiry of the validity term of the agreement.
With the conclusion of a lease agreement for a new period the terms
and conditions of the agreement may be changed by agreement between the
parties thereto.
If the lessor has denied the leaseholder the conclusion of an
agreement for a new term, but has concluded the lease agreement with
another person during one year since the day of the expiry of the
validity term of the agreement, the leaseholder shall have the right at
his option to demand in court the transfer of the rights and duties under
the concluded agreement to himself and the reparation of the losses,
caused by the refusal to resume the lease agreement with him, or the
reparation of such losses alone.
2. If the leaseholder continues to make use of property after the
expiry of the validity term of the agreement in the absence of objections
on the part of the lessor, the agreement shall be deemed to be resumed on
the same conditions for an indefinite period of time (Article 610).
Article 622. The Return of Leased Property to the Lessor
With the termination of the lease agreement the leaseholder shall be
obliged to return to the lessor in the same condition in which he
received it with an allowance for normal wear and tear or in the
condition specified by the agreement.
If the leaseholder has failed to return leased property or returned
it untimely, the lessor shall have the right to demand that the rental
payment be made during all the time of its delay. In case of where the
said payment does not cover the losses caused to the lessor, the
leaseholder may claim damages.
In case where a penalty is provided for the untimely return of
leased property, losses may be recovered in full measure over and above
the penalty, unless otherwise stipulated by the agreement.
Article 623. Improvements of Leased Property
1. Separable improvements of leased property made by the leaseholder
shall be his property, unless otherwise stipulated by the lease
agreement.
2. In case where the leaseholder has made the improvements in leased
property, which are not separable without detriment to this property, at
the expense of his own pecuniary means and with the consent of the
lessor, the leaseholder shall have the right to the replacement of the
value of these improvements after the termination of the agreement,
unless otherwise stipulated by the lease agreement.
3. The value of inseparable improvements of leased property made by
the leaseholder without the lessor's consent shall be subject to
reparation, unless otherwise stipulated by the law.
4. Improvements in leased property, both separable and unseparable,
made at the expense of depreciation deductions from this property shall
be the property of the leaseholder.
Article 624. Redemption of Leased Property
1. The law or the lease agreement may stipulate that leased property
is to be passed into the hands of the leaseholder upon the expiry of the
period of lease or before its expiry, provided that the leaseholder has
paid the entire redemption price, specified by the agreement.
2. If the lease agreement does not provide for the clause on the
redemption of leased property, it may be introduced by the additional
agreement of the parties, which have the right to come to an agreement on
the reckoning of the earlier paid rental in the redemption price.
3. The law may specify cases of banning the redemption of leased
property.
Article 625. Specific Aspects of Particular Types of Lease and Lease
of Particular Kinds of Property
Provisions stipulated by this paragraph shall be applicable to
particular types of the lease agreement and the agreement of lease of
particular kinds of property (hire, lease of transport vehicles, rent of
buildings and structures, rent of enterprises, financial lease), unless
otherwise stipulated by the rules of this Code on these agreements.
§ 2. Hire
Article 626. The Hire Contract
1. Under the hire contract the lessor who lets property on lease as
permanent business shall undertake to grant to the leaseholder movable
property for charge in temporary possession and use.
Property given under the hire contract shall be used for consumer
purposes, unless otherwise stipulated by the contract or unless the
contrary follows from the substance of the obligation.
2. The hire contract shall be concluded in writing.
3. The hire contract shall be a public agreement (Article 426).
Article 627. The Term of the Hire Contract
1. The hire contract shall be concluded for a term of one year.
2. The rules for the renewal of the lease agreement for an
indefinite period and for the preferential right of the leaseholder to
renew the lease agreement (Article 621) shall not be applicable to the
hire contract.
3. The leaseholder shall have the right to abandon the hire contract
at any time by warning the lessor in writing about his intention within
ten days.
Article 628. The Granting of Property to the Leaseholder
The lessor who concludes the hire contract shall be obliged to
verify the serviceability of leased property in the presence of the
leaseholder, and also to acquaint the leaseholder with the rules of using
property or to issue to him written instructions on the use of this
property.
Article 629. Removal of Defects of Leased Property
1. In case of discovery by the leaseholder of defects in leased
property that wholly or partially prevent its use, the lessor shall be
obliged, within 10 days since the day of the leaseholder's statement on
defects, unless the hire contract provides for a shorter period, to
remove free of charge the defects of property on the spot or to replace
this property for other similar property held in proper condition.
2. If the defects of leased property have resulted from the breach
by the leaseholder of the rules of the operation and maintenance of
property, the leaseholder shall pay to the lessor the cost of repairs and
transportation of property.
Article 630. Rental Payment Under the Hire Contract
1. A rental payment under the hire contract shall be fixed in
definite payments made periodically or in the lump.
2. If the leaseholder returns property short of the term, the lessor
shall return to him the corresponding part of the received rental
payment, reckoning it since the day succeeding the day of the actual
return of property.
3. Recovery of rental payment arrears from the leaseholder shall be
effected in the extra-judicial order on the basis of the notary's
endorsement of execution.
Article 631. The Use of Leased Property
1. Major and current repairs of property leased under the hire
contract shall be the duty of the lessor.
2. The sub-lease of the property granted to the leaseholder under
the hire contract, the transfer by him of his rights and duties under the
hire contract to another person, the provision of this property for
gratuitous use, the pledge of lease rights and their contribution as a
property share to economic partnerships and companies or as a share to
producer cooperatives shall not be allowed.
§ 3. Lease of Transport Vehicles
1. Lease of a Transport Vehicle with the Provision of Services for
Driving and Technical Operation
Article 632. The Agreement of Lease of a Transport Vehicle with Its
Crew
Under the agreement of lease (chartering for a time) of a transport
vehicle with its crew the lessor shall grant to the leaseholder a
transport vehicle for charge in temporary possession and use and shall
render the services for driving it and technical operation.
The rules for the renewal of the lease agreement for an indefinite
period and for the preferential right of the leaseholder to the
conclusion of a lease agreement for a new period (Article 621) shall not
be applicable to the lease agreement of a transport vehicle with its
crew.
Article 633. The Form of the Agreement of Lease of a Transport
Vehicle with Its Crew
The agreement of lease of a transport vehicle with its crew shall be
concluded in writing, regardless of its validity term. The rules for the
registration of lease agreements, provided for by Item 2 of Article 609
of this Code, shall not be applicable to such agreement.
Article 634. The Duty of the Lessor to Maintain a Transport Vehicle
During the entire validity term of the agreement of lease of a
transport vehicle with its crew the lessor shall be obliged to maintain
the proper condition of the leased transport vehicle, including minor and
major repairs and the provision of requisite accessories.
Article 635. The Duty of the Lessor to Drive and Operate a Transport
Vehicle
1. The services of driving and operating a transport vehicle granted
by the lessor to the leaseholder shall provide for its normal and safe
operation in keeping with the purposes of lease specified in the
agreement. The agreement of lease of a transport vehicle with its crew
may envisage a wider range of services offered to the leaseholder.
2. The crew of a transport vehicle and the skill of its members
shall comply with the rules obligatory for the parties, the terms and
conditions of the agreement, and if such requirements have not been
established by those mandatory rules, the crew and the skill of its
members shall comply with the requirements of the usual practice of the
operation of the transport vehicle of this type and with the terms and
conditions of the agreement.
The crew members shall be the workers of the lessor. They shall be
subordinate to the lessor's orders dealing with driving and technical
operation and to the leaseholder's order dealing with the commercial
exploitation of the transport vehicle.
Unless the lease agreement provides otherwise, the expenses on the
payment for the services of the crew members, and also the expenses
incurred in their maintenance shall be borne by the lessor.
Article 636. The Duty of the Leaseholder to Pay Expenses Incurred in
the Commercial Exploitation of a Transport Vehicle
Unless otherwise stipulated by the agreement of lease of a transport
vehicle with its crew, the leaseholder shall bear the expenses incurred
in the commercial exploitation of a transport vehicle, including the
expenses on the payment for fuel and other materials spent during this
exploitation and on the payment of fees.
Article 637. Insurance of a Transport Vehicle
Unless otherwise stipulated by the agreement of lease of a transport
vehicle with its crew, the duty of insuring the transport vehicle and/or
insuring the liability for the damage which can be caused by it or in
connection with its operation shall be vested with the leaseholder in
those cases where such insurance is obligatory by virtue of the law or
the agreement.
Article 638. Agreements with Third Parties on the Use of a Transport
Vehicle
1. Unless otherwise stipulated by the agreement of lease of a
transport vehicle with its crew, the leaseholder shall be obliged to
sublease the transport vehicle without the lessor's consent.
2. Within the framework of the commercial exploitation of a leased
transport vehicle the leaseholder shall have the right to conclude on his
own behalf contracts of carriage and other contracts with third parties
without the lessor's consent, unless these contracts contradict the
purposes of the use of the transport vehicle, indicated in the lease
agreement, and if such purposes have not been set, unless these contracts
contradict the designation of the transport vehicle.
Article 639. Liability for the Harm Caused to a Transport Vehicle
In case of the destruction of or damage to the leased transport
vehicle the leaseholder shall be obliged to compensate to the lessor for
the losses caused, if the latter proves that the destruction of or the
damage to the transport vehicle have taken place due to the circumstances
for which the leaseholder is answerable in keeping with the law or the
lease agreement.
Article 640. Liability for the Harm Caused by a Transport Vehicle
The liability for the harm, caused to third persons by the leased
transport vehicle, its mechanisms, devices, equipment, shall be borne by
the leaseholder in keeping with the rules, envisaged by Chapter 59 of
this Code. He shall have the right to have recourse against the
leaseholder concerning the reimbursement of the sums of money paid to
third persons, if he proves that the harm has been caused through the
fault of the leaseholder.
Article 641. Specific Aspects of Transport Vehicles of Particular
Types
The transport charters and codes may provide for the lease of
transport vehicles of particular types and the provision of driving and
technical operation services with their specific aspects other than those
specified by this paragraph.
2. The Lease of a Transport Vehicle Without Driving and
Technical Operation Services
Article 642. The Agreement of Lease of a Transport Vehicle without a
Crew
Under the agreement of lease of a transport vehicle without a crew
the lessor shall give to the leaseholder the transport vehicle for charge
in his temporary possession and use without rendering the driving and
technical operation services.
The rules for the renewal of the lease agreement for an indefinite
period and for the preferential right of the leaseholder to conclude the
lease agreement for a new period (Article 621) shall not be applicable to
the agreement of lease of a transport vehicle without a crew.
Article 643. The Form of the Agreement of Lease of a Transport
Vehicle Without a Crew
The agreement of lease of a transport vehicle without a crew shall
be concluded in writing, regardless of its validity term. The rules for
the registration of lease agreements, envisaged by Item 2 of Article 609
of this Code, shall not be applied to such agreement.
Article 644. The Lessor's Duty of Maintaining a Transport Vehicle
During the entire validity term of the agreement of lease of a
transport vehicle without a crew the leaseholder shall be obliged to
support the proper condition of the leased transport vehicle, including
to carry on minor and major repairs.
Article 645. The Leaseholder's Duty of Driving a Transport Vehicle
and Operating It
The leaseholder shall drive the leased transport vehicle on his own
and carry out its commercial exploitation and technical operation.
Article 646. The Leaseholder's Duty of Paying the Expenses Incurred
in the Maintenance of a Transport Vehicle
Unless otherwise stipulated by the agreement of lease of a
transport vehicle without a crew, the leaseholder shall bear expenses on
the maintenance of the leased transport vehicle and its insurance,
including the insurance of his liability, and also expenses arising from
its operation.
Article 647. Contracts with Third Persons on the Use of a Transport
Vehicle
1. Unless otherwise stipulated by the agreement of lease of a
transport vehicle without a crew, the leaseholder shall have the right to
sublease the leased transport vehicle without the lessor's consent on the
terms and conditions of the agreement of lease of the transport vehicle
with the crew or without it.
2. The leaseholder shall have the right, on his behalf and without
the lessor's consent, to conclude contracts of carriage and other
contracts with third persons, unless these contracts contradict the
purposes of the use of the transport vehicle, indicated in the lease
agreement, and if such purposes have not been set, unless these contracts
contradict the designation of the transport vehicle.
Article 648. Liability for the Harm Inflicted by a Transport Vehicle
The liability for the harm caused to third persons by a transport
vehicle, its mechanisms, devices and equipment shall be borne by the
leaseholder in keeping with the rules of Chapter 59 of this Code.
Article 649. Specific Aspects of the Lease of Transport Vehicles of
Particular Types
The transport charters and codes may provide for the lease of
transport vehicles of particular types without the provision of driving
and technical operation services with their specific aspects other than
those specified by this paragraph.
§ 4. The Lease of Buildings and Structures
Article 650. The Contract of Lease of a Building or Structure
1. Under the contract of lease of a building or structure the lessor
shall undertake to transfer to the leaseholder a building or a structure
in temporary possession or use in temporary use.
2. The rules of this paragraph shall be applied to the lease of
enterprises, unless otherwise stipulated by the rules of this Code for
the lease of enterprises.
Article 651. The Form and State Registration of the Contract of
Lease of a Building or Structure
1. A contract of lease of a building or structure shall be concluded
in writing by drawing up one document to be signed by the parties thereto
(Item 2 of Article 434).
Non-observance of the form of the contract of lease of a building or
structure shall invalidate it.
2. The contract of lease of a building or structure, concluded for a
term of not less than a year, shall be subject to state registration and
shall be deemed to be concluded since the time of such registration.
Article 652. The Rights to the Land Plot with the Leased Building or
Structure
1. Under the contract of lease of a building or structure the
leaseholder shall receive together with the rights of possession and use
of such tenement the right to that part of the land plot which is
occupied by this treatment and which is needed for its use.
2. In cases where the lessor is the owner of the land plot with the
leased building or structure situated on it the leaseholder shall receive
the right of lease of the building or structure, to the appropriate part
of the land plot.
If the contract does not specify the right to the corresponding land
plot to be transferred to the leaseholder, he shall receive for the term
of the lease of the building or structure the right of use of that part
of the land plot which is occupied by the building or the structure and
is needed for its use in accordance with its purpose.
3. The lease of the building or structure situated on the land plot
that does not belong to the lessor by right of ownership shall be allowed
without the consent of the owner of this plot, unless this runs counter
to the terms of the use of such plot, established by the law or the
contract concluded with the owner of the land plot.
Article 653. The Preservation by the Tenant of the Building or
Structure of the Use of the Land Plot in Case of Its
Sale
In cases where the land plot with the leased building or structure
situated on it is sold to another person, the leaseholder of this
building or structure shall retain the right of use of the part of the
land plot, which is occupied by the building or structure and which is
needed for its use, on the terms that were in effect before the sale of
the land plot.
Article 654. The Amount of the Rental Payment
1. The contract of lease of a building or structure shall provide
for the amount of the rental payment. In the absence of the proviso on
the amount of the rental payment, agreed upon by the parties thereto in
writing, the contract of lease of a building or structure shall be deemed
to be non-concluded. In this case the rules for determining the price,
stipulated by Item 3 of Article 424 of this Code, shall not be applied.
2. The charge for the use of the building or structure, fixed in the
contract of lease of the building or structure, shall include the charge
for the use of the land plot on which it is situated or for the
corresponding part of the land plot transferred together with the
building or structure, unless otherwise stipulated by the law or the
contract.
3. In cases where the charge for the lease of the building or
structure is fixed in the contract per unit of the square of the building
(structure) or another index of its size, the rental payment shall be
determined on the basis of the actual size of the building or structure
transferred to the leaseholder.
Article 655. The Transfer of the Building or Structure
1. The building or structure shall be transferred by the lessor and
accepted by the leaseholder on the strength of the deed of conveyance or
another document to be signed by the parties.
Unless otherwise stipulated by the law or the contract of lease of a
building or structure, the obligation of the lessor to transfer the
building or structure shall be deemed to be executed after it is given to
the leaseholder in possession or use and after the parties have signed
the respective document.
The evasion by one of the parties from signing the document on the
transfer of the building or structure on the conditions stipulated by the
contract shall be regarded as a refusal of the lessor from the discharge
of the obligation of transferring the property, and of the leaseholder
from the acceptance of this property.
2. With the termination of the contract of lease of a building or
structure the leased building or structure shall be returned to the
lessor with the observance of the rules, provided for by Item 1 of this
Article.
§ 5. The Lease of Enterprises
Article 656. The Contract of Lease of the Enterprise
1. Under the contract of lease of the enterprise as a property
complex to be used for business the lessor shall undertake to grant to
the leaseholder for charge in temporary possession and use land plots,
buildings, structures, equipment and other fixed assets included in the
enterprise, to transfer in the order, on the terms and within the limits
of the contract the stocks of raw materials, fuel, auxiliary materials
and other current assets, the rights of using land, water and other
natural resources, buildings, structures and equipment, other property
rights of the lessor related to the enterprise, the rights to the signs
which individualize the performance of the enterprise, and other
exclusive rights, and also to cede to him the rights of claims and to
transfer to him the debts of the enterprise. The transfer of the rights
of possession and use of the assets held in the ownership of other
persons, including land and other natural resources, shall be effected in
the order, provided for by the law and other legal acts.
2. The rights of the lessor, received by him on the basis of the
permit (license) for the engagement in the respective activity, shall not
be transferred to the leaseholder, unless otherwise stipulated by the law
or other legal acts. The inclusion in the composition of the enterprise
to be transferred under the contract of the obligations which the
leaseholder is unable to execute in the absence of such permit (license)
shall not release the lessor from the corresponding obligations to
creditors.
Article 657. The Rights of Creditors in Case of the Lease of an
Enterprise
1. Under the obligations included in the composition of the
enterprise the creditors shall be notified in writing by the lessor about
the lease of the enterprise before it is transferred to the leaseholder.
2. The creditor who has failed to inform the lessor in writing about
his consent to transfer the debt shall have the right to demand the
termination or the anticipatory execution of the obligation and the
compensation for the losses caused by this during three months since the
day of receipt of the notice of the lease of the enterprise.
3. The creditor who has not been notified about the lease of the
enterprise in the procedure, envisaged by Item 1 of this Article, may
bring an action about the satisfaction of the claims, stipulated by Item
2 of this Article, during one year since the day when he has known or
should have known about the lease of the enterprise.
4. After the lease of the enterprise the lessor and the leaseholder
shall bear joint and several liability for the debts, which have been
included in the leased enterprise and which have been transferred to the
leaseholder without the creditor's consent.
Article 658. The Form and State Registration of the Contract of
Lease of an Enterprise
1. The contract of lease of an enterprise shall be concluded in
writing by drawing up one document to be signed by the parties thereto
(Item 2 of Article 434).
2. The contract of lease of an enterprise shall be subject to state
registration and shall be deemed to be concluded since the time of such
registration.
3. Non-observance of the form of the contract of lease of an
enterprise shall invalidate it.
Article 659. The Transfer of the Leased Enterprise
The enterprise shall be transferred to the leaseholder under the
deed of conveyance.
It shall be the duty of the lessor to prepare the enterprise for its
transfer, to draw up and submit the deed of conveyance for signing. These
operations shall be carried out at his expense, unless otherwise
stipulated by the contract of lease of the enterprise.
Article 660. The Use of the Property of the Leased Enterprise
Unless otherwise stipulated by the contract of lease of an
enterprise, the leaseholder shall have the right, without the lessor's
consent, to sell, exchange, grant for temporary use or lend out material
values that form part of the property of the leased enterprise, to
sublease them and to transfer his rights and duties under the contract of
lease in respect of such values to another person, provided that his does
not involve the reduction of the cost of the enterprise and does not
violate the other provisions of the contract of the lease of the
enterprise. The said procedure shall not be applied to land and other
natural resources, and also in other cases envisaged by the law.
Unless otherwise stipulated by the contract of lease of the
enterprise, the leaseholder shall have the right, without the lessor's
consent, to introduce changes to the composition of the leased property
complex, to carry out its reconstruction, expansion, and technical
re-equipment that increases its cost.
Article 661. The Leaseholder's Duties of Maintaining the Enterprise
and Disbursing Expenses on Its Operation
1. During the entire validity term of the contract of lease of the
enterprise the leaseholder shall be obliged to maintain the enterprise in
proper technical condition, and also to carry out its current and major
repairs.
2. The leaseholder shall bear the expenses incurred in the operation
of the leased enterprise, unless otherwise stipulated by the contract,
and also in the payment for the insurance of the leased property.
Article 662. The Introduction of Improvements to the Leased
Enterprise by the Leaseholder
The leaseholder of an enterprise shall have the right to the
compensation to him of the cost of inseparable improvements in the leased
property, regardless of the permission of the lessor for such
improvements, unless otherwise stipulated by the contract of lease of the
enterprise.
The lessor may be dispensed by the court from the duty of
compensating to the leaseholder the cost of such improvements, if he
proves that the leaseholder's outlays on these improvements increase the
cost of the leased property in disproportion to the improvement of its
quality and/or operation properties or in case of such improvements the
principles of conscientiousness and reasonableness have been breached.
Article 663. The Application of the Rules for the Consequences of
the Invalidity of Transactions and for the Alteration
and Dissolution of Contracts to the Contract of Lease
of the Enterprise
The rules of this Code for the consequences of the invalidity of
transactions and for the alteration and dissolution of the contract,
which provide for the return or recovery in kind of the received payment
under the contract from one party or from both parties, shall be
applicable to the contract of lease of the enterprise, unless such
consequences violate substantially the rights and law-protected interests
of the creditors of the lessor and the leaseholder and other persons and
unless they run counter to public interests.
Article 664. The Return of the Leased Enterprise
With the termination of the contract of lease of the enterprise the
leased property complex shall be returned to the lessor with the
observance of the rules, provided for by Articles 656, 657 and 659 of
this Code. In this case the preparation of the enterprise for the
transfer to the lessor, including the drawing up and submission of a deed
of conveyance for signing shall be the duty of the leaseholder and shall
be effected at his expense, unless otherwise stipulated by the contract.
§ 6. Financial Lease (Leasing)
Article 665. The Contract of Financial Lease
Under the contract of financial lease (leasing contract) the lessor
shall undertake to acquire the property indicated by the leaseholder from
the seller specified by him and to grant to the leaseholder this contract
for charge in temporary possession and use for business purposes. In this
case the lessor shall bear no responsibility for the choice of a subject
of the lease and of a seller.
The contract of financial lease may provide for making the choice of
a seller and acquired property by the lessor.
Article 666. The Subject of the Contract of Financial Lease
Any non-consumed things used in business, except for land plots and
other natural objects may be the subject of the contract of financial
lease.
Article 667. The Notification of the Seller about the Lease of
Property
The lessor who acquires property for the leaseholder shall notify
the seller that this property is intended for its lease by a definite
person.
Article 668. The Transfer of the Subject of the Contract of
Financial Lease to the Leaseholder
1. Unless otherwise stipulated by the contract of financial lease,
the property which is the subject of this contract shall be transferred
by the seller directly the leaseholder in the place of location of the
latter.
2. In case where property, being the subject of the contract of
financial lease, is not transferred to the leaseholder in the period
fixed in the contract or in the reasonable period, if the contract does
not fix such date, the leaseholder shall have the right to demand the
dissolution of the contract and claim damages, if delay was caused by the
circumstances beyond the contract of the lessor.
Article 669. The Transfer of the Risk of Accidental Destruction of,
or Accidental Damage to, Property to the Leaseholder
The risk of accidental destruction of, or accidental damage to, the
leased property shall pass to the leaseholder at the time of the transfer
of the leased property to him, unless otherwise stipulated by the
contract of financial lease.
Article 670. Liability of the Seller
1. The leaseholder shall have the right to place directly to the
seller of the property, which is the subject of the contract of financial
lease, the claims, following from the contract of sale, concluded between
the seller and the lessor, for the quality and completeness of the
property, the terms of its delivery and in other cases of the improper
performance of the contract by the seller. In this case the leaseholder
shall have the rights and bear the duties, provided for by this Code for
the buyer, except for the duty of paying for the acquired property, as if
he was a party to the contract of sale of said property. However the
leaseholder may not dissolve the contract of sale with the seller without
the lessor's consent.
In their relations with the seller the leaseholder and the lessor
act as joint and several creditors (Article 326).
2. Unless otherwise stipulated by the contract of financial lease,
the lessor shall not be liable to the leaseholder for the fulfilment by
the seller of the claims following from the contract of sale, except in
cases where the responsibility for the choice of a seller rests with the
lessor. In the latter case the leaseholder shall have the right at his
own option to make claims following from the contract of sale, both
directly to the seller of property and to the lessor, who bear joint and
several liability.
Chapter 35. The Renting of Living Accommodation
Article 671. The Contract of Renting Living Accommodation
1. Under the contract of renting living accommodation one party -
the owner of living quarters or the person authorized by him (renter) -
shall be obliged to give to the other part (tenant) living accommodation
for charge in possession and use for residing in it.
2. Living accommodation may be granted to legal entities in
possession and/or use on the basis of the lease agreement or another
contract. A legal entity may use living quarters for the residence of
private persons alone.
Article 672. The Contract of Renting Living Accommodation in the
State and Municipal Housing Stock of Social Use
1. Living quarters in the state and municipal housing stock in
social use shall be given to individuals under the contract of the social
renting of living accommodation.
2. The members of the family residing under the contract of the
social renting of living accommodation together with the tenant shall
enjoy all the rights and bear all the obligations under the contract of
renting living quarters on a par with the tenant.
On the demand of the tenant and the members of his family the
contract may be concluded with one members of the family. In case of
death of the tenant or of his retirement from living quarters the
contract shall be concluded with one family members residing in these
quarters.
3. A contract of the social renting of living accommodation shall be
concluded on the grounds and conditions and in the order, provided for by
the housing legislation. The rules of Articles 674, 675, 678, 680, 681
and Items 1-3 of Article 685 of this Code shall be applicable to the
contract of the social renting of living accommodation, unless otherwise
stipulated by the housing legislation.
Article 673. The Object of the Contract of Renting Living
Accommodation
1. Isolated living accommodation suitable for permanent residence
(the apartment, dwelling house, part of the apartment or dwelling house).
The fitness of living accommodation for residence shall be
determined in the order, provided for by the housing legislation.
2. The tenant of living quarters in a tenement shall have the right
to use property, indicated in Article 290 of this Code, in addition to
the use of living accommodation.
Article 674. The Form of the Contract of Renting Living
Accommodation
The contract of renting living accommodation shall be concluded in
writing.
Article 675. The Preservation of the Contract of Renting Living
Accommodation When the Right of Ownership of Living
Quarters Is Transferred
The transfer of the right of ownership of living quarters under the
contract of renting living accommodation shall not involve the
dissolution or charge of the contract of renting living accommodation. In
this case the new owner shall become a renter on the terms of the
contract of renting concluded earlier.
Article 676. The Obligations of the Renter of Living Quarters
1. The renter shall be obliged to transfer to the tenant free living
quarters in a condition suitable for residence.
2. The renter shall be obliged to carry on proper exploitation of
the dwelling house, in which the leased living quarters are to be found,
to provide public utilities or ensure their provision to the tenant for
charge, to carry on the repair of the common property in the tenement and
of devices for rendering communal services in the living quarters.
Article 677. The Tenant and Individuals Permanently Residing with
Him
1. Only a private person may be a tenant under the contract of
renting living accommodation.
2. The contract shall indicate individuals permanently residing in
living quarters together with the tenant. In the absence of such
indication in the contract these individuals shall be moved in living
quarters in accordance with the rules of Article 679 of this Code.
Individuals permanently residing together with the tenant shall have
equal rights in the use of living accommodation. The relations between
the tenant and such individuals shall be determined by law.
3. The tenant shall be liable to the renter for the actions of the
individuals permanently residing together with him and violating the
terms and conditions of the contract of renting living accommodation.
4. Individuals permanently residing together with the tenant may be
notifying the renter conclude with the tenant a contract to the effect
that all the individuals permanently residing in living quarters bear
with the tenant joint and several liability to the renter. In this case
such individuals shall be co-tenants.
Article 678. The Obligations of the Tenant of Living Quarters
The tenant shall be obliged to make use of living quarters for
residence only, to preserve them and maintain them in proper condition.
The tenant shall have no right to reconstruct living quarters
without the renter's consent.
The tenant shall be obliged to make payment for living
accommodation. Unless otherwise stipulated by the contract, the tenant
shall be obliged to make utility rates on his own.
Article 679. The Moving-in of Individuals Permanently Residing with
the Tenant
Other individuals may be moved in living quarters with the consent
of the renter, tenant and individuals permanently residing with him in
the capacity of permanently residents. No consent shall be required in
case of moving in minors.
The moving-in shall be allowed with the observance of the
requirements of legislation on the living space norm per one person,
except for the case of moving in minors.
Article 680. Temporary Lodgers
The tenant and the individuals permanently residing with him shall
have the right to permit temporary lodgers (users) to live free of charge
in their living quarters by common agreement and with the preliminary
notification of the renter. The renter may ban the living of temporary
lodgers with the observance of the requirements of legislation on the
living space norm per man. The period of living of temporary lodgers may
not exceed six months.
Temporary lodgers shall not possess the independent right of using
living quarters. The tenant shall be responsible for their actions to the
renter.
Temporary lodgers shall be obliged to vacate living quarters upon
the expiry of the period of residence agreed upon with them, and if this
period is not agreed upon, they shall be obliged to vacate living
quarters within seven days since the day of making the respective demand
by the tenant or any individual permanently residing with him.
Article 681. Repairs of the Leased Living Quarters
1. It shall be the duty of the tenant to carry out current repairs
of leased living quarters, unless otherwise stipulated by the contract of
renting living accommodation.
2. It shall be the duty of the renter to carry out major repairs of
leased living quarters, unless otherwise stipulated by the contract of
renting living accommodation.
3. It shall not be allowed to re-equip the dwelling house in which
living quarters are to be found, if this re-equipment substantially
change the conditions of using living quarters, without the consent of
the tenant.
Article 682. Payment for Living Quarters
1. The amount of the payment for living quarters shall be fixed by
agreement between the parties in the contract of renting living
quarters. If a maximum payment for living quarters has been fixed in
accordance with the law, the payment provided for by the contract shall
not exceed this amount.
2. It shall not be allowed to change the payment for living quarters
unilaterally, except for the cases provided for by the law or the
contract.
3. Payment for living quarters shall be made by the tenant within
the periods of time, envisaged by the contract of renting living
accommodation. If the contract does not provide for time-limits, payment
shall be made by the tenant every month in the order, prescribed by the
Housing Code of the Russian Federation.
Article 683. The Time-limit in the Contract of Renting Living
Accommodation
1. A contract of renting living accommodation shall be concluded for
a term that does not exceed five years. If the contract does not fix the
term, the contract shall be deemed to be concluded for five years.
2. The rules, envisaged by Item 2 of Article 677, Articles 680,
684-686, the fourth paragraph of Item 2 of Article 687 of this Code shall
not be applied to the contract of renting living accommodation, concluded
for a term of one year (short-term renting), unless otherwise stipulated
by the contract.
Article 684. The Preferential Right of the Tenant to Conclude a
Contract for a New Term
With the lapse of the term of the contract of renting living
quarters the tenant shall have the preferential right to conclude a
contract of renting living accommodation for a new term.
Not later than three months before the expiry of the term of the
contract of renting living quarters the renter shall propose that the
tenant conclude a contract on the same or other conditions or warn the
tenant about the refusal to prolong the contract in connection with the
decision of not letting on lease living quarters during the period of not
less than a year. If the renter has failed to perform this obligation,
while the tenant has not refused to prolong the contract, the latter
shall be deemed to be extended on the same conditions and for the same
period.
When the terms and conditions of the contract are being coordinated,
the tenant shall have no right to demand that the number of persons
permanently residing with him under the contract of renting living
accommodation should be increased.
If the renter has refused to prolong the contract in connection with
the decision not to let premises on lease, but during one year since the
day of the expiry of the validity term of the contract with the tenant
has concluded the contract of renting living accommodation with another
person, the tenant shall have the right to demand that this contract
should be recognized as invalid and/or that compensation should be made
for the losses caused by the refusal to renew the contract with him.
Article 685. Sustenance of Living Quarters
1. Under the contract for sustenance of living quarters the tenant
shall transfer for a term all the rented premise or the part thereof in
use by subtenant with the consent of the renter. The subtenant shall not
acquire the independent right of using living quarters. The tenant shall
remain to be liable to the renter under the contract of renting living
accommodation.
2. A contract for sustenance of living quarters may be concluded on
condition that the requirements of legislation on the living space norm
per one man should be met.
3. The contract for sustenance of living quarters shall be payable.
4. The validity term of the contract for sustenance of living
quarters may not exceed the validity term of the contract of renting
living quarters.
5. In case of the termination of the contract of renting living
quarters short of the term, the contract for sustenance of living
quarters shall cease simultaneously with it.
6. The rules for the preferential right to the conclusion of a
contract for a new term shall not extend to the contract for sustenance
of living quarters.
Article 686. The Replacement of the Tenant in the Contract of
Renting Living Accommodation
1. On the demand of the tenant and other private persons permanently
residing with him and with the consent of the renter the tenant in the
contract of renting living accommodation may be replaced by one of the
persons of age permanently residing together with the tenant.
2. In the event of the tenant's death or of his retirement from
living quarters, the contract shall continue to operate on the same
conditions, and one of the private persons permanently residing with the
former tenant shall become a tenant by general agreement between them. If
such agreement is not reached, all the individuals permanently residing
in living quarters shall become co-tenants.
Article 687. The Dissolution of the Contract of Renting Living
Quarters
1. With the consent of other persons permanently residing with him
the tenant of living quarters shall have the right to cancel the contract
of renting with the written warning of the renter three months
beforehand.
2. A contract of renting living quarters may be dissolved in due
course of law on the demand of the renter in the cases of:
the non-deposition by the tenant of payment for living quarters for
six months, unless the contract fixes a longer period, and in case of
short-term renting when payment has not been made for more than two times
upon the expiry of the term of payment fixed by the contract;
the destruction of, or damage to, the premise by the tenant or other
persons for whose actions he is answerable.
By the court's decision the tenant may be granted the period of one
year for the removal by him of the breaches that served as a ground for
the dissolution of the contract of renting living accommodation. If
during the period of time, fixed by a court of law, the tenant does not
remove the breaches or does not take all the necessary measures to
eliminate them, the court shall make a decision on the dissolution of the
contract of renting living accommodation in reply to the repeated
application of the renter. In this case, at the request of the tenant the
court may postpone the execution of its decision for a term of not more
than a year in its decision on the dissolution of the contract.
3. A contract of renting living accommodation may be dissolved by a
court of law on the demand of any party to the contract:
if the premise ceases to be suitable for permanent residence, and
also in case of its fault;
in other cases, provided for by the housing legislation.
4. If the tenant of living quarters or other private persons for
whose actions he is answerable make use of living quarters not to its
purpose or systematically violate the rights and interests of neighbours,
the renter may warn the tenant about the need to remove these breaches.
If the tenant or other persons, for the actions of which he is
answerable, continue to make use of living quarters after the warning not
to the purpose or to breach the rights and interests of neighbours, the
tenant shall have the right to dissolve the contract of renting living
accommodation judicially. In this case, the rules, provided for by the
fourth paragraph of Item 2 of this Article, shall be applied.
Article 688. The Consequences of the Dissolution of the Contract of
Renting Living Accommodation
In case of the dissolution of the contract of renting living
accommodation the tenant and other persons living in these living
quarters by the time of the cancellation of the contract shall be subject
to eviction on the basis of the court's decision.
Chapter 36. Gratuitous Use
Article 689. Contract for Gratuitous Use
1. Under the contract for gratuitous use (loan agreement) one party
(lender) shall undertake to transfer a thing or transfers it in
gratuitous use by the other party (borrower), while the latter shall
undertake to return the same thing in the condition in which it received
it with due account for normal depreciation or in the condition
stipulated by the contract.
2. The rules of Article 607, Item 1 and Paragraph 1 of Item 2 of
Article 610, Items 1 and 3 of Article 615, Item 2 of Article 621, Items 1
and 3 of Article 623 of this Code shall be accordingly applicable to the
contract for gratuitous use.
Article 690. The Lender
1. The right of transferring a thing in gratuitous use shall belong
to it owner and other persons authorized therefor by the law or by the
owner.
2. A non-profit organization shall have no right to transfer
property in gratuitous use by the person who is its founder, partner,
manager, member of its management or control bodies.
Article 691. The Giving of a Thing in Gratuitous Use
1. The lender shall be obliged to give a thing in the condition that
corresponds to the terms of the contract for gratuitous use and its
purpose.
2. A thing shall be given for gratuitous use with all its
accessories and related documents (instructions on its use, technical
certificate, etc.), unless otherwise stipulated by the contract.
If such accessories and documents have not been given, and without
them the thing can not be used according to its designation or its use is
largely responsible for the loss of its value for the lender, the latter
shall have the right to demand such accessories and documents or the
cancellation of the contract and the indemnity for the real loss.
Article 692. The Consequences of Failure to Give a Thing in
Gratuitous Use
If the lender fails to give a thing to the borrower, the latter
shall have the right to demand the cancellation of the contract for
gratuitous use and the indemnity for the real loss.
Article 693. Liability for the Defects of the Thing Given for
Gratuitous Use
1. The lender shall be liable for the defects of the thing which he
deliberately or because of gross negligence did not specify during the
conclusion of the contract for gratuitous use.
In case of discovery of such defects the borrower shall have the
right to demand from the lender at his option the gratuitous removal of
the defects of the thing or the reimbursement of his expenses on the
removal of the defects of the thing, or the anticipatory cancellation of
the contract and the indemnity for the real loss.
2. The lender, being informed about the claims of the borrower or
about his intention to eliminate the defects of the thing at the expense
of the lender, may replace without delay the faulty thing by another
similar thing in a proper condition.
3. The lender shall not be liable for the defects of the thing which
were specified by him during the conclusion of the contract or had been
known in advance to the borrower, or should have been discovered by the
borrower during the inspection of the thing or the verification of its
good condition during the conclusion of the contract or the transfer of
the thing.
Article 694. The Rights of Third Persons to the Thing Transferred
for Gratuitous Use
The transfer of a thing for gratuitous use shall not be a ground for
the alteration or termination of the rights of third persons to this
thing.
During the conclusion of a contract for gratuitous use the lender
shall be obliged to warn the borrower about all the rights of third
persons to this thing (servitude, the right of the pawning of the thing,
etc.). Default on this obligation shall entitle the borrower to demand
the dissolution of the contract and the indemnity for the real loss.
Article 695. The Obligation of the Borrower to Maintain a Thing
The borrower shall be obliged to maintain the thing received for
gratuitous use in a good condition, including to effect minor and major
repairs and to bear all the expenses on its maintenance, unless otherwise
stipulated by the contract for gratuitous use.
Article 696. The Risk of Accidental Destruction of, or Accidental
Damage to, the Thing
The borrower shall bear the risk of accidental destruction of, or
accidental damage to, the thing received for gratuitous use, if the thing
has been destroyed or become faulty in view of the fact that he used it
out of accordance with the contract for gratuitous use or its purpose, or
has transferred the thing to a third person without the lender's consent.
The borrower shall also bear the risk of accidental destruction of, or
accidental damage to, the thing, if with due account of actual
circumstances he could prevent its destruction or damage by sacrificing
his thing but has preferred to preserve his thing.
Article 697. Liability for the Harm Inflicted on the Third Person As
a Result of the Use of a Thing
The lender shall be liable for the harm inflicted on the third
person as a result of the use of a thing, unless he proves that the harm
was caused in consequence of intent or gross negligence on the part of
the borrower or the person who is in possession of this thing with the
lender's consent.
Article 698. The Cancellation of the Contract for Gratuitous Use
Short of the Term
1. The lender shall have the right to demand that the contract for
gratuitous use should be cancelled short of the term in cases where the
borrower:
uses the thing out of accordance with the contract or with its
designation;
fails to discharge the obligation of keeping the thing in good
condition or of maintaining it;
substantially worsens the condition of the thing;
has handed over the thing to a third person without the lender's
consent.
2. The borrower shall have the right to demand to anticipatory
cancellation of the contract for gratuitous use in the following cases:
if defects have been discovered that makes impossible or burdensome
the normal use of the thing and, moreover he did not know about them and
could not know about them at the time of the conclusion of the contract;
if the thing proves to be in a condition unsuitable for its use by
reason of circumstances for which he is not answerable;
if during the conclusion of the contract the lender did not warn him
about the rights of third persons to the thing being handed over to them;
if the lender has failed to discharge the obligation of handing over
the thing or its accessories and related documents.
Article 699. Repudiation of the Contract for Gratuitous Use
1. Each party to the contract shall have the right to repudiate at
any time the contract for gratuitous use, concluded without an indication
of its validity term, by informing the other party one month in advance,
unless the contract stipulates a different date of notification.
2. Unless otherwise stipulated by the contract, the borrower shall
have the right to repudiate at any time the contract, concluded with an
indication of its validity term, in the procedure, envisaged by Item 1 of
this Article.
Article 700. The Change of the Parties to the Contract for
Gratuitous Use
1. The lender shall have the right to alienate a thing or to hand it
over for lucrative use to a third person. In this case, the new owner or
user shall receive the rights under the contract for gratuitous use,
concluded earlier, while his rights to the thing shall be encumbered with
the rights of the borrower.
2. In case of the lender's death or the reorganization or
liquidation of the lending legal entity, the rights and obligations of
the lender under the contract for gratuitous use shall pass on to the
heir (legal successor) or to the other person to whom the right of
ownership of the thing or another right, on the basis of which the thing
was handed over for gratuitous use, has been transferred.
In case of the reorganization of the lending legal entity its rights
and obligations under the contract shall pass to the legal entity which
is its legal successor, unless otherwise stipulated by the contract.
Article 701. The Termination of the Contract for Gratuitous Use
The contract for gratuitous use shall cease in case of the
borrower's death or the liquidation of the borrowing legal entity, unless
otherwise stipulated by the contract.
Chapter 37. Contract of Hiring Work
§1. General Provisions on Contract of
Hiring Work
Article 702. Contract of Work and Labour
1. Under the work and labour contract one party (contractor) shall
undertake to perform definite work according to the assignment of the
other party (customer) and to turn it over to the customer, whereas the
customer shall undertake to accept the result of this work and to pay for
it.
2. The provisions envisaged by this paragraph shall be applied to
the individual types of the work and labour contract (domestic contract,
building contract, contract for the performance of design and survey
works, contract works for state needs), unless otherwise stipulated by
the rules of this Code for these types of contracts.
Article 703. Works Performed Under the Contract of Work and Labour
1. A contract of work and labour shall be concluded for the
manufacture or processing of a thing or for the performance of another
work with the transfer of its result to the customer.
2. Under the contract of work and labour, concluded for the
manufacture of a thing, the contractor shall transfer the rights to it to
the customer.
3. Unless otherwise stipulated by the contract, the contractor shall
determine methods of performing the customer's assignment on his own.
Article 704. Performance of Work by the Contractor's Maintenance
1. Unless otherwise stipulated by the work and labour contract, the
work shall be performed by the contractor's maintenance - from his
materials and with his own forces and means.
2. The contractor shall bear liability for improper quality of
materials and equipment supplied by him, and also for the provision of
materials and equipment, encumbered with the rights of third persons.
Article 705. The Distribution of Risks Between the Parties
1. Unless otherwise stipulated by this Code, other laws or the
contract of work and labour,
the risk of accidental destruction of, or accidental damage to,
materials, equipment, the things or assets used for the execution of the
contract, transferred for processing, shall be borne by the party that
has extended them;
the risk of accidental destruction of, or accidental damage to, the
result of the performed work before it is accepted by the customer shall
be borne by the contractor.
2. In case of delay in the delivery and acceptance of the result of
work the risks, specified in Item 1 of this Article, shall be borne by
the part which has made this delay.
Article 706. The General Contractor and the Subcontractor
1. Unless the obligation of the subcontractor to perform personally
the work, envisaged by the contract, follows from the law or the work and
labour contract, the contractor shall have the right to draw other
persons (subcontractors) in the execution of his obligations. In this
case the contractor shall play the part of the general contractor.
2. The contractor who has drawn a subcontractor in the execution of
the work and labour contract in contravention of the provisions of Item 1
of this Article or the contract shall bear liability to the customer for
the losses caused by the subcontractor's participation in the execution
of the contract.
3. The general contractor shall bear liability to the customer for
the consequences of the non-discharge or improper discharge of the
obligations by the subcontractor in keeping with the rules of Item 1 of
Article 313 and Article 403 of this Code and shall bear liability to the
subcontractor for the non-fulfilment or improper fulfilment of the
obligations by the customer under the work and labour contract.
Unless otherwise stipulated by the law or the contract, the customer
and the subcontractor shall not have the right to make to each other
claims relating to the breach of the contracts, concluded by each of them
with the general contractor.
4. With the general contractor's consent the customer shall have the
right to conclude contracts for the performance of individual works with
other persons. In this case the said persons shall bear liability
directly to the customer for the non-performance or improper performance
of work.
Article 707. The Participation of Several Persons in the Performance
of Work
1. If two or more persons act simultaneously on the side of the
contractor, they shall be recognized in case of indivisibility of the
subject-matter of the obligation as joint and several debtors with regard
to the customer and accordingly as joint and several creditors.
2. In the event of the divisibility of the subject-matter of the
obligation, and also in other cases, provided for by the law, other legal
acts or the contract, each person, referred to in Item 1 of this Article,
shall acquire rights and bear obligations with regard to the customer
within the limits of their share (Article 321).
Article 708. The Dates of the Performance of the Work
1. The work and labour contract shall indicate the initial and
deadline expiry dates of the performance of work. By agreement between
the parties the contract may also provide for the dates of completing in
particular stages of the work concerned (interim dates).
Unless otherwise stipulated by the law, other legal acts or the
contract, the contractor shall bear liability for breaking both the
initial or ultimate and interim dates of the performance of the work
concerned.
2. The initial, ultimate and interim dates of the performance of the
work may be changed in cases and in the order, rescribed by the contract.
3. The consequences of delay in execution, referred to in Item 2 of
Article 405 of this Code shall ensue in case of breaking the ultimate
date of the performance of the work concerned, and also of other times
established by the work contract.
Article 709. The Price of the Work
1. The work and labour contract shall indicate the price of the work
subject to performance or the methods of its estimation. If there is no
such indication in the contract, the price of the work shall be estimated
in accordance with Item 3 of Article 424 of this Code.
2. The price in the work and labour contract shall include
compensation for the contractor's costs and the remuneration due to him.
3. The price of the work may be estimated by means of drawing up its
estimate.
In the event the work is performed in accordance with the estimate
made by the contractor, the estimate shall acquire the force and become a
part of the work and labour contract since the time of its confirmation
by the customer.
4. The price of the work (estimate) may be approximate or firm. In
the absence of other references in the work and labour contract the price
of the work shall be deemed to be firm.
5. If there is a need for additional works and for this reason for a
substantial excess of the price of the work estimated approximately, the
contractor shall be obliged to warn the customer in due time about this.
The customer who has not given his consent to the price of the work,
indicated in the work and labour contract shall have the right to
repudiate the contract. In this case the contractor may demand that the
customer should pay the price for the performed part of the work.
The contractor who has not warned the customer in due time about the
need of exceeding the price of the work, indicated in the contract, shall
be obliged to fulfil the contract and retain the right to the payment for
the work at the price specified in the contract.
6. The contractor shall have no right to demand an increase in the
firm price, whereas the customer shall have no right to demand its
decrease, including in the event when at the time of concluding the work
and labour contract the possibility was excluded to make provision for
the full scope of works subject to performance or of the expenses needed
for this.
In the event of the substantial increase in the case of materials
and equipment provided by the contractor, and also of the services
rendered to him by third persons, which cannot be foreseen during the
conclusion of the contract, the contractor shall have the right to demand
an increase in the fixed price, and should the customer refuse to meet
this demand, he shall have the right to demand the dissolution of the
contract in accordance with Article 451 of this Code.
Article 710. The Saving of the Contractor
1. When the contractor's actual expenses prove to be less than those
reckoned in the estimation of the price of the work, the contractor shall
retain the right to the payment for works at the price, envisaged by the
work and labour contract, unless the customer proves that the saving
obtained by the contractor has influenced the quality of the performed
works.
2. the work and labour contract may provide for the distribution of
the saving obtained by the contractor among the parties thereto.
Article 711. Procedure of the Payment for the Work
1. If the work and labour contract does not provide for apreliminary
payment for the fulfilled work or of its particular stages, the customer
shall be obliged to pay to the contractor the specified price after the
final delivery of the results of the work, provided that the work has
been performed properly and within the agreed period or short of the term
with the consent of the customer.
2. The contractor shall have the right to demand the advance or
earnest money only in cases and in the amount, indicated in the law or in
the work and labour contract.
Article 712. The Contractor's Right to Retention
In the event of default on the customer's obligation to pay the
fixed price or any other sum of money due to the contractor in connection
with the performance of the work and labour contract, the contractor
shall have the right, in keeping with Articles 359 and 360 of this Code,
to the retention of the results of the work, and also the equipment
belonging to the customer, the thing transferred for processing, the
remainder of the unused material and other property of the customer,
turned out at his disposal before the payment of relevant sums of money
by the customer.
Article 713. The Performance of the Work with the Use of the
Customer's Material
1. The contractor shall be obliged to make economical and thrifty
use of the material supplied by the customer, submit after the completion
of the work to the customer his report on the spending of the material,
and also to return its remainder or to reduce the price of the work with
the customer's consent and with account of the value of the unused
material that remains at the contractor's disposal.
2. If no result has been achieved or the achieved result has
shortcomings which make it unfit for the use specified by the work and
labour contract or by the usual use in the absence of the appropriate
condition in the contract for reasons caused by the shortcomings of the
material, supplied by the customer, the contractor shall have the right
to demand payment for the work dome by him.
3. The contractor may exercise the right, indicated in Item 2 of
this Article, if he proves that the material's shortcomings could not be
discovered in the event of a proper acceptance of this material by the
contractor.
Article 714. The Contractor's Liability for the Non-safety of
Property Supplied by the Contractor
The contractor shall bear liability for the non-safety of the
materials, equipment supplied by the customer, of things and other
property transferred for processing (treatment) and possessed by the
contractor in connection with the execution of the work and labour
contract.
Article 715. The Rights of the Customer During the Performance of
the Work by the Contractor
1. The customer shall have the right to verify at any time the
progress and quality of the work performed by the contractor, while not
interfering in his activity.
2. If the contractor does not embark on the execution of the work
and labour contract or performs the work so slowly that it is obviously
impossible to finish it by the time fixed, the customer shall have the
right to refuse to execute the contract and to claim damages.
3. If it becomes obvious during the performance of the work that it
will not be performed properly, the customer shall have the right to
appoint a reasonable date for the removal of shortcomings and in case of
default of this requirement by the contractor in the appointed time to
waive the work and labour contract or to entrust another person with the
correction of the work at the expense of the contractor, and also to
claim damages.
Article 716. The Circumstances About Which the Contractor Shall Be
Obliged to Warn the Customer
1. The contractor shall be obliged to warn the customer without
delay and to suspend the work before he receives his directions in the
event of the discovery of:
the unsuitability or the substandard quality of the customer's
materials, equipment, technical documents or the thing delivered for
processing (treatment);
possible favourable consequences of the implementation of the
customer's directions on the method of performing the work;
other circumstances beyond the contractor's control, which endanger
the fitness or the stability of the results of the work being performed
or make it impossible to finish this work on time.
2. The contractor, who has failed to warn the customer about the
circumstances, indicated in Item 1 of this Article or who has continued
the work without waiting for the expiry of the date, referred to in the
contract, and in its absence without waiting the expiry of the reasonable
period for a reply to the warning or despite the timely indication of the
customer concerning the discontinuance of the work, shall have no right
to refer to said corresponding in the event of the presentation of
appropriate claims to him or by him to the customer.
3. If despite the timely and justified warning by the contractor
about the circumstances, referred to in Item 1 of this Article, the
customs fails to replace within the reasonable time the unfit and
substandard materials, equipment, technical documents or the thing
transferred for processing (treatment), does not change the directions on
the method of performing the work or does not take other necessary
measures to remove the circumstances threatening its fitness, the
contractor shall have the right to refuse to execute the work and labour
contract and claim the damages caused by the termination of the contract.
Article 717. The Customer's Refusal to Execute the Work and Labour
Contract
Unless otherwise stipulated by the work and labour contract, the
customer may at any time before the delivery of the result of the work to
him refuse the execute the contract by paying to the contractor a part of
the fixed price in proportion to the part of the work performed before
the receipt of the notice about the refusal of the customer to implement
the contract. The customer shall also be obliged to compensate the
contractor's losses, caused by the termination of the work and labour
contract, within the limits of the difference between the price fixed for
the entire work and the part of the price paid put for the performed
work.
Article 718. The Customer's Assistance
1. In cases, in the scope and in the order, provided for by the work
and labour contract, the customer shall be obliged to assist the
contractor in the performance of the work.
In case of default on this duty by the customer the contractor shall
have the right to claim damages, including additional costs caused by
downtime or by putting off the dates of the performance of the work, or
by the increase in the price of the work, indicated in the contract.
2. In cases where it has become impossible to perform the work under
the work and labour contract owing to the customer's actions or omission,
the contractor shall have the right to pay the price, indicated in the
contract, with account of the performed part of the work.
Article 719. Default on the Customer's Reciprocal Obligations Under
the Work and Labour Contract
1. The contractor shall have the right not to proceed to the work or
to suspend the work he began in cases where the breach by the customer of
his obligations under the work and labour contract, in particular, the
non-supply of materials, equipment, technical documents or the thing
subject to processing (treatment), prevents the execution of the contract
by the contractor, and also in the presence of the circumstances
evidencing that the said circumstances will not be discharged in the
fixed period (Article 328).
2. Unless otherwise stipulated by the work and labour contract, the
contractor shall have the right to refuse the execute the contract and to
claim damages in the presence of circumstances, referred to in Item 1 of
this Article.
Article 720. The Acceptance by the Customer of the Work Fulfilled by
the Contractor
1. Within the time-limit and in the order, provided for by the work
and labour contract, the customer shall be obliged to inspect with the
contractor's participation the result of the work and to accept the
performed work; in the event of the discovery of departures from the
contract that worsen the result of the work or of any other shortcomings
in the work, the customer shall be obliged to state at once about this to
the contractor.
2. The customer who has discovered shortcomings in the work during
its acceptance shall have the right to refer to them in cases where the
deed or any other document testifying to the acceptance has specified
these shortcomings or the possibility of a subsequent presentation of the
claim about their removal.
3. Unless otherwise stipulated by the work and labour contract, the
customer who has accepted the work without its check shall be deprived of
the right to refer to the shortcomings in the work which could be
ascertained in the usual method of its acceptance (obvious shortcomings).
4. The customer who has discovered in the work after its acceptance
departures from the work and labour contract or other defects which could
not be identified by the usual method of acceptance (latent defects),
including those that were deliberately hidden by the contractor, shall be
obliged to inform the contractor about this within the reasonable period
upon their discovery.
5. In case a dispute has arisen between the customer and the
contractor over the defects of the fulfilled work or their causes, an
expert examination shall be scheduled. Expenses on the expert examination
shall be borne by the contractor, except for the cases when experts have
found out that there are no breaches by the contractor of the work and
labour contract or a causal relationship between the contractor's actions
and the discovered defects. In said cases the expenses on the expert
examination shall be borne by the party which has called for the schedule
of the expert examination, and if was scheduled by agreement between the
parties, the expenses shall be borne by the parties in equal shares.
6. Unless otherwise stipulated by the work and labour contract, in
event of the customer's evasion from the acceptance of the fulfilled
work, the contractor shall have the right, upon the expiry of one month
since the day when as per the contract the result of the work should have
been turned over to the customer, provided the latter makes subsequently
two warnings of the customer to sell the result of the work and to place
the avails, minus all the payments due to the contractor, on the
customer's deposit in the procedure, provided for by Article 327 of this
Code.
7. If the evasion of the customer from the acceptance of the
fulfilled work has involved a delay in the delivery of the work, the risk
of accidental destruction of the thing manufactured (processed or
treated) shall be recognized as passed to the customer at the time when
the transfer of the thing should have taken place.
Article 721. The Quality of the Work
1. The quality of the work performed by the contractor shall
correspond to the terms and conditions of the contract and in the absence
or in the event of the incompleteness of these terms and conditions - to
the requirements usually made to the work of appropriate kind. Unless
otherwise stipulated by the law, other legal acts or the contract, the
result of the fulfilled work shall possess, at the time of its transfer
to the customer, the properties, referred to in the contract, or
determined by the usually made requirements and shall be suitable within
a reasonable period for the use, stipulated by the contract, for the
usual use of the result of the work of this kind.
2. If the law or other legal acts provide in the statutory manner
for mandatory requirements for the work to be performed under the work
and labour contract, the contractor acting as a businessman shall be
obliged to perform the work by observing these mandatory requirements.
The contractor may assume under the contract the obligation of
fulfilling the work that meets the requirements for quality higher than
the requirements made obligatory for the parties.
Article 722. The Guarantee of the Quality of the Work
1. In case where the law, other legal acts, the work and labour
contract or the customs of business turnover provides for a guarantee
period for the result of the work, the result of the work shall
correspond to the terms and conditions of the contract for quality during
the entire guarantee period (Item 1 of Article 721).
2. Unless otherwise stipulated by the work and labour contract, the
guarantee of the quality of the result of the work shall extend to all
the components of the result of the work.
Article 723. The Contractor's Liability for Improper Quality of the
Work
1. In cases where the work has been performed by the contractor with
departures from the work and labour contract which have worsened the
result of the work or with other defects which make it unsuitable for the
use, envisaged by the contract, or in the absence of the relevant
condition of unfitness for the usual use in the contract, the customer
shall have the right, unless otherwise stipulated by the law or the
contract, to demand from the contractor the following actions at his
option:
gratuitous removal of defects within the reasonable period;
an adequate reduction of the price fixed for the work;
reimbursement of his expenses incurred in the elimination of
defects, when the customer's right to remove them is provided for by the
work and labour contract (Article 397).
2. Instead of the removal of the defects for which he is responsible
the contractor shall have the right to perform gratis the work anew with
the compensation to the customer of the losses caused by the delay in the
execution of the work. In this case the customer shall be obliged to
return the result of the work to the contractor, if such return is
possible according to the nature of the work.
3. If departures in the work from the terms and conditions of the
work and labour contract or any other shortcomings of the result of the
work have not been eliminated in the reasonable period or are substantial
and unremovable, the customer shall have the right to refuse to execute
the contract and claim damages.
4. The proviso of the work and labour contract about the release of
the contractor from the liability for definite shortcomings shall not
absolve him from the liability, if it is proved that such shortcomings
have arisen due to the contractor's faulty actions or inaction.
5. The contractor who has submitted materials for the fulfilment of
the work is responsible for their quality under the rules for the
seller's liability for substandard goods (Article 475).
Article 724. The Terms of Discovery of the Result of the Work of
Improper Value
1. Unless otherwise stipulated by the law or the work and labour
contract, the customer shall have the right to make claims relating to
the improper quality of the result of the work, provided that it was
discovered during the period of time, fixed by this Article.
2. In case where no guarantee period is fixed for the result of the
work, claims relating to the shortcomings of the result of the work may
be made by the customer, provided they have been disclosed during the
reasonable period, but within two years since the day of the delivery of
the result of the work, unless different time-limits have been fixed by
the law, the contract or the customs of business turnover.
3. The customer shall have the right to make claims, associated with
the shortcomings in the result of the work, discovered during the
guarantee period.
4. In case where the guarantee period provided for by the contract
is less then two years and the shortcomings of the result of the work
have been discovered by the customer upon the expiry of the guarantee
period but within two years since the time envisaged by Item 5 of this
Article, the contractor shall bear liability, if the customer proves that
the shortcomings arose before the delivery of the result of the work to
the customer or for reasons that arose before this time.
5. Unless otherwise stipulated by the work and labour contract, the
guarantee period (Item 1 of Article 722) shall begin to run since the
time when the result of the fulfilled work was accepted or should have
accepted by the customer.
6. The rules contained in Items 2 and 4 of Article 471 of this Code
shall be applied to the computation of the guarantee period under the
work and labour contract, unless otherwise stipulated by the law, other
legal acts, the agreement of the parties or unless the contrary follows
from the specifics of the work and labour contract.
Article 725. The Statute of Limitation for the Improper Quality of
the Work
1. The period of limitation for claims made in connection with the
improper quality of the work, performed under the work and labour
contract, shall be one year, which the period of limitation for buildings
and structures shall be determined according to the rules of Article 196
of this Code.
2. If under the work and labour contract the result of the work has
been accepted in parts, the period of limitation shall begin to run since
the day of the acceptance of the result of the work as a whole.
3. If the law, other legal acts or the work and labour contract
provide for a guarantee period and the statement of claim for the
shortcomings of the result of the work has been made during the guarantee
period, the period of limitation, referred to in Item 1 of this Article,
shall run begin with the day of the statement for the shortcomings.
Article 726. The Duty of the Contractor to Transfer Information to
the Customer
The contractor shall be obliged to transfer together with the result
of the work information on the operation or any other use of the subject
of the work and labour contract, if this is provided by the contract or
if the nature of information is such that without it is impossible to
make use of the result of the work for the purposes, indicated in the
contract.
Article 727. The Confidentiality of Information Received by the
Parties
If the party thanks to the discharge of its obligation under the
work and labour contract has received from the other party information
about new decisions and technical knowledge, including knowledge not
protected by law, and also information that can be regarded as a
commercial secret (Article 139), the party which has received such
information shall have no right to communicate it to the third persons
without the consent of the other party.
The procedure and conditions for the use of such information shall
be determined by the agreement of the parties.
Article 728. The Return by the Contractor of the Property
Transferred by the Customer
In cases where the customer dissolves the work and labour contract
on the basis of Item 2 of Article 715 or Item 3 of Article 723 of this
Code, the contractor shall be obliged to return the materials and
equipment, supplied by the customer, the thing transferred for processing
(treatment) and other property or to hand them over to the person
indicated by the customer, and if this has proved to be impossible - to
replace the value of the materials, equipment and other property.
Article 729. The Consequences of the Termination of the Work and
Labour Contract Before the Acceptance of the Result of
the Work
Should the work and labour contract cease to be valid on the
grounds, provided for by the law or the contract, before the acceptance
by the customer of the result of the work, performed by the contractor
(Item 1 of Article 720), the customer shall have the right to demand the
transfer to him of the result of the incomplete work with the
compensation of the contractor's expenses.
§ 2. The Domestic Contract
Article 730. The Domestic Contract
1. Under the domestic contract the contractor who carries on
appropriate business shall undertake to perform the work assigned by the
individual (customer) to satisfy the customer's household and other
personal requirements, while the customs shall undertake to accept the
work and to pay for it.
2. The domestic contract is a public agreement (Article 426).
3. The laws on the protection of the customers' rights and other
legal acts adopted in accordance with them shall be applicable to the
relations under the domestic contract which are not regulated by this
Code.
Article 731. The Guarantees of the Customer's Rights
1. The contractor shall have no right to impose on the customer the
inclusion of an additional work or service in the domestic contract. The
customer shall have the right to refuse to pay for the work or service
not specified by the contract.
2. The customer shall have the right to refuse to execute the
domestic contract at any time before the delivery of the work to him by
paying to the contractor a part of the fixed price in proportion to the
part of the work, performed before the notification about the waiver of
the execution of the contract and by reimbursing the contractor's
expenses incurred prior to this time for the purpose of the fulfilment of
the contract, unless they form the said part of the price of the work.
The terms and conditions of the contract which deprive the customer of
this right shall be void.
Article 732. The Provision to the Customer of Information about the
Offered Work
1. The contractor shall be obliged, before the conclusion of a
domestic contract, to offer to the customer the necessary and trustworthy
information about the offered work, its kinds and specific features, the
price and the form of payment, and also to provide the customer with
other information relating to the contract at his request. If this is of
relevance due to the nature of the work, the contractor shall indicate to
the customer the concrete person who will perform this work.
2. If the customer was not afforded the possibility of receiving
immediately at the place of the conclusion of a consumer work contract
the information on the work indicated in Item 1 of this Article, it may
demand from the contractor the compensation for damages caused by
ungrounded evasion to conclude the contract (Item 4 of Article 445).
The customer may demand the cancellation of a concluded consumer
work contract without payment for the work done and also the compensation
for damages when, as a result of the incompleteness or inaccuracy of the
information received from the contractor, a contract was concluded for
the performance of work not having the characteristics that the consumer
had in mind.
The contractor that did not finish the customer the information on
the work indicated in Item 1 of this Article shall bear responsibility
also for the defects of the work which arose after its transfer due to
the absence of such information therewith.
Article 733. The Performance of the Work from the Contractor's
Material
1. If the work under the domestic contract is to be performed from
the contractor's materials, the latter shall be paid by the customer
during the conclusion of the contract in full or in part, indicated in
the contract, with the final settlement at the time of the receipt by the
customer of the work fulfilled by the contractor.
In conformity with the contract the material may be supplied by the
contractor on credit, including with the proviso of payment by the
customer for the material by instalments.
2. The change of the price of the contractor's material after the
conclusion of the domestic contract shall involve no recalculation.
Article 734. The Fulfilment of the Work from the Customer's
Materials
If the work under the domestic contract is fulfilled from the
customer's materials, the receipt or any other document issued by the
contractor to the customer during the conclusion of the contract shall
indicate the exact name, description and price of the materials to be
determined by the agreement of the parties. The estimation of the
materials in the receipt or any other similar document may be
subsequently disputed by the customer in court.
Article 735. The Price and Payment for the Work
The price of the work in the domestic contract shall be determined
by the agreement of the parties and may not be higher than that fixed or
regulated by the respective state bodies. The work shall be paid by the
customer after it is finally delivered by the contractor. With the
customer's consent the work may be paid by him during the conclusion of
the contract in full or by giving an advance.
Article 736. The Warning by the Customer about the Conditions of the
Use of the Fulfilled Work
In the event of the delivery of the work to the customer the
contractor shall be obliged to inform him about the requirements to be
observed for the effective and sage use of the result of the work, and
also about the consequences possible for the customer himself and other
persons in case of non-observance of the relevant requirements.
Article 737. The Consequences of the Discovery of Shortcomings in
the Fulfilled Work
1. In case of discovery of defects at the time of acceptance of the
result of the work or after its acceptance during the quarantee period,
and is it has not been established, then during a reasonable period but
not later than two years (for immovable property, five years) from the
day of the acceptance of the result of the work, the customer may at its
choice exercise one of the rights stipulated in Article 723 of this Code
or demand the cost-free repeat performance of the work or compensation
for the expenditures borne by it for the correction of the shortcomings
with its own funds or by third persons.
2. In case of discovery of essential defects of the result of the
work the customer may raise a demand to the contractor for the cost-free
removal of such defects if is proves that they arose before the
acceptance of the result of the work by the customer or for reasons that
arose before that moment. This demand may be raised by the customer if
the indicated defects were discovered upon the expiry of two years (for
immovable property, five years) from the day of the acceptance of the
result of the work by the customer, but within the limits of the period
of service established by for the result of the work or during ten years
from the day of the acceptance of the result of the work by the customer
if the period of service has not been established.";
3. In case of default on the contractor's claim, referred to in Item
2 of this Article, the customer shall have the right during the same
period to demand either the return of a part of the price paid for the
work or the reimbursement of the expenses incurred in connection with the
removal of the shortcomings by the customer with his own forces or with
the help of third persons or refuse to perform the contract and demand
the compensation for the inflicted losses.
Article 738. The Consequences of the Customer's Failure to Appear to
Receive the Result of the Work
In the event the customer has failed to appear to receive the result
of the fulfilled work or has evaded its acceptance, the contractor shall
have the right to sell the result of the work at a reasonable price,
while making a written warning of the customer, upon the expiry of two
months since such warning and to place the avails, minus all the payments
due to the contractor, on the deposit account in the order, prescribed by
Article 327 of this Code.
Article 739. The Customer's Rights in Case of Improper Fulfilment
or Non-fulfilment of the Work under the Domestic
Contract
In the event of improper fulfilment or non-fulfilment of the work
under the domestic contract the customer may avail himself of the rights,
granted to the buyer in compliance with Articles 503-505 of this Code.
§ 3. The Building Contract
Article 740. The Building Contract
1. Under the building contract the contractor shall undertake in the
period stipulated by the contract to build by the assignment of the
customer a project or to perform other construction works, whereas the
customer shall undertake to create for the contractor requisite
conditions for the performance of the works, to accept their result and
pay the specified price.
2. The building contract shall be concluded to build or reconstruct
an enterprise or building (including a dwelling house), to erect any
other project, and also to perform assembly, start-up and adjustment
operations, and other works indissolubly related to the project
concerned. The rules for the building contract shall be also applied to
the works involved in the major repairs of buildings and structures,
unless otherwise stipulated by the contract.
In cases provided for by the contract the contractor shall assume
the duty of running the project after it has been accepted by the
customer during the period indicated in the contract.
3. In cases where under the building contract the contractor fulfils
the works in order to meet the household and other personal needs of the
individual (customer), the rules of the second paragraph of this Article
on the customer's rights shall be accordingly applied to such contract.
Article 741. The Allocation of Risk Between the Parties
1. The risk of accidental destruction of, or accidental damage to,
the building project, which makes up the subject of the building
contract, shall be borne by the contractor before this project is
accepted by the customer.
2. If the building project is destroyed or damaged before the
customer has accepted it owing to the substandard materials, supplied by
the customer (details, structures), or equipment or owing to the
execution of mistaken directions of the customer, the contractor shall
have the right to demand the payment for all the cost of the works,
specified by the estimate, provided that he has fulfilled the duties,
envisaged by Item 1 of Article 716 of this Code.
Article 742. The Insurance of the Building Project
1. The building contract may provide for the duty of the party to
insure appropriate risks if it runs the risk of accidental destruction
of, or accidental damage to, the building project, materials, equipment
and other assets, used in construction, or bears liability for the
infliction of damage to other persons during construction.
The party that bears the obligation for insurance shall present to
the other party the proofs of the conclusion by it of the insurance
contract on the terms, provided for by the building contract, including
data on the insurer, the insurance sum and insured risks.
2. Insurance shall not release the appropriate party from the duty
of taking necessary measures to prevent the onset of an insured accident.
Article 743. Technical Documentation and the Estimate
1. The contract shall be obliged to carry on construction and the
related works in accordance with the technical documents determining the
scope and content of the works and other requirements made for them and
with the estimate fixing the price of the works.
In the absence of other directions the building contract implies
that the contractor is obliged to perform all the works indicated in
technical documents and the estimate.
2. The building contract shall define the composition and content of
technical documentation, and also provide which of the parties and by
which date it should submit relevant documents.
3. The contractor who has discovered in the process of construction
the works which have not been recorded in technical documents and in this
connection the need for additional works and for augmenting the detailed
estimate of the cost of construction shall be obliged to inform the
customer about this.
If the contractor has failed to receive from the customer a reply to
his information during 10 days, unless the law or the building contract
provides for a different date, he shall be obliged to suspend the
corresponding works and charge the losses caused by downtime to the
customer's account. The customer shall be released from the compensation
of these losses, if he proves that there is no need for additional works.
4. The contractor who fails to discharge the obligation,
established by Item 3 of this Article, shall be deprived of the right to
demand from the customer the payment for the fulfilled additional works
and the compensation for the relevant losses, unless he proves the need
for immediate actions in the interests of the customer, particularly in
connection with the fact that the suspension of the works could lead to
the destruction of, or damage to, the building project.
5. With the consent of the customer with the conduct and payment of
additional works the contractor shall have the right to refuse to perform
them only in cases where they do not enter in the sphere of the
contractor's professional activity or cannot be performed by the
contractor for reasons beyond his control.
Article 744. Introduction of Changes to Technical Documentation
1. The customer shall have the right to introduce changes to
technical documentation, unless related additional works exceed in cost
terms 10 per cent of the total estimate cost of construction and change
the nature of the works, envisaged in the building contract.
2. Changes shall be made in technical documentation in the scope
greater than that, indicated in Item 1 of this Article, on the basis of
the additional estimate agreed upon by the parties.
3. The contractor shall be obliged in accordance with Article 450 of
this Code to review the estimate, if the cost of the works has exceeded
the estimate by not less than 10 per cent for the reasons beyond his
control.
4. The contractor shall have the right to demand the reimbursement
of reasonable expenses incurred by him in connection with the
ascertainment and removal of defects in technical documentation.
Article 745. The Supply of Project Construction with Materials and
Equipment
1. The duty of supplying project construction with materials,
including details and structures, or equipment shall be borne by the
contractor, unless the building contract provides for the supply of
construction as a whole or in certain part by the customer.
2. The party which is obliged to supply project construction shall
bear the liability for the revealed impossibility to make use of its
supplied materials or equipment without the deterioration of the quality
of the works being performed, unless he proves that their impossible use
is due to the circumstances under the control of the other party.
3. In case of the revealed impossibility of making use of the
materials and equipment supplied by the customer without the
deterioration of the quality of the works being performed and of the
customer's refusal to replace them, the contractor shall have the right
to waive the building contract and demand that the customer pay the price
of the contract in proportion to the fulfilled part of the works.
Article 746. The Payment for Works to Be Done
1. The payment for the works done by the contractor shall be made by
the customer in the amount provided for by the estimate within the time
and in the order prescribed by the law or the building contract. In the
absence of appropriate references in the law or the contract the payment
for works shall be made in accordance with Article 711 of this Code.
2. The building contract may provide for the payment for works in
the lump and in full scope after the projects is accepted by the
customer.
Article 747. The Customer's Additional Obligations under the
Building Contract
1. The customer shall be obliged to provide in time a land plot for
construction. The area and condition of the land plot to be provided
shall correspond to the terms of the building contract and in the absence
of such conditions shall ensure the timely start of the works, their
normal performance and completion on due date.
2. In cases and in the procedure, envisaged by the building contract
the customer shall be obliged to convey to the contractor for use the
buildings and structures necessary for the accomplishment of the works,
to transport cargoes at his address, to lay out temporary networks of
power, water and steam supply and render other services.
3. Payments for the services rendered by the customer and indicated
in Item 2 of this Article shall be made in cases and on the terms,
provided for by the building contract.
Article 748. Control and Supervision by the Customer over the
Performance of Works Under the Building Contract
1. The customer shall have the right to exercise control and
supervision over the progress and quality of the works being performed,
the observance of the period of their fulfilment (schedule), the quality
of the materials supplied by the contractor, and also over the proper use
by the contractor of the customer's materials without interfering in the
day-to-day economic activity of the contractor.
2. The customer who has discovered during his control and
supervision over the performance of the works departures from the terms
and conditions of the building contract, which may deteriorate the
quality of the works, or any other shortcomings, shall be obliged to
inform the contractor about this without delay. The customer who has
failed to make such statement to the contractor shall forfeit his right
to refer in future to the shortcomings he will detect.
3. The contractor shall be obliged to implement the customer's
directions, received during construction, unless such directions
contradict the terms and conditions of the building contract and
represent intervention in the day-to-day economic activity of the
contractor.
4. The contractor who has fulfilled the works improperly shall have
no right to refer to the fact that the customer failed to exercise his
control and supervision over their performance, except for the cases when
the obligation to exercise such control and supervision has been placed
on the customer by law.
Article 749. The Participation of an Engineer (Engineering
Organization) in the Exercise of the Rights and in the
Discharge of the Obligations of the Customer
For the purposes of exercising control and supervision over project
construction and of adopting on his behalf of decisions in relations with
the contractor the customer may conclude on his own, without the
contractor's consent, a contract for the rendering of such services to
the customer with the relevant engineer (engineering organization). In
this case the building contract shall define the functions of such
engineer (engineering organization), connected with the consequences of
his actions for the contractor.
Article 750. Cooperation of the Parties to the Building Contract
1. If hindrances to the proper execution of the building contract
come to the surface during project construction and the related works,
each party shall be obliged to take all reasonable measures under its
control in order to remove such hindrances. The party which has failed to
discharge this obligation shall forfeit its right to claim damages
caused by the failure to eliminate the relevant hindrances.
2. The expenses of the party incurred in the discharge of the
obligations, indicated in Item 1 of this Article, shall be subject to
reimbursement by the other party in cases where this is stipulated by the
building contract.
Article 751. The Contractor's Obligations of Protecting the
Environment and of Providing Safety for Building Works
1. The contractor shall be obliged to observe the requirements of
the law and other legal acts on environmental protection and safety of
building works in the process of construction and the related works.
The contractor shall bear liability for the breach of said
requirements.
2. The contractor shall have no right to use during the works being
done the materials and equipment, supplied by the customer, or fulfil his
directions, if they may lead to the breach of the requirements,
obligatory for the parties, for the protection of the environment and the
safety of building works.
Article 752. The Consequences of the Laying-up of Project
Construction
If the works under the building contract have been suspended and the
project construction has been laid-in for the reasons beyond the control
of the parties, the customer shall be obliged to pay in full to the
contractor for the works fulfilled up to the time of the laying-up of the
work, and also to reimburse the expenses caused by the need to terminate
the works and to lay-up the project construction with the offset of the
benefits which the contractor has received or could receive due to the
termination of the works.
Article 753. The Delivery-Acceptance of Works
1. The customer who has received the communication of the contractor
about the delivery of the result of the works performed under the
building contract or, if this is provided for by the contract, of the
fulfilled stage of the works, shall be obliged to proceed to it
acceptance.
2. The customer shall organize and effect the acceptance of the
result of the works at his own expense, unless otherwise stipulated by
the building contract.
In cases envisaged by the law or any other legal acts the
representatives of state bodies and local self-government bodies shall
take part in the acceptance of the result of the works.
3. The customer who has accepted the result of a particular stage of
the works shall bear the risk of the consequences of the destruction of,
or damage to, the result of the works which have taken place not through
the fault of the contractor.
4. The delivery of the result of the works by the contractor and the
acceptance of it by the customer shall be formalized by the certificate,
signed by both parties. If one of the parties refuses to sign the
certificate, a note about this shall be put down in it, with the
certificate being signed by the other party.
A unilateral certificate of acceptance of the result of the works
may be recognized by a court of law as invalid only in case of the
motives of the refusal to sign the acceptance certificate have been
recognized by it as sound.
5. In cases where this is provided for by the law or the building
contract or follows from the nature of the works performed under the
contract, the acceptance of the result of the works shall be preceded by
preliminary tests. In these cases the acceptance may take place only with
the positive result of the preliminary tests.
6. The customer shall have the right to refuse to accept the result
of the works in case of the discovery of shortcomings, which exclude the
possibility of its use for the purpose, indicated in the building
contract and may not be removed by the contractor or the customer.
Article 754. The Contractor's Liability for the Quality of Works
1. The contractor shall bear liability to the customer for the
departures from the requirements, provided for by technical documents and
by the building norms and rules obligatory for the parties, and also for
the failure to achieve this building project's indicators, indicated in
the technical documents, including the enterprise's industrial capacity.
In the event of the reconstruction (renewal, reorganization,
restoration, etc.) of a building or structure the contractor shall bear
liability for the reduction or loss of the durability, stability and
reliability of the building, structure or a part thereof.
2. The contractor shall bear no liability for small departures from
technical documents, made without the customer's consent, if he proves
that they have not influences the quality of project construction.
Article 755. Guarantees of Quality in the Building Contract
1. Unless otherwise stipulated by the building contract, the
contractor shall guarantee the achievement by the construction project of
the indicators indicated in technical documents and the possibility of
using the project in keeping with the building contract throughout the
guarantee period. The statutory guarantee period may be extended by the
agreement of the parties.
2. The contractor shall bear liability for defects, discovered
during the guarantee period, unless he proves that they occurred due to
the normal wear and tear of the project or of the parts thereof, its
incorrect instructions, elaborated by the customer himself or by the
third persons attracted by him, the improper repair of the project,
carried out by the customer himself or by the third persons attracted by
him.
3. The running of the guarantee period lapses for all the time
during which the project could not be exploited due to the defects for
which the contractor is liable.
4. In case of discovery of defects, indicated in Item 1 of Article
754 of this Code, during the guarantee period, the customer shall inform
the contractor about them within reasonable time upon their discovery.
Article 756. The Time-limits of Discovery of the Improper Quality of
Building Works
In the event of making claims for the improper quality of the result
of the works, the rules, specified by Items 1-5 of Article 724 of this
Code shall be applied.
The deadline for the discovery of defects shall be five years in
conformity with Items 2 and 4 of Article 724 of this Code.
Article 757. Elimination of Defects at the Expense of the Customer
1. The building contract may provide for the obligation of the
contractor to eliminate on the demand of the customer and at his expense
the defects for which the contractor is not liable.
2. The contractor shall have the right to refuse to perform the
obligation, indicated in Item 1 of this Article, in cases where the
removal of defects is not connected directly with the subject of the
contract or cannot be realized by the contractor for the reasons beyond
his control.
§ 4. Contract for Design and Survey Works
Article 758. Contract for Design and Survey Works
Under the contract for design and survey works the contractor
(designer or surveyor) shall undertake to elaborate technical
documentation of the customer and/or perform survey works, whereas the
customer shall undertake to accept and pay for their result.
Article 759. Initial Data for the Performance of Design and Survey
Works
1. Under the contract for design and survey works the customer shall
be obliged to give to the contractor his assignment for designing, and
also other initial data needed for drawing up technical documentation. An
assignment for the performance of design works may be prepared by the
contractor on behalf of the customer. In this case the assignment shall
become mandatory for the parties since the time of its approval by the
customer.
2. The contractor shall be obliged to observe the requirements
containing in the assignment and in other initial data for the
performance of design and survey works, and shall have the right to
depart from them only with the customer's consent.
Article 760. The Contractor's Obligations
1. Under the contract for design and survey works the contractor
shall be obliged:
to perform the works in keeping with the assignment and other
initial data on designing and with the contract;
to coordinate the ready technical documents with the customer and,
whenever necessary, together with the customer - with competent state
bodies and local self-government bodies;
to transfer to the customer ready technical documents and the
results of the survey works.
The contractor shall have no right to give technical documents to
third persons without the customer's consent.
2. Under the contract for design and survey works the contractor
shall guarantee to the customer that third persons do not have the right
to prevent the performance of the works or restrict their performance on
the basis of the technical documentation prepared by the contractor.
Article 761. The Contractor's Liability for the Improper Performance
of Design and Survey Works
1. Under the contract for design and survey works the contractor
shall bear liability for the improper drawing up of technical documents
and for the performance of survey works, including defects discovered
later on during construction, and also in the process of the exploitation
of the project, set up on the basis of the technical documents and the
data of the survey works.
2. In the event of discovery of defects in technical documents or in
survey works the contractor shall be obliged to remake technical
documentation gratis on the customer's demand and accordingly carry out
the necessary additional survey works, and also to reimburse to the
customer the losses caused, if the law or the contract for performance of
design and survey works establishes otherwise.
Article 762. The Customer's Obligations
Under the contract for design and survey works the customer shall be
obliged to take the following measures, unless otherwise stipulated by
the contract:
to pay to the contractor the fixed price in full after the
completion of all works or to pay it in instalments after the completion
of individual stages of the work;
to use technical documentation received from the contractor only for
the purposes, provided for by the contract, not to turn over technical
documents to third persons and not to divulge the data contained therein
without the contractor's consent;
to render assistance to the contractor in the performance of design
and survey works in the scope and on the terms and conditions stipulated
by the contract;
to participate together with the contractor in the coordination of
ready technical documentation with relevant state bodies and local
self-government bodies;
to reimburse the contractor's additional expenses, incurred by
changes in the initial data for the performance of design and survey
works due to the circumstances beyond the contractor's control;
to draw the contractor in the participation in the case on a claim
filed by a third person to the contractor in connection with the defects
of the compiled technical documents or the performed survey works.
§ 5. Contract Works for State Needs
Article 763. The State Contract for the Performance of Contract
Works to Meet State Needs
1. Contract building works (Article 740), design and survey works
(Article 758), intended for meeting the needs of the Russian Federation
or a subject of the Russian Federation and financed at the expense of the
corresponding budgets and extra-budgetary sources, shall be performed on
the basis of the state contract for the fulfilment of contract works to
meet state needs.
2. Under the state contract for contract works to meet state needs
(hereinafter referred to as the state contract) the contractor shall
undertake to perform building, design and other works related to the
construction and repair of the projects of a production and
non-production character and to transfer them to the state customer,
whereas the state customer shall undertake to accept the fulfilled works,
to pay for them or to ensure their payment.
Article 764. The Parties to the State Contract
Under the state contract the role of the state customer shall be
payed by the state body which possesses the required investment
resources or by the organization vested by the relevant state body with
the right to dispose of such resources, while the role of the contractor
shall be played by a legal entity or individual.
Article 765. The Grounds and Procedure for the Conclusion of a State
Contract
The grounds and procedure for the conclusion of a state contract
shall be determined in keeping with the provisions of Articles 527 and
528 of this Code.
Article 766. The Contents of the State Contract
1. The state contract shall contain the terms of the scope and value
of the work subject to performance, the time-limits of its beginning and
end, the amount and procedure of financing and paying the works and the
methods of security of the parties' obligations.
2. In case where a state contract is concluded according to the
results of a tender for placing the order for contract works to meet
state needs, the terms and conditions of the state contract shall be
determined in accordance with the announced tender terms and the offer
tendered by the contractor who is recognized as the bidding winner.
Article 767. Changes in the State Contract
1. In case of the diminution of the resources of the corresponding
budget in the statutory manner, allocated for the financing of contract
works, the parties shall be obliged to agree upon new dates, and,
whenever necessary, other conditions of the performance of the works. The
contractor shall have the right to demand that the state customer
compensate the losses caused by changes in the dates of the fulfilment of
the works.
2. Unless otherwise stipulated by the law, changes in the state
contract, not associated with the circumstances, indicated in Item 1 of
this Article, shall be made by the agreement of the parties.
Article 768. Legal Regulation of the State Contract
The law on contracts for state needs shall be applicable to the
relations involved in state contracts for the fulfilment of contract
works for state needs in the part which is not regulated by this Code.
Chapter 38. Performance of Research and Development and
Technological Works
Article 769. Contracts for the Performance of Research and
Development and Technological Works
1. Under the contract for the performance of research and
development and technological works the executor shall be obliged to
carry out scientific research, specified by the customer's technical
assignment, while under the contract for the development and
technological works he shall be obliged to develop the sample of a new
product, elaborate design documentation or new technology for it, whereas
the customer shall undertake to accept the work and pay for it.
2. The contract with the executor may cover both the entire cycle of
research, development and manufacture of the sample of the new product
and its particular stages (elements).
3. Unless otherwise stipulated by the law or the contract, the risk
of accidental impossibility of executing contracts for the performance of
research and development and technological works shall be borne by the
customer.
4. The terms and conditions of the contracts for performance of
research and development and technological works shall correspond to the
laws and other legal acts on exclusive rights (intellectual property).
Article 770. The Performance of Works
1. The executor shall be obliged to carry out scientific research in
person. He shall have the right to draw third persons in the fulfilment
of a contract for scientific research works only with the customer's
consent.
2. During the performance of development or technological works the
executor shall have the right, unless otherwise stipulated by the
contract, to draw third persons in its execution. The rules for the
general contractor and subcontractor (Article 706) shall be applicable to
the relations between the executor and the third persons.
Article 771. The Confidentiality of Information Which Constitutes
the Subject of the Contract
1. Unless otherwise stipulated by the contracts for the performance
of research and development and technological works, the parties thereto
shall be obliged to ensure the confidentiality of information relating to
the subject of the contract, the progress of its execution and the
obtained results. The scope of information recognized as confidential
shall be determined by the contract.
2. Each party shall undertake to publish information to be
recognized as confidential and obtained during the performance of the
work only with the consent of the other party.
Article 772. The Rights of the Parties to the Results of the Works
1. The parties to the contracts for the performance of research and
development and technological works shall have the right to make use of
the works, including those amenable to legal protection, within the
framework of the contract and on its terms and conditions.
2. Unless otherwise stipulated by the contract, the customer shall
have the right to make use of the results of the work given to him by the
executor, including those amenable to legal protection, while the
executor shall have the right to use the obtained results of the works
for his own needs.
Article 773. The Executor's Obligations
The executor shall be obliged to take the following measures under
the contracts for the performance of research and development and
technological works:
to perform the works in keeping with the technical assignment agreed
upon with the customer and to turn over to the customer their results
within the period fixed by the contract;
to coordinate with the customer the necessity for the use of the
results of intellectual activity that belong to third persons and the
acquisition of rights to their use;
to remove the defects, made through his fault, in the fulfilled
works with his own forces and at his own expense, if they can involve
departures from the technical and economic parameters, envisaged by the
technical assignment or the contract;
to inform forthwith the customer about the ascertained impossibility
to receive the expected results or about the inexpediency of continuing
the work;
to guarantee to the customer the transfer of the results which have
been received under the contract and which do not break the exclusive
rights of other persons.
Article 774. The Customer's Obligations
1. In contracts for the performance of research and development and
technological work the customer shall be obliged to undertake the
following measures:
to give to the executor information needed for the fulfilment of the
work;
to accept the results of the fulfilled works and to pay for them.
2. The contract may also provide for the obligation of the customer
to give to the executor a technical assignment and to agree with him the
programme) technical and economic parameters) or the topics of the works.
Article 775. The Consequences of the Impossible Attainment of
Results of Scientific Research Works
If in the course of scientific research works it is found out that
it is impossible to attain results owing to the circumstances that are
beyond to executor's control, the customer shall be obliged to pay for
the value of the works carried out before the ascertainment of the
impossibility to obtain results, envisaged by the contract for the
performance of scientific research works, but not over and above the
corresponding part of the price of the work, indicated in the contract.
Article 776. The Consequences of the Impossible Continuation of
Research and Development and Technological Works
If during the performance of research and development and
technological works it is found out that the impossible or inexpedient
continuation of the works has arisen not through the fault of the
executor, the customer shall be obliged to pay for the expenses incurred
by the executor.
Article 777. The Liability of the Executor for the Breach of a
Contract
1. The executor shall be liable to the customer for breaking the
contracts for the performance of research and development and
technological works, unless he proves that such breach has taken not
through the fault of the executor (Item 1 of Article 401).
2. The executor shall be obliged to reimburse the losses caused by
him to the customer within the limits of the cost of the works in which
defects have been discovered, if the contract provides that they are
subject to compensation within the limits of the total cost of the works
under the contract. The lost profit shall be subject to compensation in
cases stipulated by the contract.
Article 778. Legal Regulation of the Contracts for the Performance
of Research and Development and Technological Works
The rules of Articles 708, 709 and 738 of this Code shall be
applicable accordingly to the dates of the fulfilment of works and to
their price, and also to the consequences of the customer's
non-appearance for the receipt of the results of the works.
The rules of Articles 763-768 of this Code shall be applicable to
the state contracts for the performance of research and development and
technological works to meet state needs.
Chapter 39. The Repayable Rendering of Services
Article 779. The Contract for the Repayable Rendering of Services
1. Under the contract of repayable rendering of services the
executor shall undertake to render services (to perform certain actions
or carry out certain activity) according to the customer's assignment,
while the customer shall undertake to pay for these services.
2. The rules of this Chapter shall be applicable to the contracts of
rendering the communication services, medical, veterinary, audit,
consulting, information, instruction, tourist and other services, except
for the services rendered under the contracts, envisaged by Chapters 37,
38, 40, 41, 44, 45, 46, 47, 49, 51 and 53 of this Code.
Article 780. The Execution of the Contract for the Repayable
Rendering of Services
Unless otherwise stipulated by the contract for the repayable
rendering of services, the executor shall be obliged to render the
services in person.
Article 781. Payment for Services
1. The customer shall be obliged to pay of the services rendered to
him within the period and in the procedure indicated in the contract for
the repayable rendering of services.
2. If it is impossible to execute the contract through the fault of
the customer, the services rendered shall be subject to full payment,
unless otherwise stipulated by the law or the contract for the repayable
rendering of services.
3. In case where it is impossible to execute the contract due to the
circumstances for which neither party is answerable, the customer shall
reimburse the executor's actual expenses, unless otherwise provided for
by the law or the contract for repayable rendering services.
Article 782. The Unilateral Refusal to Execute the Contract for the
Repayable Rendering of Services
1. The contractor shall have the right to refuse to execute the
contract for the repayable rendering of services, provided the executor's
actually incurred expenses are paid out.
2. The executor shall have the right to refuse to execute the
obligations under the contract for the repayable rendering of services,
provided the customer's losses are fully reimbursed.
Article 783. The Legal Regulations of the Contract for the Repayable
Rendering of Services
The general provisions on the work and labour contract (Articles
702-729) and the provisions on the domestic contract (Articles 730-739)
shall be applicable to the contract for the repayable rendering services,
unless this runs counter to Articles 779-782 of this Code, and also to
the specific subject of the contract for the repayable rendering of
services.
Chapter 40. Carriage
Article 784. General Provisions on Carriage
1. Cargoes, passengers and baggage shall be transported on the basis
of the contract of carriage.
2. The general conditions of carriage shall be determined by
transport charters and codes, other laws and rules issued in accordance
with these laws.
The conditions of the carriage of cargoes, passengers and baggage by
particular transport vehicles, and also the liability of the parties for
this transportation shall be determined by the agreement of the parties,
unless otherwise stipulated by this Code, transport charters and codes,
other laws and rules issued in conformity with them.
Article 785. The Contract of Carriage of Cargo
1. Under the contract of carriage of cargo the carrier shall
undertake to deliver the cargo entrusted to him by the consignor to the
point of destination and to release it to the person (consignee)
authorized to receive it, while the consignor shall undertake to pay a
fixed charge for the carriage of cargo.
2. The conclusion of a contract for the carriage of cargo shall be
confirmed by the drawing up and issue of a consignment bill to the
consignor of cargo (bill of lading or any other cargo document,
stipulated by the relevant transport charter or code).
Article 786. The Contract of Carriage of the Passenger
1. Under the contract of carriage of the passenger the carrier shall
undertake to transport the passenger to the point of destination, and in
case of delivery of luggage to the point of destination and to issue it
to the person authorized to receive it; the passenger shall undertake to
pay the fixed charge for the journey and for the carriage of luggage in
case of its registry.
2. The conclusion of a contract of the passenger carriage shall be
certified with a ticket, while the booking of luggage by the passenger -
with a luggage receipt.
The forms of the ticket and the luggage receipt shall be established
in the order, prescribed by transport charters and codes.
3. The passenger shall have the right in the order, prescribed by
the relevant transport charter or code:
to carry with himself his children free of charge or on other easy
terms;
to carry with himself hand luggage free of charge within the limits
of fixed norms;
to book luggage for carriage for a tariff charge.
Article 787. The Freight Contract
Under the freight contract (charter) one party shall undertake to
provide to the other party (affreighter) for charge the entire or partial
capacity of one or several transport facilities for one or several
voyages or flights for the haulage of cargoes, passengers and baggage.
Procedure for the conclusion of a freight contract, and also the
form of the said contract shall be established by transport charters and
codes.
Article 788. Through Mixed Traffic
The mutual relations of transport organizations that carry cargoes,
passengers and baggage with the aid of various transport vehicles under a
single transport document (through mixed traffic), and also the procedure
of the organization of this carriage shall be determined by the
agreements between the organizations of the respective types of
transport, concluded in keeping with the law on direct mixed (combined)
carriage.
Article 789. Carriage by Public Transport
1. The carriage realized by a profit-making organization shall be
recognized as the carriage by public transport, if it transpires from the
law, other legal acts, that the said organization is duty-bound to effect
the carriage of cargoes, passengers and baggage in case of an application
by any individual or legal entity.
The list of organizations which are obligated to effect the carriage
to be recognized as the carriage by public transport shall be published
in the established order.
2. The contract of carriage by public transport shall be a public
agreement (Article 426).
Article 790. Payment for Carriage
1. Payment for carriage, fixed by the agreement of the parties,
shall be collected for the transportation of cargoes, passengers and
baggage, unless otherwise stipulated by the law or other legal acts.
2. Payment for the carriage of cargoes, passengers and baggage by
public transport shall be estimated on the basis of the rates, approved
in the order, established by transport charters and codes.
3. Works and services, performed or rendered by the carrier at the
request of the cargo owner and not specified by rates, shall be paid by
the agreement of the parties.
4. The carrier shall have the right to withhold the cargo and
baggage, given to him for carriage, as security for the payments for
carriage due to him (Articles 359 and 360), unless otherwise stipulated
by the law, other legal acts, the contract of carriage or unless the
contrary follows from the substance of the obligation.
5. In cases where the laws or other legal acts have introduced
preferences for the payment for the carriage of cargoes, passengers and
baggage, the expenses incurred in this connection shall be reimbursed by
the transport organization from the resources of the appropriate budget.
Article 791. The Supply of Transport Vehicles, the Loading and
Unloading of Cargo
1. The carrier shall be obliged to drive up serviceable transport
vehicles in a condition fit for the carriage of cargo to the consignor
for loading cargo in time, fixed by the order accepted from him, the
contract of carriage or the agreement on the organization of carriage.
The consignor of cargo shall have the right to waiver the supplied
transport vehicles which are not fit for the carriage of cargo.
2. The loading (unloading) of cargo shall be carried out by the
transport organization or the consignor (consignee) in the procedure,
specified by the contract, with the observance of the provisions of
transport charters and codes and the rules promulgated in compliance with
them.
3. The loading (unloading) of cargo, realized by the forces and
means of the consignor (consignee), shall be effected in the periods of
time, stipulated by the contract, unless such periods have been fixed by
transport charters and codes and the rules adopted in conformity with
them.
Article 792. Time-limits for the Delivery of Cargo, Passengers and
Baggage
The carrier shall be obliged to deliver cargo, passengers or baggage
to the point of destination in the time-limits, fixed in the procedure,
stipulated by transport charters and codes, and in the absence of such
time-limits - within the reasonable period.
Article 793. Liability for Breaking the Obligations of Carriage
1. In case of default on the obligations of carriage or of improper
discharge of such obligations, the parties shall bear liability,
established by this Code, transport charters and codes, and also by the
agreement of the parties.
2. Agreements between transport organizations and passengers or
cargo owners on the limitation or elimination of the carrier's statutory
liability shall be void, except for the cases when the possibility of
such agreements is provided for by transport charters or codes for the
carriage of cargo.
Article 794. The Carrier's Liability for Failure to Drive up
Transport Vehicles and the Consignor's Liability for
Non-use of Driven-up Transport Vehicles
1. For failure to drive up transport vehicles for the carriage of
cargo in keeping with the accepted order or any other contract the
carrier shall bear the liability, established by transport charters and
codes and also by the agreement of the parties, and for failure to submit
cargo or for non-use of driven-up transport vehicles for other reasons
the consignor shall bear the liability, established by transport charters
and codes, and also by the agreement of the parties.
2. The carrier and the consignor shall be released from liability in
case of failure to drive up transport vehicles or of non-use of driven-up
transport vehicles, if this was due to the following reasons:
force majeure, and also other elements (fires, snow-drifts, floods)
and hostilities;
the termination or limitation of the carriage of cargo in certain
directions, which has been practiced in the order, prescribed by the
respective transport charter or code;
in other cases, provided for by transport charters and codes.
Article 795. The Liability of the Carrier for the Delayed Dispatch
of the Passenger
1. For the delayed dispatch of the transport vehicle which carries
the passenger or for the late arrival of such transport vehicle at the
point of destination (except for carriage in urban or suburban
communication) the carrier shall pay a fine to the passenger in the
amount, fixed by the corresponding transport charter or code, unless he
proves that the delay or lateness have taken place due to force majeure,
the removal of the malfunction of transport vehicles threatening the
lives and health of passengers or due to other circumstances beyond the
carrier's control.
2. If the passenger refuses to be carried because of the delayed
dispatch of a transport vehicle, the carrier shall be obliged to return
the fare to the passenger.
Article 796. The Liability of the Carrier for the Loss and Short
Delivery of, and Damage to, Cargo or Baggage
1. The carrier shall be liable for the non-safety of cargo or
baggage after it was accepted for carriage and before it was issued to
the consignee, the person authorized by him or the person authorized to
receive baggage, unless he proves that the loss and short delivery of, or
damage to, cargo or baggage have taken place due to the circumstances
which the carrier could not prevent and whose removal has not depended on
him.
2. The damage caused during the carriage of cargo or baggage shall
be recovered by the carrier in the following cases:
in case of the loss or short delivery of cargo of baggage - in the
amount of the value of the lost or missing cargo or baggage;
in case of the damage to cargo or baggage - in the amount of the sum
by which its value fell, and if it is impossible to restore the damaged
cargo or baggage - in the amount of its value;
in case of the loss of cargo or baggage delivered for carriage with
the announcement of its value - in the amount of the announced value of
cargo or baggage.
The value of cargo or baggage shall be determined on the basis of
its price, indicated in the seller's bill or envisaged by the contract,
and in the absence of a bill or with reference to the price in the
contract in terms of the price which under comparable circumstances is
usually charged for similar goods.
3. In addition to the restitution of the ascertained damage, caused
by the loss and short delivery or, or damage to, cargo or baggage, the
carrier shall return to the consignor (consignee) the payment for
carriage, recovered for the carriage of the lost, missing, spoiled or
damaged cargo or baggage, if this payment is not a part of the value of
cargo.
4. Documents on the causes of the non-safety of cargo or baggage
(commercial report, general form statement, etc.), compiled by the
carrier unilaterally, shall be subject to the appraisal by the court in
case of a dispute in addition to other documents certifying the
circumstances, which can serve as a ground for the liability of the
carrier, consignor or consignee of cargo or baggage.
Article 797. Claims and Suits in the Carriage of Cargoes
1. Before bringing a suit against the carrier that follows from the
carriage of cargo it is obligatory to make a claim on him in the
procedure stipulated by the respective transport charter or code.
2. A suit against the carrier may be brought by the consignor or
consignee in case of a full or partial refusal of the carrier to satisfy
the claim or in case of non-receipt of a reply from the carrier within 30
days.
3. The period of limitation on the claims following from the
carriage of cargo shall fixed in one year since the time, determined in
keeping with transport charters and codes.
Article 798. Contracts for the Organization of the Carriage of Cargo
In case of need for systematic carriage the carrier and the cargo
owner may conclude long-term contracts for the organization of carriage.
Under the contract of the organization of the carriage of cargo the
carrier shall undertake to accept in fixed time-limits, while the cargo
owner shall undertake to present cargo for carriage in the stipulated
scope. The contract for the organization of the carriage of cargo shall
determine the amounts, time-limits and other conditions for the provision
of transport facilities and for the presentation of cargo for carriage,
the procedure of payments, and also other conditions for the organization
of carriage.
Article 799. Contracts Concluded Between Transport Organizations
Contracts for the organization of the work of ensuring the carriage
of cargo (complex agreements, contracts for centralized delivery of cargo
and others) may be concluded between the organizations of different kinds
of transport.
Procedure for the conclusion of such contracts shall be determined
by transport charters and codes, other laws and other legal acts.
Article 800. The Carrier's Liability for the Infliction of Harm to
the Life and Health of a Passenger
The liability of the carrier for the harm inflicted to the life and
health of a passenger shall be determined according to the rules of
Chapter 59 of this Code, unless the law or the contract of carriage
provides for the carrier's increased liability.
Chapter 41. Transport Forwarding
Article 801. Contract of Transport Forwarding
1. Under the contract of transport forwarding one party (forwarding
agent shall undertake to perform or organize the performance of the
services of cargo carriage for reward and at the expense of the other
party (consignor or consignee as a client).
The contract of transport forwarding may provide for the forwarder's
obligation to organize the carriage of cargo by transport and along the
route, chosen by the forwarding agent or the client, the obligation of
the forwarding agent to conclude a contract (contracts) of the carriage
of cargo on behalf of the client or on his own behalf, to ensure the
dispatch and receipt of cargo, and also other obligations for carriage.
The contract of transport forwarding may provide as additional
services such operations necessary for the delivery of cargo as the
receipt of documents required for export or import, the performance of
customs and other formalities, the inspection of the quantity and
condition of cargo, its loading and unloading, the payment of duties,
fees and other expenses to be incurred by the client, the storage of
cargo, its receipt in the point of destination, and also the fulfilment
of other operations and the provision of services, specified by the
contract.
2. The rules of this Chapter shall also extend to the cases where in
keeping with the contract the obligations of the forwarding agent shall
be discharged by the carrier.
3. The conditions for the fulfilment of the contract of transport
forwarding shall be determined by the agreement of the parties, unless
otherwise stipulated by the law on transport forwarding, by other laws
and other legal acts.
Article 802. The Form of the Contract of Transport Forwarding
1. The contract of transport forwarding shall be concluded in
writing.
2. The client shall issue to the forwarding agent a power of
attorney, if it is necessary for the discharge of his obligations.
Article 803. The Liability of the Forwarding Agent under the
Contract of Transport Forwarding
For default on the obligations or improper discharge of obligations
the forwarding agent shall bear liability on the grounds and in the
amount which are determined in accordance with the rules of Chapter 25 of
this Code.
If the forwarding agent proves that the infringement of the
obligation is caused by the improper execution of the contracts of
carriage, the liability of this forwarding agent to the client shall be
determined by the same rules under which the relevant carrier is liable
to the forwarding agent.
Article 804. Documents and Other Information Submitted to the
Forwarding Agent
1. The client shall be obliged to submit to the forwarding agent
documents and other information about the properties of cargo, the terms
of its carriage, and also other information needed for the discharge of
the forwarder's obligation, specified by the contract of transport
forwarding.
2. The forwarding agent shall be obliged to inform the client about
the discovered shortcomings of received information, and in case of
incomplete information to request from the client additional data.
3. In case of the non-submission of the necessary information by the
client the forwarding agent shall have the right not to proceed to the
discharge of relevant obligations until the time of presenting such
information.
4. The client shall bear liability for the losses caused to the
forwarding agent in connection with the breach of the obligation of
presenting information, indicated in Item 1 of this Article.
Article 805. The Discharge of the Forwarding Agent's Obligations by
a Third Person
If it does not follow from the contract of transport forwarding that
the forwarder should discharge his duties in person, the forwarder shall
have the right to draw other persons in the discharge of his obligations.
The entrustment of a third person with the discharge of the
obligation shall not release the forwarder from the liability to the
client for the execution of the contract.
Article 806. Unilateral Refusal to Execute the Contract of Transport
Forwarding
Any party shall have the right to refuse to execute the contract of
transport forwarding by warning the other party within a reasonable
period.
In case of unilateral refusal to execute the contract the party
which stated his refusal shall reimburse to the other party the losses
caused by the dissolution of the contract.
Chapter 42. Loans and Credits
§ 1. Loans
Article 807. The Loan Agreement
1. Under the 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 the 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.
2. Foreign currency and currency values may be a subject of a loan
agreement on the territory of the Russian Federation with the observance
of the rules of Articles 140, 141 and 317 of this Code.
Article 808. The Form of the Loan Agreement
1. A loan agreement between individuals shall be concluded in
writing, if its sum of money exceeds in more than ten times the statutory
minimum amount of wages or salaries and regardless of the sum of money in
case where the lender is a legal entity.
2. In acknowledgment of a loan agreement and its terms and
conditions the borrower's receipt or another document certifying the
transfer of a definite sum of money or a certain quantity of things may
be presented.
Article 809. Interest Under the Loan Agreement
1. Unless otherwise stipulated by the law or the loan agreement, the
lender shall have the right to receive from the borrower interest for the
sum of the loan in the amount and in the procedure, specified by the
agreement. In the absence in the agreement of a clause on the amount of
interest, the latter shall be determined by the rate of bank interest
(the rate of refunding) in the place of residence of the lender or in the
place of the location of the legal entity, if the latter is the lender,
on the day of payment by the borrower of the sum of debt or its
appropriate part.
2. In the absence of a different agreement interest shall be paid
out every month up to the day of the return of the sum of the loan.
3. The loan agreement is supposed to be interest free, unless
otherwise stipulated expressly in cases where:
the agreement is concluded between individuals for the sum of money
that does not exceed the five-fold amount of the statutory minimum wage
or salary and is not connected with the business activity of at least of
one of the parties;
under the agreement other things, marked by generic features, and
not money are transferred to the borrower.
Article 810. The Borrower's Obligation to Return the Loan Agreement
1. The borrower shall be obliged to return to the lender the
received loan amount in the period and in the order, prescribed by the
loan agreement.
In cases where the term of the return of loan amount is not fixed by
or determined by the time of demand, the loan amount shall be returned by
the borrower during 30 days since the day of the making by the lender of
the claim, unless otherwise stipulated by the contract.
2. Unless otherwise stipulated by the loan agreement, the amount of
an interest-free loan may be returned by the borrower short of the term.
The loan amount given on interest may be returned short of the term
with the consent of the lender.
3. Unless otherwise stipulated by the loan agreement, the loan
amount shall be deemed to be returned at the time of its transfer to the
lender or of the charge of corresponding pecuniary means to his bank
account.
Article 811. The Consequences of Breaking the Loan Agreement by the
Borrower
1. Unless otherwise stipulated by the law or the loan agreement, in
cases where the borrower fails to return on time the loan amount,
interest on this sum of money shall be subject to payment in amount,
envisaged by Item 1 of Article 395 of this Code, from the day when it
should have been returned to the day of its return to the lender,
regardless of the payment of interest, specified by Item 1 of Article 809
of this Code.
2. If the loan agreement provides for the return of the loan in
parts (by instalment), then with the breach by the borrower of the
period, fixed for the return of the regular part of the loan, the lender
shall have the right to demand the anticipatory return of the entire
remaining sum of the loan together with interest due to him.
Article 812. The Contesting of a Loan Agreement
1. The borrower shall have the right to contest the loan agreement
due to the lack of money by proving that money or other things have not
been received by him in reality from the lender or received in lesser
quantity that it was stated in the agreement.
2. If a loan agreement is to be concluded in writing (Article 808),
it shall be impermissible to contest it due to the lack of money by means
of witness depositions, except in cases where the agreement was concluded
under the influence of fraud, violence, threat or the malicious agreement
of the borrower's representative with the lender or the concurrence of
hard circumstances.
3. If it is found during the process of contesting by the borrower
of the loan agreement due to the lack of money that money or other things
have not been received in reality from the lender, the loan agreement
shall be deemed to be non-concluded. When money or things have been in
fact received by the borrower from the lender in lesser quantity than it
is indicated in the agreement, the latter shall be deemed to be concluded
for this quantity of money or things.
Article 813. The Consequences of the Loss of the Security of the
Borrower's Obligations
In case of default by the borrower on the obligations, stipulated by
the loan agreement, to secure the return of the loan amount, and also in
case of the loss of the security or of the deterioration of its
conditions due to the circumstances for which the lender is not
answerable, the lender shall have the right to demand from the borrower
the anticipatory return of the loan amount and the payment of interest
due to him, unless otherwise stipulated by the agreement.
Article 814. Special-purpose Loan
1. If a loan agreement is concluded with the proviso of using by the
borrower the received pecuniary means for certain purposes
(special-purpose loan), the borrower shall be obliged to ensure the
possibility of exercising control by the lender over the special-purpose
use of the loan sum.
2. If the borrower fails to fulfil the clause of the loan agreement
on the special-purpose use of the loan, and also if he breaks the
obligations, provided for by Item 1 of this Article, the lender shall
have the right to demand from the borrower the anticipatory return of the
loan sum and the payment of interest due to him, unless otherwise
stipulated by the agreement.
Article 815. The Bill
In cases where in accordance with the agreement of the parties the
borrower has passed the bill certifying the obligation of the drawer of a
bill, not stipulated by anything (promissory note), or of any payer,
indicated in the bill (bill of exchange), to pay out the pecuniary sums
borrowed at maturity, specified by the bill, the relations of the parties
under the bill shall be regulated by the law on the promissory note and
the bill of exchange.
Since the time of the issue of a bill the rules of this paragraph
may be applied to these relations inasmuch as they do not contradict the
law on the bill of exchange or the promissory note.
Article 816. The Bond
In cases envisaged by the law or other legal acts the loan agreement
may be concluded by means of the issue and sale of bonds.
A bond shall be recognized the security that certifies the right of
its holder to receive the nominal value of the bond or any other property
equivalent from the person, who has issued the bond, in the period
specified by it. The bond shall also give to its holder the right to
receive the interest fixed in it of the nominal value of the obligation
or any other property rights.
The rules of this paragraph shall apply to the relations between the
person who has issued the bond and its holder inasmuch as unless
otherwise stipulated by the law or in the order established by it.
Article 817. The State Loan Agreement
1. Under the state loan agreement the role of the borrower shall be
played by the Russian Federation or its subject, while that of the lender
shall be played by an individual or a legal entity.
2. State loans shall be voluntary.
3. A state loan agreement shall be concluded through the acquisition
by the lender of the issued state bonds or other government securities
certifying the right of the lender to receive from the borrower the
pecuniary means lent to him or, depending on the loan terms, other
property, fixed interest or other property rights within the periods of
time, specified by the terms of the floated loan.
4. It shall be impermissible to change the terms of a floated loan.
5. The rules for the state loan agreement shall be applied
accordingly to the loans issued by a municipal body.
Article 818. Novation of a Debt by Its Acknowledgment
1. Under the agreement of the parties the debt which has arisen from
purchase and sale, the lease of property or on any other ground may be
replaced by the acknowledgment of the debt.
2. The novation of the debt by its acknowledgment shall be carried
out with the observance of the requirements for novation (Article 414)
and shall be done in the form, specified for the conclusion of a loan
agreement (Article 808).
§ 2. Credit
Article 819. The Credit Agreement
1. Under the credit agreement the bank or any other credit
organization (creditor) shall undertake to grant monetary means (credit)
to a borrower in the amount and on the terms, stipulated by the
agreement, while the borrower shall undertake to return the received sum
of money and pay interest on it.
2. The rules specified by the first paragraph of this Chapter shall
be applied to the relations covered by the credit agreement, unless
otherwise stipulated by the rules of paragraph one of the present Chapter
and unless the contrary follows from the substance of the credit
agreement.
Article 820. The Form of the Credit Agreement
A credit agreement shall be concluded in writing.
The non-observance of the written form shall invalidate the credit
agreement. Such agreement shall be deemed to be null and void.
Article 821. The Refusal to Grant or Receive Credit
1. The creditor shall have the right to refuse to grant to the
borrower a credit in full or in part, as envisaged by the credit
agreement in the presence of circumstances which expressly testify to the
fact that the sum of money given to the borrower will not be returned in
due time.
2. The borrower shall have the right to refuse to receive credit in
full or in part by notifying the creditor about this until the time fixed
by the agreement, unless otherwise stipulated by the law, other legal
acts or the credit agreement.
3. If the borrower contravenes the obligation of a special-purpose
use of credit (Article 814), provided for by the credit agreement, the
creditor shall also have the right waive the further crediting of the
borrower under the agreement.
§ 3. Credit Against Goods and Commercial Credit
Article 822. Credit Against Goods
The parties may conclude a contract providing for the obligation of
one party to give to the other party things defined by generic features
(the agreement on credit against goods). The rules of the second
paragraph of this Chapter shall be applicable to such agreement, unless
otherwise stipulated by such agreement and unless the contrary follows
from the substance of the obligation.
The conditions on the quantity, assortment, completeness, quality,
tare and/or packing of given things shall be implemented in accordance
with the rules governing the contract of sale (Articles 465-485), unless
otherwise stipulated by the agreement on credit against goods.
Article 823. Commercial Credit
1. Contracts whose execution is associated with the transfer to the
other party of sums of money or other things, defined by generic
features, may provide for the granting of credit, including that in the
form of advance, prepayment, deferment or instalment payment for goods,
works or services (commercial credit), unless otherwise stipulated by the
law.
2. The rules of this Chapter shall be applicable to commercial
credit, unless otherwise stipulated by the rules on the agreement which
has given rise to the appropriate obligation and unless this contradicts
the substance of such obligation.
Chapter 43. Financing Against the Assignment of a Monetary Claim
Article 824. The Contract of Financing Against the Assignment of a
Monetary Claim
1. Under the contract of financing against the assignment of a
monetary claim one part (financial agent) shall transfer or undertake to
transfer to the other party (client) pecuniary means on account of the
monetary claim of the client (creditor) to a third person (debtor) that
follows from the granting by the client of goods, the performance of
works or the rendering of services to the third person, while the client
shall assign or undertake to assign this monetary claim to the financial
agent.
A monetary claim to the debtor may be assigned by the client to the
financial agent also for the purpose of discharging the client's
obligation to the financial agent.
2. Under the contract of financing against the assignment of a
monetary claim the obligations of the financial agent may include the
keeping of accounting for the client, and also the provision of other
financial service to the client, associated with the monetary claims
which are the subject of the assignment.
Article 825. The Financial Agent
Contract of financing against the assignment of a monetary claim may
be concluded by banks and other credit organizations, and also by other
profit-making organizations which have a permit (license) for the conduct
of such activity.
Article 826. A Monetary Claim Assigned for Financing Purposes
1. Both the monetary claim, whose date of payment has already
ensured (existing claim) and the right to receive pecuniary means which
will arise in the future (future claim) may be a subject of assignment
for which financing is granted.
The monetary claim that is the subject of the assignment shall be
defined in the contract of the client with the financial agent in a way
that makes it possible to identify the existing claim at the time of
concluding the contract, while the future claim - not later than at the
time of its rise.
2. In case of assignment of a future monetary claim the latter shall
be deemed to be passed to the financial agent for the emergence of the
right to receive pecuniary means from the debtor, which are the subject
of the assignment of the claim, stipulated by the contract. If the
assignment of a monetary claim is conditioned by a definite occurrence,
it shall enter into force after the advent of this occurrence.
Additional formalization of the assignment of a monetary claim shall
not be required in these cases.
Article 827. The Client's Liability to the Financial Agent
1. Unless the contract of financing against the assignment of a
monetary claim provides otherwise, the client shall bear liability to the
financial agent for the reality of the monetary claim that is the subject
of the assignment.
2. The monetary claim which is the subject of assignment shall be
recognized as actual, if the client has the right to transfer the
monetary claim and if at the time of the assignment of this claim he is
not aware of the circumstances in consequence of which the debtor has the
right not to execute it.
3. A client shall not be answerable for the non-fulfilment or
improper fulfilment by the debtor of the claim which is the subject of
assignment in case the financial agent presents it for execution, unless
otherwise stipulated by the contract between the client and the financial
agent.
Article 828. Invalidity of the Ban on the Assignment of a Monetary
Claim
1. The assignment of a monetary claim to the financial agent shall
be actual, if even there is an agreement on its ban or restriction
between the client and his debtor.
2. The provision established by Item 1 of this Article shall not
release the client from obligations or liability to the debtor in
connection with the assignment of the claim in violation of the existing
agreement between them on its ban or restriction.
Article 829. The Subsequent Assignment of a Monetary Claim
The subsequent assignment of a monetary claim shall not be allowed
by the financial agent, unless the contract of financing against the
assignment of the monetary claim provides for otherwise.
In case where the contract allows for the subsequent assignment of a
monetary claim, the provisions of this Chapter shall be accordingly
applicable to it.
Article 830. The Execution of a Monetary Claim by the Debtor to the
Financial Agent
1. The debtor shall be obliged to make a payment to the financial
agent, provided that he has received from the client or the financial
agent a written notification about the assignment of a monetary claim to
this financial agent and that the notification defines the monetary claim
subject to execution, and also indicates the financial agent to whom
payment is to be made.
2. At debtor's request the financial agent shall be obliged to
submit to the debtor within a reasonable period of time evidence of the
fact that the assignment of the monetary claim has in fact taken place.
If the financial agent fails to execute this obligation, the debtor shall
have the right to make payment to the client in pursuance of his
obligation to the latter.
3. The execution of the monetary claim by the debtor to the
financial agent in keeping with the rules of this Article shall release
the debtor from the relevant obligation to the client.
Article 831. The Rights of the Financial Agent to the Amounts
Received from the Debtor
1. If under the contract of financing against the assignment of a
monetary claim the client shall be financed by means of buying from his
this claim by the financial agent, the latter shall acquire the right to
all the sums of money he will receive from the debtor in fulfilment of
the claim, while the client shall bear no liability to the financial
agent for the fact that the received sums of money have proved to be less
than the price for which the agent has bought the claim.
2. If a monetary claim has been assigned to the financial agent for
the purpose of providing the execution of the client's obligation for him
and unless the contract of financing against the assignment of the claim
stipulates otherwise, the financial agent shall be obliged to submit his
account to the client and transfer to him the sum of money exceeding the
sum of the debt of the client, secured by the assignment of the claim. If
the pecuniary means received by the financial agent from the debtor have
proved to be less than the amount of the debt of the client to the
financial agent, secured by the assignment of the claim, the client shall
remain liable to the financial agent for the remainder of the debt.
Article 832. Counter Claims of the Debtor
1. If the financial agent applies to the debtor with the claim for
payment, the debtor shall have the right, in keeping with Articles 410 -
412 of this Code, to present for the offset his monetary claims based on
the contract with the client, which the debtor had by the time when he
received the notice about the assignment of the claim to the financial
agent.
2. The claims which the debtor could present to the client in
connection with the breach by the latter of the agreement on the ban on
the restriction of the assignment of the claim shall be invalid in
respect of the financial agent.
Article 833. The Return to the Debtor of the Amounts Received by the
Financial Agent
1. In case where the client has breached his obligations under the
contract concluded with the debtor, the latter shall have no right to
demand from the financial agent the return of the sums of money paid to
him under the claim that has passed to the financial agent, if the debtor
has the right to receive such sums of money directly from the client.
2. The debtor, who has the right to receive directly from the client
the amounts paid to the financial agent as a result of the assignment of
the claim, shall have nevertheless the right to demand the return of
these sums of money by the financial agent, if it is proved that the
latter has failed to execute his obligation to effect for the client the
promised payment, associated with the assignment of the claim, or has
made such payment, knowing about the breach by the client of that
obligation to the debtor to which the payment, associated with the
assignment of the claim, refers.
Chapter 44. Bank Deposit
Article 834. The Bank Deposit Agreement
1. Under the bank deposit agreement one party (the bank), which has
received the monetary sum (deposit) from the other party (depositor) or
the receipts due to it (deposit), shall undertake to return the amount of
the deposit and pay interest on it on the terms and in the procedure
specified by the agreement.
2. The bank deposit agreement in which a private person is a
depositor shall be deemed to be a public agreement (Article 426).
3. The rules of the bank deposit agreement (Chapter 45) shall be
applicable to the relations between the bank and the depositor involved
in the account on which the deposit has been placed, unless otherwise
stipulated by the rules of this Chapter or unless the contrary follows
from the substance of the bank deposit agreement.
Legal entities shall have no right to transmit pecuniary means held
in deposits to other persons.
4. The rules of this Chapter relating to bank shall also be
applicable to other credit organizations which accept deposits from legal
entities in keeping with the law.
Article 835. The Right of Attraction of Monetary Means for Making
Deposits
1. The right to attract monetary means for making deposits shall
belong to the banks to which such right has been accorded in conformity
with the permit (license), issued in the statutory procedure.
2. If a deposit is accepted from an individual by the person who has
no right to do so or in contravention of the procedure, established by
the law or by the bank rules adopted in accordance with it, the depositor
may demand the immediate return of the amount of the deposit, and also
the payment of the relevant interest, stipulated by Article 395 of this
Code, and the reimbursement of all the losses caused to the investor over
and above the amount of interest.
If such person has accepted the pecuniary means of a legal entity on
the terms of the bank deposit agreement, such agreement shall be null and
void (Article 168).
3. Unless otherwise stipulated by the law, the consequences,
provided for by Item 2 of this Article, shall also be applicable in the
cases of:
the attraction of monetary resources of individuals and legal
entities by means of sale to them of shares and other securities whose
issue has been recognized as illegal;
the attraction of monetary resources of individuals for making
deposits against the bills or other securities which exclude the receipt
of their holders of their deposits as soon as demanded and the exercise
by the depositors of other rights, envisaged by the rules of this
Chapter.
Article 836. The Form of the Bank Deposit Agreement
1. A bank deposit agreement shall be concluded in writing.
The written form of a bank deposit agreement shall be deemed to be
observed, if the placement of a deposit is certified with a savings book,
a savings or deposit certificate, or with any other document issued by
the bank to the depositor which complies with the requirements,
stipulated by the law for such documents, introduced by the bank rules in
conformity with the law and applicable in banking practice by the customs
of business turnover.
2. Non-observance of the written form of the bank deposit agreement
shall invalidate this agreement. Such agreement shall be void.
Article 837. Types of Deposits
1. A bank deposit agreement shall be concluded on the terms of the
issue of a deposit as soon as demanded (deposit at short notice) or on
the terms of the return of a deposit upon the expiry of the period of
time specified by the agreement (time fixed deposit).
The agreement may provide for the placement of deposits on the
different terms of their return which are not inconsistent with the law.
2. Under the agreement of a bank deposit of any type the bank shall
be obliged to issue the sum of the deposit or part thereof as soon as
demanded by the depositor, except for the deposits placed by legal
entities on different terms of return, provided for by the agreement.
The agreement's proviso about the refusal by an individual to
receive his deposit as soon as he demanded shall be void.
3. In cases where a time deposit or any deposit other than a call
deposit shall be returned to its holder as soon as he demanded before the
expiry of the term or the onset of other circumstances, indicated in the
bank deposit agreement, interest on deposits shall be paid out in the
amount corresponding to the rate of interest paid out by the banks for
deposits at short notice, unless the agreement provides for a different
amount of interest.
4. In cases where the depositor does not demand the return of the
sum of his time fixed deposit upon the expiry of the term or the sum of
the deposit placed by him on the different conditions of return, upon the
onset of the circumstances, specified by the agreement, the agreement
shall be deemed to be prolonged on the terms of the call deposit, unless
otherwise stipulated by the agreement.
Article 838. Interest on Deposits
1. The bank shall pay out to a depositor interest on his deposit in
the amount defined by the bank deposit agreement.
In the absence in the agreement of a clause on the rate of interest
to be paid out the bank shall be obliged to pay out interest in the
amount, defined in accordance with Item 1 of Article 809 of this Code.
2. Unless otherwise stipulated by the bank deposit agreement, the
bank shall have the right to change the rate of interest paid out on the
call deposits.
If the bank increases the rate of interest, the new interest rate
shall be applied to the deposits made before the announcement on the
diminution of the interest rate to depositors, upon the expiry of the
month since the time of the relevant announcement, unless otherwise
stipulated by the contract.
3. The interest rate, defined by the bank deposit agreement on the
deposit made by a private person on the terms of its issue upon the
expiry of a definite time or upon the onset of the circumstances provided
for by the agreement, may not be decreased by the bank unilaterally,
unless otherwise stipulated by the law. Under such bank deposit
agreement, concluded by the bank with a legal entity, the interest rate
may not be changed unilaterally, unless otherwise stipulated by the law
or the agreement.
Article 839. Procedure for Adding Interest on Deposits and Its
Payment
1. Interest on the sum of a bank deposit shall be added from the day
that follows the day of its receipt by the bank to the day preceding its
return to the depositor or its writing off the depositor's account on
different grounds.
2. Unless otherwise stipulated by the bank deposit agreement,
interest on the sum of the bank deposit shall be paid out to the
depositor on his demand upon the expiry of each quarter separately from
the amount of the deposit, while the uncalled interest shall increase the
amount of the deposit on which interest is cast.
In case of the return of a deposit all the interest added by this
time shall be paid off.
Article 840. Security for the Return of a Deposit
1. The banks shall be obliged to secure the return of deposits of
private persons through obligatory insurance or by other methods in cases
specified by the law.
The return of deposits of private persons by the bank in whose
statutory capital over 50 per cent of shares or participating interest
belongs to the Russian Federation and/or the subjects of the Russian
Federation, and also to municipal bodies shall be, furthermore,
guaranteed by their subsidiary liability according to the demands of the
investor to the bank in the procedure, envisaged by Article 399 of this
Code.
2. Methods of the bank's security for the return of deposits of
legal entities shall be defined by the bank deposit agreement.
3. During the conclusion of a bank deposit agreement the bank shall
be obliged to provide the depositor with information about the secured
return of the deposit.
4. If the bank fails to discharge the obligation of securing the
return of a deposit, envisaged by the law or the bank deposit agreement,
and also in case of the loss of security or the deterioration of its
conditions the depositor shall have the right to demand that the bank
should immediately return the sum of the deposit, pay out interest in the
amount, defined in conformity with Item 1 of Article 809 of this Code and
indemnify the caused losses.
Article 841. The Placement of Monetary Means by Third Persons on the
Depositor's Account
Unless otherwise stipulated by the bank deposit agreement, the
account of the depositor shall receive the monetary means credited to the
bank's account by third persons with an indication of the essential data
on his deposit account. In this case it is supposed that the depositor
has expressed his consent with the receipt of monetary means from such
persons and furnished to them the essential data on the deposit account.
Article 842. Deposits in Favour of Third Persons
1. A deposit may be in the bank in favour of a definite third
person. Unless otherwise stipulated by the bank deposit agreement, such
person shall acquire the depositor's rights since the time of presenting
to the bank the first claim based on these rights or expressing his
intention of availing himself of such rights by any other method.
The indication of the name of an individual (Article 19) or the name
of a legal entity (Article 54) in whose favour a deposit is made is an
essential condition of the relevant bank deposit agreement.
The bank deposit agreement in favour of the individual who died at
the time of the conclusion of the agreement or at the time of the
non-existence of the legal entity shall be void.
2. Before the third person expresses his intention to avail himself
of the depositor's rights, the person who has concluded a bank deposit
agreement may avail himself of the depositor's rights in respect of
monetary means placed on the deposit account.
3. The rules for the agreement in favour of the third person
(Article 430) shall be applicable to the bank deposit agreement in favour
of the third person, unless this contradicts the rules of this Article
and the substance of the bank deposit.
Article 843. The Savings Book
1. Unless otherwise stipulated by the arrangement of the parties,
the conclusion of a bank deposit agreement with a private person and the
placement of monetary means on his deposit account shall be certified by
a savings book. The bank deposit agreement may provide for the issue of a
registered savings book or a savings book to bearer. The savings book to
bearer shall be a security.
The savings book shall indicate and certify by the bank its name and
place of location (Article 54), and if a deposit is made in its branch,
this book shall also indicate the name and place of its branch, the
deposit account number, and also all the sums of money charged to the
account, all the sums of money written off the account, and the remainder
of cash on the account at the time of presenting the savings book to the
bank.
Unless a different condition of the deposit is proved, the data on
the deposit contained in the savings book shall be aground for
settlements between the bank and the depositor.
2. The payment of a deposit and interest on it and the fulfilment of
the instructions of the depositor on the transfer of money from the
deposit account to other persons shall be effected by the bank upon the
production of the savings book.
If the registered savings book has been lost or brought into a
faulty state for presentation, the bank shall give to the depositor a new
savings book upon his application.
The rights under the lost savings book to bearer shall be restored
in the procedure, envisaged for securities to bearer (Article 148).
Article 844. The Savings (Deposit) Certificate
1. The savings (deposit) certificate shall be a security that
certified the sum of the deposit made in the bank and the rights of the
depositor (certificate holder) to the receipt of the amount of the
deposit upon the expiry of the fixed time and of the deposit upon the
expiry of the fixed time and of interest stipulated by the certificate in
the bank which has issued the certificate or in any branch of this bank.
2. Savings (deposit) certificates may be registered or to bearer.
3. In case of the anticipatory presentation of a savings (deposit)
certificate for payment the bank shall pay off the sum of the deposit and
interest on it, paid out in call deposits, unless the certificate
conditions provide for a different interest rate.
Chapter 45. Bank Account
Article 845. The Bank Account Agreement
1. Under the bank account agreement the bank shall undertake to
charge cash to the account opened for a client (account holder), to
implement the client's instructions on his transfer to, and the
withdrawal of, relevant sums of money from the account and on other
operations with the account.
2. The bank may use the monetary means placed on the account, while
guaranteeing the client's right to make use of these means.
3. The bank shall have no right to determine and control the trends
of using the client's monetary funds and introduce other restrictions on
his right to dispose of cash at his discretion which are not provided by
the law or the bank account agreement.
4. The rules of this Chapter relating to the banks shall also be
applicable to other credit organizations in case of the conclusion and
execution of the bank account agreement in conformity with the issued
permit (license).
Article 846. The Conclusion of a Bank Account Agreement
1. With the conclusion of a bank account agreement an account shall
be opened with a bank for the client or the person indicated by him on
the terms, agreed upon by the parties.
2. The bank shall be obliged to conclude a bank account agreement
with the client who has made his offer to open an account on the
conditions announced by the bank for the accounts of the given type,
which meet the requirements of the law and the bank rules, established in
conformity with it.
The bank shall have no right to refuse to open an account, the
corresponding operations with which are stipulated by the law, the
constituent instruments of the bank and the permit (license) issue to it,
except for the cases where such refusal has been caused by the bank's
lack of the possibility to accept the account for banking servicing or is
admitted by the law or other legal acts.
If the bank evades from the conclusion of a bank account agreement
on a groundless basis, the client shall have the right to present to it
his claims, provided for by Item 4 of Article 445 of this Code.
Article 847. The Certification of the Right to Dispose of Cash
Placed on the Account
1. The rights of the persons who implement the instructions of the
client on the transfer and payment of cash from the account shall be
certified by the client by means of presenting to the bank of statutory
documents in conformity with the bank rules established by the law and
the bank account agreement.
2. The client may give instructions to the bank on the write off of
cash from the account on the demand of third persons, including t
instructions connected with the performance by the client of his
obligations to these persons. The bank shall accept these instructions,
provided they indicate in writing the necessary data which make it
possible to identify the person who has the right to present the relevant
claim.
3. The agreement may provide for the certification of rights of
disposing of cash placed on the account by the electronic payment
facilities and by other documents with the use in them of the analogues
of the autograph (Item 2 of Article 160), codes, passwords and other
means confirming that instructions have been given by the person
authorized therefor.
Article 848. Bank Operations with Accounts
The bank shall be obliged to perform operations for the client,
which are provided for the accounts of the given types by the law, the
bank rules established by law and the customs of business turnover
applicable in banking practice, unless otherwise stipulated by the bank
account agreement.
Article 849. Time-limits for Operations with Accounts
The bank shall be obliged to charge cash placed on the client's
account within the day that follows the day of the receipt by the bank of
the relevant payment document, unless the bank account agreement provides
for a shorter period.
The bank shall be obliged to pay out cash or transfer it from the
depositor's account within the day that follows the day of the receipt by
the bank of the relevant payment document, unless the law, the bank rules
introduced in accordance with it or the bank account agreement provide
for different time-limits.
Article 850. Account Crediting
1. In cases where in conformity with the bank account agreement the
bank makes payments from the account despite the absence of monetary
means (account crediting), the bank shall be deemed to grant to a client
a credit in the appropriate amount since the day such payment was
effected.
2. The rights and obligations of the parties associated with account
crediting shall be determined by the rules for loans and credits (Chapter
42), unless the bank account agreement provides otherwise.
Article 851. The Payment of Banking Expenses on Operations with
Accounts
1. In cases specified by the bank account agreement the client shall
pay for the bank's services involved in the operations with cash placed
on the account.
2. A charge for the bank's services, provided for by Item 1 of this
Article, may be collected by the bank upon the expiry of each quarter
from the monetary means of the client placed on the account, unless
otherwise stipulated by the bank account agreement.
Article 852. Interest Paid by the Bank for the Use of Cash on
Accounts
1. Unless otherwise stipulated by the bank account agreement, the
bank shall pay interest, the amount of which is charged to the client's
account, for the use of cash placed on this account.
The amount of interest shall be placed on the account within the
periods of time, provided for by the agreement, and upon the expiry of
each quarter in case where such time-limits are not envisaged by the
agreement.
2. Interest, referred to in Item 1 of this Article, shall be paid by
the bank in the amount to be defined by the bank account agreement, while
in the absence of a relevant clause in the agreement interest shall be
paid in the amount, usually paid by the bank for call accounts (Article
838).
Article 853. The Offsetting of the Counter Claims of the Bank and
the Client
The bank's monetary claims to the client, associated with account
crediting (Article 850) and the payment for the bank's services (Article
851), and also the client's claims to the bank on the payment of interest
for the use of cash (Article 852) shall be terminated by offsetting
(Article 410), unless otherwise stipulated by the bank account agreement.
Said claims shall be offset by the bank. The bank shall be obliged
to inform the client about the offset in the procedure and in the period
of time envisaged by the agreement, but if the appropriate conditions are
not agreed upon by the parties, the bank shall be obliged to inform the
client about the offset in the procedure and in the periods of time which
are common for the banking practice of providing clients with information
about the state of cash in the relevant account.
Article 854. The Grounds for Writing off Cash from the Account
1. The bank shall write off cash from the client's account on the
basis of his instructions.
2. Without the client's instructions cash kept on his account may be
written off by a court decision, and also in cases, established by the
law or envisaged by the agreement between the bank and the client.
Article 855. The Sequence of Writing off Cash from the Account
1. In the presence in the account of cash whose amount is sufficient
to meet all the claims to the account, this cash shall be written off
from the account in the procedure of the receipt of the client's
instructions and other documents for writing off (calendar sequence),
unless otherwise stipulated by the law.
2. If cash is insufficient in the account to meet all the claims
made to it, this cash shall be written off in the following sequence:
in the first place cash is written off according to the executive
documents which provide for the transfer or issue of cash from the
account to meet claims for the reparation of harm inflicted on human life
and health, and also claims for the recovery of alimony;
in the second place, cash is written off according to the executive
documents which provide for the transfer or issue of cash for settlements
in the payment of dismissal benefits and labour remuneration with the
persons working under a labour contract and in the payment of fees under
the author's contract;
in the third place there shall be carried out the write-off on the
payment documents stipulating the transfer or issuance of monetary funds
for the settlements in the remuneration of labour with the persons
working under a labour agreement (contact), and also on the allocations
to the Pension Funds of the Russian Federation, the Social Insurance Fund
of the Russian Federation and the funds of the obligatory medical
insurance;
in the fourth place there shall be carried out the write-off on the
payment documents stipulating the payments to the budget and the
non-budgetary funds the allocations to which are not stipulated in the
third place;
in the fifth place, cash is written off according to the executive
documents providing for the satisfaction of other monetary claims;
in the sixth place, cash is written off according to the payment
documents in the order of calendar sequence.
Cash shall be written off from the account according to the claims
of one turn in the order of the calendar priority of the receipt of
documents.
Article 856. The Bank's Liability for Improper Performance of
Operations with the Account
In cases where cash is charged to the client's account untimely or
where the bank has written it off from the account groundlessly, and also
of the non-fulfilment of the client's instructions on the transfer of
cash from the account or on the withdrawal of cash from the account, the
bank shall be obliged to pay interest on this sum in the order and in the
amount, prescribed by Article 395 of his Code.
Article 857. The Bank Secrecy
1. The bank shall guarantee the secrecy of a bank account and a bank
deposit, operations with the account and information about clients.
2. Information constituting a bank secrecy may be presented to the
clients alone or to their representatives. Such information may be given
to state bodies and their officials exclusively in cases and in the
procedure, prescribed by the law.
3. In case the bank divulges information constituting the bank's
secrecy, the client whose rights have been infringed shall have the right
to demand compensation for the losses caused.
Article 858. Restriction on the Disposal of Accounts
No restriction shall be allowed on the client's rights of disposing
of cash on his account, exception being made for the attachment on cash
kept in the account or for the suspension of account operations in cases,
stipulated by the Law.
Article 859. The Dissolution of a Bank Account Agreement
1. A bank account agreement shall be dissolved by the client's
application at any time.
2. On the bank's demand the bank account agreement may be cancelled
by the court in the following cases:
where the sum of money placed on the client's account proves to be
below the minimum amount, envisaged by the bank rules or the agreement,
unless such sum is restored during one month since the day of the bank's
warning about this;
in the absence of operations with the account during one year,
unless otherwise stipulated by the agreement.
3. The remainder of cash on the account shall be given to the client
or transferred to another account by his instructions within seven days
after the receipt of the client's relevant written application.
4. The dissolution of bank account agreement shall be a ground for
the closing of the client's account.
Article 860. Bank Accounts
The rules of this Chapter shall extend to correspondent accounts,
correspondent subaccounts, other bank accounts, unless otherwise
stipulated by the law, other legal acts or the bank rules, introduced in
accordance with them.
Chapter 46. Payments
§ 1. General Provisions on Payments
Article 861. Cash and Cashless Payments
1. Payments with the participation of private persons, not connected
with their business, may be effected in cash (Article 140) without the
limitation of the sum of money or non-cash.
2. Settlements between legal entities, and also payments with the
participation of individuals, associated with their business, shall be
effected in non-cash. Settlements between these legal entities may be
effected in cash, unless otherwise stipulated by the law.
3. Clearing settlements shall be made through banks and other credit
organizations (hereinafter referred to as the banks) which have opened
relevant accounts, unless the contrary follows from the law and is
conditioned by the usable form of payments.
Article 862. The Forms of Cashless Payments
1. Cashless payments may assume the following forms: payments by
written order, by letters of credit, by cheques, for collection, and also
payments in other forms prescribed by the law, the bank rules established
in conformity with it and by the business turnover customs, used in
banking practice.
2. The parties to the contract shall have the right to choose and
fix in this contract any form of payments, referred to in Item 1 of this
Article.
§ 2. Payments by Written Order
Article 863. General Provisions on Payments by Written Order
1. In case of payments by written order the bank shall undertake to
transfer a definite sum of money on the order of the payer from the
monetary means kept in his account to the account of the person indicated
by the payer in this or that bank within the period of time, prescribed
by the law or fixed in accordance with it, unless the bank account
agreement provides for a shorter period or the business turnover customs
used in banking practice define it.
2. The rules of this paragraph shall be applied to the relations,
connected with the transfer of cash via the bank by the person who has
not his account in this bank, unless otherwise stipulated by the law and
the bank rules introduced in conformity with it or unless the contrary
follows from the substance of these relations.
3. The procedure for making payments by written order shall be
regulated by the law, and also by the bank rules introduced in conformity
with it and the business turnover customs used in banking practice.
Article 864. The Conditions for the Execution of Payment Order by
the Bank
1. The content of the payment order and the settlement documents
submitted together with it and their form shall comply with the
requirements of the law and the bank rules, established in keeping with
it.
2. If a payment order fails to comply with the requirements of Item
1 of this Article, the bank may clarify the content of he order. Such
inquiry shall me bade to the payer without delay, upon the receipt of the
order. If no answer has been received within the period, prescribed by
the law or the bank rules introduced in keeping with it, and in their
absence - within the reasonable period the bank may leave the order
without execution and return it to the payer, unless otherwise stipulated
by the law, the bank rules introduced in accordance with it or by the
agreement between the bank and the payer.
3. The payer's order shall be executed by the bank in the presence
of cash in the payer's account, unless otherwise stipulated by the
agreement between payer and the bank. Orders shall be executed by the
bank with the observance of sequence of writing off cash from the account
(Article 855).
Article 865. The Execution of the Payer's Order
1. The bank which has accepted the payer's payment order shall be
obliged to transfer the relevant sum of money to the bank of the
recipient of money for its charge to the account of the person, indicated
in the order, within the time, fixed by Item 1 of Article 863 of this
Code.
2. The bank shall have the right to draw other banks in the
operations of transmitting cash to the account indicated by the client's
order.
3. The bank shall be obliged to immediately inform the payer at his
request about the execution of the order. Procedure for drawing up a
notification about the execution of the order and requirements for its
content shall be envisaged by the law, the bank rules introduced in
accordance with it or by the agreement of the parties.
Article 866. Liability for Non-fulfilment or Improper Fulfilment of
the Client's Order
1. In case of non-fulfilment or improper fulfilment of the client's
order the bank shall bear liability on the grounds and in the amounts,
prescribed by Chapter 25 of this Code.
2. In cases of non-fulfilment or improper fulfilment of the client's
order in connection with the breach of the rules for settlement
operations by the bank which has been drawn in the execution of the
payer's order, the liability, envisaged by Item 1 of this Article, may be
vested by a court of law on this bank.
3. If the breach of the rules for settlement operations by the bank
has involved the unlawful withholding of cash, the bank shall be obliged
to pay interest in the procedure and in the amount, prescribed by Article
395 of this Code.
§ 3. Payments by Letters of Credit
Article 867. General Provisions on Payments by a Letter of Credit
1. In payments by a letter of credit the bank acting on behalf of
the payer in the opening of the letter of credit and in accordance with
his instruction (the bank of circulation) shall undertake to make
payments to the recipient of cash to retire, accept or discount a bill of
exchange, or to instruct another bank (executing bank) to effect payments
to the recipient of cash or to retire, accept or discount a bill of
exchange.
The rules for the executing bank shall be applicable to the bank of
circulation that makes payments to the recipient of cash or retires,
accepts or discounts the bill of exchange.
2. At the time of opening a covered (deposited) letter of credit the
bank of circulation shall be obliged to transfer the amount of the letter
of credit (payment) at the expense of the payer or to place the credit
given to him at the disposal of the executing bank for the entire period
of validity of the obligation of the bank of circulation.
In case of opening an uncovered (guaranteed) letter of credit the
executing bank shall be given the right to charge off the entire sum of
the letter of credit from the account kept by the bank of circulation.
3. Procedure for making payments by a letter of credit shall be
regulated by the law, and also by the bank rules introduced in accordance
with it, and by the business turnover customs applicable in banking
practice.
Article 868. The Revocable Letter of Credit
1. A letter of credit which can be changed or cancelled by the bank
of circulation without a preliminary notification of the recipient of
cash shall be recognized as revocable. The revocation of a letter of
credit shall not create any obligations for the bank of circulation to
the recipient of cash.
2. The executing bank shall be obliged to make payments or carry on
other operations with the revocable letter of credit, if by the time of
their conduct it had not received a notice about the change of the terms
of the letter of credit of its cancellation.
3. A letter of credit shall be revocable, unless otherwise
stipulated expressly in its text.
Article 869. The Irrevocable Letter of Credit
1. A letter of credit which cannot be cancelled without the consent
of the recipient of cash shall be recognized as irrevocable.
2. At the request of the bank of circulation the executing bank that
takes part in the operation with a letter may confirm an irrevocable
letter of credit (confirmed letter of credit). Such confirmation shall
An irrevocable letter of credit confirmed by the executing bank may
not be changed or cancelled without the consent of this bank.
Article 870. The Execution of the Letter of Credit
1. In order to execute a letter of credit, the recipient of cash
shall submit to the executing bank documents confirming the fulfilment of
all the terms of the letter of credit. If one of these terms is
contravened, the letter of credit shall not be executed.
2. If the executing bank has made a payment or carried out a
different transaction in keeping with the terms of the letter of credit,
the bank of circulation shall be obliged to compensate for the expenses
incurred. Said expenses, and also all other expenses of the bank of
circulation, incurred in the execution of the letter of credit, shall be
recompensed by the payer.
Article 871. The Refusal to Accept Documents
1. If the executing bank refuses to accept documents which do not
comply with the terms of the letter of credit according to external
signs, it shall be obliged to inform forthwith the recipient of cash and
the bank of circulation with an indication of the reasons for the
refusal.
2. If the bank of circulation, which has received the documents
accepted by the executing bank, holds that they do not correspond to the
terms of the letter of credit according to the external signs, it shall
have the right to refuse to accept them and demand from the executing
bank the sum of money paid to the recipient of cash with the
contravention of the terms of the letter of credit and to refuse to
recompense the paid sums of money under the uncovered letter of credit.
Article 872. The Bank's Liability for Breaking the Terms of a
Letter of Credit
1. Liability for breaking the terms of a letter of credit to the
payer shall be borne by the bank of circulation, while such liability to
the bank of circulation shall be borne by the executing bank, except for
the cases, provided for by this Article.
2. In the event of a groundless refusal by the executing bank to pay
out cash under the covered or confirmed letter of credit, the liability
to the recipient of cash may be entrusted to the executing bank.
3. In case of a wrong payment of cash by the executing bank under
the covered or confirmed letter of credit in consequence of breaking its
terms, the liability to the payer may be entrusted with the executing
bank.
Article 873. The Closing of the Letter of Credit
1. The executing bank shall close letters of credit in the cases of:
the expiry of the validity term of a letter of credit;
the application by the recipient of cash on the refusal to make use
of a letter of credit before the expiry of its validity term, if the
letter of credit provides for the possibility of such refusal;
the demand of the payer for a full or partial revocation of a letter
of credit, if such revocation is possible under the terms of the letter
of credit.
The executing bank shall be obliged to inform the bank of
circulation about the closing of the letter of credit.
2. The non-used amount of the covered letter of credit shall be
subject to return to the bank of circulation without delay simultaneously
with the closing of the letter of credit. The bank of circulation shall
be obliged to charge the returned sums of money to the payer's account
from which cash has been deposited.
§ 4. Payments for Collection
Article 874. General Provisions on Payments for Collection
1. In payment for collection the bank (bank of circulation) shall
undertake to carry out actions involved in the receipt of payment and/or
acceptance of payment on the order of the client and at his expense.
2. The bank of circulation which has received the client's order
shall have the right to draw another bank (executing bank) for its
implementation.
Procedure for making payment for collection shall be regulated by
the law, the bank rules introduced in keeping with it and by the business
turnover customs applicable in banking practice.
3. In case of default on the client's order or improper execution
the bank of circulation shall bear liability to it on the grounds and in
the amount, prescribed by Chapter 25 of this Code.
If the client's order has not been executed or executed improperly
due to the infringement of the rules for payment operations by the
executing bank, the liability to the client may be placed on this bank.
Article 875. The Execution of a Collection Order
1. In the absence of any document or in case of the non-conformity
of documents with the collection order by their external signs the
executing bank shall be obliged forthwith to inform about this the person
from whom it has received the collection order. In the event of
non-removal of said drawbacks the bank shall have the right to return the
documents without execution.
2. Documents shall be submitted to the payer in the form in which
they have been received with the exception of bank notes and endorsements
needed for the formalization of a collection transaction.
3. If documents are subject to payment at sign, the executing bank
shall present them for payment immediately upon the receipt of a
collection order.
If documents are subject to payment at other time, the executing
bank shall present documents for acceptance for the receipt of the
payer's acceptance immediately upon the receipt of the collection order,
while the claim for payment shall be made not later than the day of the
onset of the payment date, indicated in the document.
4. Partial payments may be accepted in cases where this is provided
for by the bank rules or in the presence of a special permit in the
collection order.
5. The received (collected) amounts shall be immediately placed by
the executing bank at the disposal of the bank of circulation, which is
duty-bound to charge these amounts to the client's account. The executing
bank shall have the right to withhold from the collected amounts the fees
due to it and the compensation for expenses.
Article 876. Notice of Transactions Made
1. If payment and/or acceptance have not been received, the
executing bank shall be obliged to inform at once the bank of circulation
about the reasons for non-payment or for the refusal from acceptance.
The bank of circulation shall be obliged to inform the client about
this immediately and inquire about its directions on further actions.
2. In the event it has failed to receive directions about further
actions within the time-limit fixed by the bank rules or within a
reasonable period in the absence of this time-limit the executing bank
shall have the right to return the documents to the bank of circulation.
§ 5. Payments by Cheques
Article 877. General Provisions on Payments by Cheques
1. A cheque shall be recognized to be the security containing the
non-stipulated cheque drawer's order to the respective bank to effect the
payment of the amount of money, indicated in it to the cheque holder.
2. Only the bank where the cheque drawer has money to be disposed of
by drawing cheques may be indicated as a payer by cheque.
3. A cheque may not be withdrawn before the expiry of the time for
its presentation.
4. The drawing of a cheque shall not cancel the obligation in the
fulfilment of which it has been written.
5. Procedure and conditions for the use of cheques in payment
transactions shall be regulated by this Code and in the part which is not
regulated by it they shall be regulated by other laws and the bank rules
established in accordance with them.
Article 878. The Essential Elements of the Cheque
1. The cheque shall contain:
1) the name "cheque", included in the text of the document;
2) the order to the payer to pay out a certain sum of money;
3) the name of the payer and reference to the account from which
payment is to be made;
4) reference to the currency of the payment;
5) reference to the date and place of writing the cheque;
6) the signature of the person who has drawn the cheque (cheque
drawer).
The absence of any of said essential elements in the document shall
invalidate the cheque.
A cheque that does not contain the place of its writing shall be
regarded as that signed at the place of the location of the cheque
drawer.
Reference to interest shall be deemed to be unwritten.
2. The form of cheques and procedure for its filling in shall be
determined by the law and the bank rules introduced in keeping with it.
Article 879. Cheque Payment
1. A cheque shall be paid at the expense of the cheque drawer's
resources.
If cash is deposited, procedure and conditions for depositing cash
to cover cheques shall be established by the bank rules.
2. A cheque shall be liable to payment by the payer, provided that
is presented for payment within the time-limit fixed by the law.
3. The payer by cheque shall be obliged to assure himself of the
authenticity of the cheque with all means at his disposal, and also of
the fact that the cheque bearer is a person authorized therefor.
During the payment of the endorsed cheque the payer shall be obliged
to verify whether endorsements are correct but shall not check the
signatures of endorsers.
4. The losses incurred due to the payment by the payer for a forged,
pilfered or lost cheque shall be covered by the payer or the cheque
drawer depending through whose fault they have been caused.
5. A person who has paid the cheque shall have the right to demand
it with the receipt for the sum of money.
Article 880. The Assignment of Rights by a Cheque
1. The rights by a cheque shall be assigned in the order, prescribed
by Article 146 of this Code with the observance of the rules, provided
for by this Article.
2. A cheque to bearer shall not be subject to transfer.
3. In an assigned cheque the endorsement in full shall have the
force of receipt for the sum of money.
The endorsement made by the payer shall be null and void.
A person who possesses the assigned cheque, received under the
endorsement, shall be deemed to be its legitimate holder, if he bases his
right on the continuous numbers of endorsements.
Article 881. Guarantee of Payment
1. Payment of a cheque may be guaranteed in full or in part by means
of its surety.
The guarantee of payment of a cheque (surety) may be given by any
person, except for the payer.
2. The guarantee shall be put down on the face side of a cheque or
on the additional sheet by means of endorsement ("regard as guarantee")
and the indication of who and for whom it has been given. Unless there is
no such indication, the guarantee shall be deemed to be given in place of
the cheque drawer.
The guarantee shall be signed by the guarantor with an indication of
the place of his residence and the date of making an endorsement, and if
the guarantor is represented by a legal entity, the guarantee shall
signed with an indication of its place of location and the date of making
an endorsement.
3. The guarantee shall be liable just as the person in place of whom
he has given the guarantee.
His obligation shall be valid even in the event if the obligation
guarantee by him proves to be void on any ground other than the
non-observance of the form.
4. The guarantor who has paid the cheque shall acquire the rights
that follow from the cheque against the person in place of whom he has
given the guarantee and against those persons who are obligated to the
latter.
Article 882. Collection of a Cheque
1. The submission of a cheque to the bank which serves the cheque
holder for collection in order to get payment shall be deemed to be the
presentation for payment.
Cheque payment shall be made in the order, prescribed by Article 875
of this Code.
2. Cash shall be entered to the cheque holder's account under the
collected cheque after the receipt of payment from the payer, unless
otherwise stipulated by the agreement between the cheque holder and the
bank.
Article 883. Certification of the Refusal to Pay a Cheque
1. A refusal to pay a cheque shall be certified by one of the
following methods:
1) by making a protest by the notary or by drawing up an equivalent
report in the statutory manner;
2) by putting down a note by the payer on the cheque to the effect
that her refuses to pay it with an indication of the date for presenting
the cheque for payment;
3) by putting down a note by the collecting bank with an indication
of the date to the effect that the cheque has been drawn in due time and
dishonored.
2. A protest or an equivalent report shall be made before the expiry
of the time for presenting the cheque.
If the cheque was presented on the last day of the time-limit, a
protest or an equivalent report may be made on the next working day.
Article 884. Notification About the Non-payment of a Cheque
The cheque holder shall be obliged to inform his endorser and cheque
drawer about non-payment during two working days that follow the day of
making the protest or the equivalent report.
During two working days that follows the day of the receipt of the
notification by it every endorser shall be obliged to bring to the notice
of his endorser the received notification. During the same period of time
the notification shall be sent to the one who has given the guarantee for
this person.
The person who has not sent a notification within the said period
shall not lose his rights. He shall indemnify for the losses that can be
caused by the non-notification about cheque non-payment. The amount of
the indemnified losses may not exceed the cheque amount.
Article 885. The Consequences of Cheque Non-Payment
1. If the payer refuses to pay a cheque, the cheque holder shall
have the right to bring an action to one, several or all the persons
bound by the cheque (cheque drawer, guarantors and endorsers), who bear
joint and several liability to him.
2. The cheque drawer shall have the right to demand from said
persons the payment of the cheque amount, his costs involved in the
cashing of the cheque, and also interest in keeping with Item 1 of
Article 395 of this Code.
The same right shall belong to the person bound by the cheque after
it has paid the cheque.
3. The cheque holder's claim against the persons, referred to in
Item 1 of this Article, may be brought during six months since the day of
the expiry of the period of presenting the cheque for payment. Claim
resources of bound persons to each other shall be cancelled upon the
expiry of six months since the day when the relevant bound person has
satisfied the claim or since the day of bringing the action against him.
Chapter 47. Storage
§ 1. General Provisions on Storage
Article 886. The Storage Agreement
1. Under the storage agreement one party (depository) shall
undertake to keep the thing given to it by the other party (depositor)
and to return this thing perfectly safe.
2. The storage agreement in which the depository is represented by a
profit-making or an non-profit organization, which ensures storage as one
of the goals of its professional activity (professional depository), may
provide for the depository's obligation of accepting a thing for storage
from the depositor within the period fixed by the agreement.
Article 887. The Form of the Storage Agreement
1. A storage agreement shall be concluded in writing in cases,
indicated in Article 161 of this Code. For the storage agreement
concluded between individuals (Subitem 2 of Item 1 of Article 161) the
written form shall be observed, if the value of the thing put in storage
exceeds the minimum amount of the wage or salary by at least ten months.
The storage agreement, which provides for the depository's
obligation of accepting a thing for storage, shall be concluded in
writing, regardless of the number of the parties to this agreement and
the value of the thing put in storage.
The delivery of a thing for storage under extraordinary
circumstances (a fire, natural disaster, sudden illness, threat of
assault, etc.) may be proved by the witness's testimony.
2. The single written form of the storage agreement shall be deemed
to be observed, if the acceptance of a thing for storage is certified by
the issue of the following documents by the depository to the depositor:
the trust receipt, storage receipt, certificate or other document
signed by the depository;
the numbered counter (check) and other sign that certifies the
acceptance of things for storage, if such form of acknowledgment of the
acceptance of things for storage is provided for by the law or any other
legal act, or is common for this type of storage.
3. Non-observance of the simple written form of the storage
agreement shall not deprive the parties of the right to refer to
testimonies by witnesses in case of a dispute over the identify of the
thing accepted for storage and the thing returned by the depositor.
Article 888. The Execution of the Obligation to Accept a Thing for
Storage
1. The depository who has undertaken under the storage agreement the
obligation of accepting a thing for storage (Item 2 of Article 886) shall
have no right to demand the transfer of this thing for storage.
However, the depositor who has failed to transfer a thing for
storage within the period fixed by the agreement shall bear liability to
the depository for the losses caused in connection with coming off
storage, unless otherwise stipulated by the law or the storage agreement.
The depositor shall be released from this liability, if he states to the
depository that he refuses to accept his services within a reasonable
period of time.
2. Unless otherwise stipulated by the storage agreement, the
depository shall be released from the obligation of accepting a thing for
storage in case when the thing will not be given to him in the period of
time specified by the agreement.
Article 889. The Period of Storage
1. The depository shall be obliged to keep a thing during the
time-limit specified by the agreement.
2. Unless the period of storage is provided for by the agreement and
if it cannot be defined by proceeding from its terms and conditions, the
depository shall be obliged to keep the thing until it is claimed by its
depositor.
3. If the period of storage is determined by the time of claiming a
thing by the depositor, the depository shall have the right to demand
that the depositor should take back the thing upon the expiry of the
period of storage which is usual under given circumstances and to provide
to him a reasonable period of time for this. The non-execution by the
depositor of this obligation shall involve the consequences, envisaged by
Article 899 of this Code.
Article 890. The Storage of Things with Deprivation of Individuality
In cases, expressly provided for by the storage agreement, the
things of one depositor accepted for storage may be mixed with the things
of the same kind and quality belonging to other depositors (storage with
deprivation of individuality). The quantity of things of the same kind
and quality shall be returned to the depositor in equal amounts as
specified by the parties.
Article 891. The Depository's Obligation to Ensure the Safety of a
Thing
1. The depository shall be obliged to take all the measures
envisaged by the storage agreement in order to ensure the safety of the
thing put in storage.
In the absence in the agreement of the conditions for such measures
or in case of incompleteness of these conditions the depository shall
also be obliged to take for the preservation of the thing measures
corresponding to the business turnover usages and the substance of the
obligation, including the properties of the thing put in storage, unless
the necessity for taking these measures is excluded by the agreement.
2. The depository shall take measures in any case for the
preservation of the thing given to him, if they are provided for by the
law, other legal acts or in the manner stipulated by them (fire
prevention, sanitary, protective and other measures).
3. If storage is carried out gratuitously, the depository shall be
obliged to take care of the thing accepted for storage to no less extent
than of his own things.
Article 892. Use of the Thing Put in Storage
The depository shall have no right to make use of the thing put in
storage without the consent of the depositor and likewise to give the
opportunity for its use by third persons with the exception of the case
when the use of the kept thing is necessary for its preservation and does
not contradict the storage agreement.
Article 893. Changes in the Conditions of Storage
1. If it is necessary to change the conditions of the storage of a
thing, envisaged by the storage agreement, the depository shall be
obliged to notify the depositor about this without delay and to wait for
his answer.
If changes in the conditions of storage are essential for the
removal of the danger of the loss, shortage of, or damage to, a thing,
the depository shall have the right to change the method, place and other
conditions of storage without waiting for the depositor's answer.
2. If during storage there is a real threat of damage to a thing or
the thing has already been damaged, or there are circumstances that do
not make it possible to preserve it and if the depositor is unable to
take measures in due time, the depository shall have the right to sell
the thing on its own or its part thereof at the price that have formed in
the place of storage. If said circumstances have arisen for the reasons
for which the depository is not answerable, he shall have the right to
recompense his costs of the sale at the expense of the purchase price.
Article 894. The Storage of Things with Hazardous Properties
1. Highly inflammable, explosion risky or generally dangerous things
may be at any time rendered harmless or destroyed by the depository
without compensation of the depositor's losses, unless the depositor
failed to warn the depository about these properties when he put them in
storage. The depositor shall be liable for the losses caused to the
depository and third persons in connection with the storage of these
things.
When things with dangerous properties are transferred for storage to
the professional depository, the rules envisaged by the first paragraph
of this point shall be applied in case when such things were put in
storage under the wrong name and the depository could not make sure of
their dangerous properties by means of an external inspection.
In the event of remunerated storage in cases, provided for by this
Item, the paid remuneration for the storage of things shall not be
returned, and if it has not been paid, the depository may recover it in
full.
2. If things accepted for storage with the knowledge and consent of
the depository and indicated in the first paragraph of Item 1 of this
Article, have become dangerous for people around or for the depositor's
property or that of third persons, despite the observance of the
conditions of their storage, and if circumstances make it possible for
the depository to demand that the depositor should take them, at once or
if he does not meet this demand, these things may be rendered harmless or
destroyed by the depository without compensation of the depositor's
losses. In such case the depositor shall bear no liability to the
depository and third persons for the losses caused in view of the storage
of these things.
Article 895. The Transfer of a Thing to a Third Person
Unless the storage agreement stipulates otherwise, the depository
shall have no right to transfer a thing for storage to a third person
without the consent of the depositor with the exception of cases where he
is compelled to do so by force of circumstances in the interest of the
depositor and is deprived of the possibility to get his consent.
The depository shall be obliged to inform the depositor at once
about the transfer of a thing for storage to a third person.
In case of the transfer of a thing for storage to a third person the
terms and conditions of the agreement between the depositor and the
original depository shall retain their force and the latter shall be
answerable for the actions of the third person to whom he has given the
thing as for his own actions.
Article 896. Remuneration for Storage
1. Remuneration for storage shall be paid to the depository as soon
as storage is over, and if payment for storage is envisaged by persons of
time, it shall be paid out in appropriate portions upon the expiry of
each period.
2. In case of delay in the payment of remuneration for storage for
over than half of the period, for which it should be paid, the depository
shall have the right to refuse the execute the agreement and demand that
the depositor should immediately take the thing put in storage.
3. If storage is terminated before the expiry of the stipulated
period of time due to the circumstances for which the depository is not
answerable, he shall have the right to a proportionate part of
remuneration and in case, specified by Item 1 of Article 894 of this
Code, to the entire sum of this remuneration.
If storage is terminated short of the term due to the circumstances
for which the depository is answerable, he shall not have the right to
demand remuneration for storage and shall be obliged to return the sum of
money received on account of this remuneration to the depositor.
4. If the thing held in custody has not been taken back by the
depositor upon the expiry of the period of storage, he shall be obliged
to pay to the depository adequate remuneration for the further storage of
the thing. This rule shall also be applied in case where the depositor is
obliged to take the thing before the expiry of the period of storage.
5. The rules of this Article shall be applied, unless the storage
agreement provides for otherwise.
Article 897. The Reimbursement of Storage Expenses
1. Unless otherwise stipulated by the storage agreement, the
depository's expenses on the storage of a thing shall be included in
remuneration for storage.
2. In case of unremunerated storage the depositor shall be obliged
to compensate for the depository's necessary expenses on the storage of
the thing, unless the law or the storage agreement provides otherwise.
Article 898. Extraordinary Storage Expenses
1. Expenses on the storage of things which exceed the usual expenses
of this kind and which could not be foreseen by the parties during the
conclusion of a storage agreement (extraordinary expenses) shall be
reimbursed to the depository, if the depositor has given his consent to
these expenses or has approved them afterwards, and also in other cases
stipulated by the law, other legal acts or the storage agreement.
2. If there is a need for making extraordinary expenses, the
depository shall be obliged to inquire about the depositor's consent to
these expenses. If the depositor fails to state his disagreement within
the period of time, indicated by the depository or during the normally
essential time for reply, it shall be held that he agrees with the
extraordinary expenses.
When the depository made extraordinary storage expenses without the
preliminary consent of the depositor, although this was possible thanks
to the circumstances of the case and the depositor failed to approve them
afterwards, the depository may demand the compensation for the
extraordinary expenses only within the limits of the damage which could
be caused to the thing, had not these expenses been made.
3. Unless otherwise stipulated by the storage agreement,
extraordinary expenses shall be reimbursed over and above remuneration
for storage.
Article 899. The Depositor's Obligation to Take a Thing Back
1. Upon the expiry of the stipulated period of storage or the period
granted by the depository for the receipt of a thing back on the strength
of Item 3 of Article 889 of this Code, the depositor shall be obliged to
take the thing put in storage without delay.
2. In case of default on his obligation by the depositor to take
back the thing transferred for storage, including in case of his evasion
from obtaining the thing, the depository shall have the right, unless
otherwise stipulated by the storage agreement, after the written warning
of the depositor to sell the thing on his own at the price formed in the
place of storage, and if the cost of the thing exceeds 100 statutory
minimum amounts of wages or salaries, to sell the thing at an auction in
the order, prescribed by Articles 447-449 of this Code.
The sum of money received from the sale of the thing shall be
transferred to the depositor minus the amount due to the depository,
including his expenses on the sale of the thing.
Article 900. The Depository's Obligation to Return a Thing
1. The depository shall be obliged to return to the depositor or the
person, indicated by him as a recipient, the very thing which was put in
storage, unless the agreement provides for storage with deprivation of
individuality (Article 890).
2. The thing shall be returned by the depository in the condition in
which it was accepted for storage with due account of its natural
deterioration, natural properties.
3. The depository shall be obliged, simultaneously with the return
of a thing, to transfer the fruits and incomes obtained during its
storage, unless otherwise stipulated by the storage agreement.
Article 901. Grounds for the Depository's Liability
1. The depository shall be liable for the loss and shortage of, or
damage to, things accepted for storage on the grounds, provided for by
Article 401 of this Code.
A professional depository shall be liable for the loss and shortage
of, or damage to, things, unless he proves that the loss, shortage or
damage have taken place due to force majeure or to the properties of the
thing about which the depository did not know and should nor know when he
accepted it for storage or as a result of malice or gross negligence on
the part of the depositor.
2. The depository shall be liable for the loss and shortage of,
damage to, the things accepted for storage only in the presence of the
depositor's malice or gross negligence after the onset of the latter's
obligation to take these things back (Item 1 of Article 899).
Article 902. The Extent of the Depository's Liability
1. Losses caused to the depositor by the loss and shortage of, or
damage to, things shall be reimbursed by the depository in keeping with
Article 393 of this Code, unless otherwise stipulated by the law or the
storage agreement.
2. In case of remunerated storage the losses caused to the depositor
by the loss and shortage of, or damage to, things shall be reimbursed as
follows:
1) for the loss and shortage of things - in the amount of the value
of the lost or missing things;
2) for the damage to things - in the amount of the sum of money by
which their value has been reduced.
3. In case where as a result of damage, for which the depository is
liable, the quality of the thing has changed so much that it cannot be
used according to the original designation, the depositor shall have the
right to waive it and demand that the depository should replace the value
of this thing, and also should reimburse other losses, unless otherwise
stipulated by the law or the storage agreement.
Article 903. The Reparation of Losses Caused to the Depository
The depositor shall be obliged to compensate for the depository's
losses caused by the properties of the thing put in storage, if the
depository did not know or should not know about these properties when he
accepted the thing for storage.
Article 904. The Termination of Storage on the Depositor's Demand
The depository shall be obliged to return the thing accepted for
storage on the depositor's demand, although the period of storage fixed
by the agreement is not over as yet.
Article 905. The Application of the General Provisions on Storage to
Some of Its Kinds
The general provisions on storage (Articles 886-904) shall be
applicable to some of its kinds, unless otherwise stipulated by the
rules for particular kinds of storage, contained in Articles 907-926 of
this Code and in other laws.
Article 906. Storage in Virtue of Law
The rules of this Chapter shall be applicable to the obligations of
storage that arise by dint of law, unless the law establishes different
rules.
§ 2. Warehousing
Article 907. Warehouse Storage Agreement
1. Under the warehouse storage agreement the commodity warehouse
(depository) shall undertake to keep in store for remuneration goods
given to it by the commodity owner (depositor) and to return these goods
perfectly safe.
A commodity warehouse shall be deemed to be the organization which
keeps goods in store as business and which renders services relating to
storage.
2. The written form of the warehouse storage agreement shall be
deemed to be observed, if its conclusion and acceptance of goods for
warehouse have been certified by the warehouse document (Article 912).
Article 908. Storage of Goods at the Public Warehouse
1. A commodity warehouse shall be recognized as a public warehouse,
if it follows from the law, other legal acts that is a duty-bound to
accept goods for storage from any commodity owner.
2. A warehouse storage agreement, concluded by the public warehouse
shall be recognized as a public agreement (Article 426).
Article 909. Inspection of Goods When the Commodity Warehouse
Accepts Them and During Their Storage
1. Unless otherwise stipulated by the warehouse storage agreement,
the commodity warehouse shall be obliged, when it accepts goods for
storage, to inspect them as its own expense and to estimate their
quantity (number of units or places of storage, or measure: weight or
volume) and their external appearance.
2. The commodity warehouse shall be obliged to enable the commodity
owner to inspect goods or heir sapless during storage, if storage is
carried our with deprivation of individuality, to take on trial and adopt
measures necessary for the safety of goods.
Article 910. Changes in the Conditions of Storage and the State of
Goods
1. In case where it is necessary to change the conditions of storage
of goods in order to keep them safe, the commodity warehouse shall have
the right to take the required measures on its own. However, it shall be
obliged to notify the commodity owner about the adopted measures, if it
was necessary to make essential changes in the conditions of storage of
goods, envisaged by the warehouse storage agreement.
2. Upon the discovery, during storage, of damage inflicted on goods
and transcending the usual norms of natural spoiling or such norms agreed
upon in the warehouse storage agreement, the commodity warehouse shall be
obliged to draw up a report about this without delay and on the same day
inform the commodity owner about this.
Article 911. The Checking of the Quantity and the State of Goods
When They Are Returned to the Commodity Owner
1. The commodity owner and the commodity warehouse shall each have
the right to demand that they should be inspected and their quantity
checked during their return. Expenses incurred by this shall be borne by
the person who demanded the inspection of goods and their quantity check.
2. If during the return of goods to the commodity owner by the
warehouse goods have not been inspected and checked by them jointly, a
written application on the shortage of, or damage to, goods owning to
their improper storage shall be failed with the warehouse upon the
receipt of goods. As for shortage of goods or damage to them, which could
not be detected with the usual method of accepting goods an application
shall be failed during three days after their acceptance.
In the absence of the application, referred to in the first
paragraph of this Item, it shall be held, unless the contrary is proved,
that goods have been returned by the warehouse in keeping with the terms
and conditions of the warehouse storage agreement.
Article 912. Warehouse Documents
1. The commodity warehouse shall issue one of the following
warehouse documents in the acknowledgement of accepting goods for
storage:
the twofold warehouse certificate;
the single warehouse certificate;
the warehouse receipt.
2. The twofold warehouse certificate consists of two parts - the
warehouse certificate and the mortgage certificate (warrant), which can
be separated from each other.
3. The twofold warehouse certificate, each of its two parts and the
single warehouse certificate shall be securities.
4. Goods accepted for storage under the twofold or single warehouse
certificate may be a subject of mortgage during their storage by means
of pledge of the corresponding certificate.
Article 913. The Twofold Warehouse Certificate
1. Each part of the twofold warehouse certificate shall equally
indicate:
1) the name and place of location of the commodity warehouse that
has accepted goods for storage;
2) the current number of the warehouse certificate in the
warehouse's register;
3) the name of the legal entity or the name of the individual from
whom goods have been accepted for storage, and also the place of location
(place of residence) of the commodity owner;
4) the name and quantity of goods accepted for storage - the number
of units and/or commodity places and/or the measure of goods (weight or
volume);
5) the period of time for which goods have been accepted for
storage, if such period is fixed, or the reference to the effect that
goods have been accepted for storage until to be called for;
6) the amount of remuneration for storage or the rates on the basis
of which it is reckoned and the procedure for payment for storage;
7) the date of the issue of the warehouse certificate.
Both parts of the twofold warehouse certificate shall have the
individual signatures of the authorized representative and the warehouse
seal.
2. The document which does not comply with the requirements of this
Article shall not be a twofold warehouse certificate.
Article 914. The Rights of the Holders of the Warehouse and Mortgage
Certificates
1. The holder of the warehouse and mortgage certificates shall have
the right to dispose of goods kept in a warehouse in full measure.
2. The holder of the warehouse certificate separated from the
mortgage certificate shall have the right to dispose of goods, but may
not take them from the warehouse until he repays the credit granted under
the mortgage certificate.
3. The holder of the mortgage certificate who differs from the
holder of the warehouse certificate shall have the right to pledge to
goods in the amount of the credit given under the mortgage certificate
and interest on it. When goods are put in pledge, a note on this shall be
made in the warehouse certificate.
Article 915. The Transfer of Warehouse and Mortgage Certificates
A warehouse certificate and a mortgage certificate may be
transferred together or separately according to endorsements.
Article 916. The Issue of Goods under the Two-fold Warehouse
Certificate
1. The commodity warehouse shall issue goods to the holder of the
warehouse and mortgage certificates (twofold warehouse certificate)
precisely in exchange for both these certificates together.
2. The holder of a warehouse certificate who does not possess a
mortgage certificate, but has contributed the entire sum of debt under it
shall receive goods from the warehouse precisely in exchange for the
warehouse certificate and provided that he has submitted together with it
the receipt of the payment of the entire sum of debt under the mortgage
certificate.
3. The commodity warehouse, which has issued goods to the holder of
a warehouse certificate who does not possess a mortgage certificate and
has failed to bring in the amount of debt under it contrary to the
requirements of this Article, shall bear liability to the holder of the
mortgage certificate for payment of the entire sum of money secured by
it.
4. The holder of the warehouse and mortgage certificates shall have
the right to demand the issue of goods in parts. In exchange for the
original certificates he shall be given new certificates for goods that
remained in the warehouse.
Article 917. The Simple Warehouse Certificate
1. A simple warehouse certificate shall be issued to the bearer.
2. The simple warehouse certificate shall contain information,
specified by Subitems 1, 2, 4-7 of Item 1 and the last paragraph of
Article 913 of this Code, and also reference to the fact that it has been
issued to the bearer.
3. The document which does not comply with the requirements of this
Article shall not be a simple warehouse certificate.
Article 918. The Storage of Things with the Right to Dispose of Them
If it follows from the law, other legal acts or the agreement that
the commodity warehouse can dispose of goods put in storage, the
relations between the parties shall be governed by the rules of Chapter
42 of this Code on Loans, but the time and place of the return of goods
shall be determined by the rules of this Chapter.
§ 3. Special Kinds of Storage
Article 919. Storage in a Pawnshop
1. The agreement of pawnshop storage of things belonging to an
individual shall be a public agreement (Article 426).
2. The conclusion of a pawnshop storage agreement shall be certified
by the issue by the pawnshop to the depositor of a registered deposit
receipt.
3. A thing to be put in storage in a pawnshop shall be subject to
valuation under the agreement of the parties in accordance with prices
for things of this kind and quality, usually adopted in trade at the time
and place of their acceptance for storage.
4. The pawnshop shall be obliged to insure the things accepted for
storage in favour of the depositor at its expense in the full amount of
the valuation made in keeping with Item 3 of this Article.
Article 920. Things Not Reclaimed from the Pawnshop
1. If a thing out in storage in a pawnshop has not been reclaimed by
the depositor within the time specified by the agreement, the pawnshop
shall be obliged to keep it during two months and to charge payment,
provided for by the storage agreement. Upon the expiry of this time the
non-reclaimed thing may be sold by the pawnshop in the procedure,
established by Item 5 of Article 358 of this Code.
2. Payment for the storage of the non-reclaimed thing and other
payments due to the pawnshop shall be repayed from the sum of money,
received from the sale of this thing. The remainder of the sum shall be
returned by the pawnshop to the depositor in question.
Article 921. The Custody of Valuables in a Bank
1. The bank may receive securities, precious metals and stones,
other valuables and values, including documents, into its custody.
2. The conclusion of an agreement on the custody of valuables in a
bank shall be certified by the issue by it to the depositor of a
registered protection document whose presentation is a ground for the
issue of kept valuables to the depositor.
Article 922. The Custody of Valuables in the Individual Bank
Safe-deposit Box
1. The valuables bank custody agreement may provide for their
custody with the use of an individual bank safe-deposit box (safe cell or
isolated bank premise) by the depositor (client) or with the provision of
such safe-deposit box protected by the bank.
Under the valuables bank custody agreement the client shall be
provided with the right to put valuables in an individual bank
safe-deposit box and withdraw them from it. For this purpose he shall be
given a key to the safe and the card that makes it possible to identify
the client or any other sign or document certifying the client's right to
have access to the safe and its contents.
The agreement terms may provide for the client's right to work in
the bank with valuables kept in the individual safe.
2. Under the valuables bank custody agreement with the use by the
client of an individual date-deposit box the bank shall accept from the
client the valuables which should be kept in the safe and exercise
control over their placement by the client in the safe-deposit box, over
their withdrawal from the safe and return them to the client after the
withdrawal.
3. Under the valuables bank custody agreement with the provision of
the client with an individual safe-deposit box the bank shall enable the
client to place valuables in the safe and to withdraw them from the safe
outside anybody's control, including bank control.
The bank shall be obliged to exercise control over the access to the
premise where the safe-deposit box given to the client is situated.
Unless the valuables bank custody agreement with the provision of
the client with an individual safe-deposit box provides for otherwise,
the bank shall be released from the liability for the non-safety of the
safe's contents, if it proves that access by anybody to the safe was
impossible under the custody terms without the knowledge of the client or
was possible due to force majeure.
4. The rules of this Code on the lease agreement shall be applicable
to the agreement on the provision of another person with a bank
safe-deposit box for his use without the bank's liability for the safe's
contents.
Article 923. Storage in Cloak-Rooms of Transport Organizations
1. The cloak-rooms under the authority of transport organizations of
public use shall be obliged to accept for storage the things of
passengers and other private persons, regardless of the possession of
travel documents. The agreement on the storage of things in the
cloak-rooms of transport organizations shall be recognized as a public
agreement (Article 426).
2. A receipt or numbered counter shall be issued to the depositor in
acknowledgement of the acceptance of a thing for storage in a cloak-room
(except for automated cloak-rooms). In case of the loss of a receipt or
counter, the thing left in the cloak-room shall be issued to the
depositor upon the submission of evidence that this thing belongs to him.
3. The period of time during which the cloak-room is obliged to keep
things in store shall be determined by the rules, introduced in keeping
with the second paragraph of Item 2 of Article 784 of this Code, unless
the agreement between the parties stipulates a longer period. Things
which have not been reclaimed in said period of time shall be kept by the
cloak-room for 30 days more. With the expiry of this period non-reclaimed
things may be sold in the procedure, envisaged by Item 2 of Article 899
of this Code.
4. The losses of the depositor owing to the loss and shortage of, or
damage to, the things deposited in a cloak-room shall be reimbursed by
the custodian during 24 hours since the time of presenting a claim for
these things within the sum of their appraisal by the depositor at the
time of depositing.
Article 924. Storage in the Wardrobes of Organizations
1. The storage of things in the wardrobes of organizations shall be
gratuitous, unless money reward is specified or stipulated in any other
way when things were put in storage.
The custodian of the thing left in a wardrobe shall be obliged to
take all the measures, provided for by Items 1 and 2 of Article 891 of
this Code, in order to preserve the thing, regardless of the fact whether
its storage was gratuitous or remunerated.
2. The rules of this Article shall also be applied to the custody of
outwear, head gear and other similar things left without putting them in
storage by private persons in places used for these purposes in transport
organizations and facilities.
Article 925. The Custody of Things in Hotels
1. The hotel shall also be liable as a custodian without the
conclusion of a relevant agreement with its guest residing in it for the
loss and shortage of, or damage to, his things brought into the hotel
with the except of money, other currency values, securities and other
valuables.
The thing entrusted to hotel attendants or the thing deposited in a
hotel room or in any other specially assigned place shall be regarded as
the one brought into the hotel.
2. The hotel shall be liable for the loss of money, other currency
values, securities and other valuables of a guest, provided they have
been accepted by the hotel safe, regardless of the fact whether this safe
is to be found in his room or in another hotel premise. The hotel shall
be released from liability for the non-safety of the safe's contents, if
it proves that under the storage terms the access of any body to the safe
was impossible without the guest's knowledge or became possible owing to
force majeure.
3. The guest who has discovered that his things were lost or damaged
shall be obliged to state about this to the hotel management without
delay. Otherwise the hotel shall be released from its liability for the
non-safety of things.
4. The hotel's notice to the effect that it does not assume the
responsibility for the non-safety of things belonging to guests shall not
absolve it from liability.
5. The rules of this Article shall be applied accordingly to the
custody of things belonging to private persons in motels, holiday homes,
holiday hotels, sanatoria, public baths and other similar organizations.
Article 926. The Custody of Things Which Are the Subject of Disputes
(Sequestration)
1. Under the agreement on sequestration two or several persons who
have started an argument over the right to a thing shall pass this thing
to the third person who assumes the obligation of returning, upon the
settlement of the dispute, of the thing to that person to whom it will be
adjudged or given under the agreement of all the persons in dispute
(contractual sequestration).
2. A thing that is the subject of argument between two or several
persons may be put in storage by way of sequestration by a court
decision (judicial sequestration).
Both the person appointed by a court of law and the person, chosen
by the mutual agreement of the persons in dispute, may act as a custodian
under the judicial sequestration. The custodian's consent shall be
required in both cases, unless the law establishes otherwise.
3. Both movable and immovable things may be put in storage by way of
sequestration.
4. The custodian who keeps a thing in store by way of sequestration
shall have the right to receive remuneration at the expense of the
persons in dispute, unless the agreement or the court decision
responsible for sequestration provides for otherwise.
Chapter 48. Insurance
Article 927. Voluntary and Obligatory Insurance
1. Insurance shall be effected on the basis of contracts of property
or personal insurance, concluded by the individual or legal entity
(insurant) with the insurance company (insurer).
The contract of personal insurance is a public agreement (Article
426).
2. In cases where the law entrusts the obligation of insurance cover
to the persons referred to in it of the lives, health or property of
other persons or of their civil liability to other persons at their
expense or at the expense of interested persons (obligatory insurance),
insurance shall be effected by concluding contracts in keeping with the
rules of this Chapter. For the insurers the conclusion of contracts of
insurance shall not be obligatory on the terms offered by the insurant.
3. The law may provide for cases of obligatory insurance of the
lives, health and property of individuals at the expense of the resources
allocated from the appropriate budget (obligatory state insurance).
Article 928. Interests Whose Insurance Is Not Allowed
1. No insurance of interests contrary to law shall be allowed.
2. No insurance of losses from the participation in games, lotteries
and bets shall be allowed.
3. No insurance of expenditure to which a person can be compelled
for the purpose of setting hostages free shall be allowed.
4. The terms and conditions of the contracts of insurance which
contradict Items 1-3 of this Article shall be null and void.
Article 929. The Contract of Property Insurance
1. Under the contract of property insurance one part (insurer) shall
undertake, for the charge stipulated by the contract (insurance premium)
and upon the onset of an event (insured accident), stipulated by the
contract, to reimburse to the other party (insurant) or another person in
favour of whom the contract has been concluded (beneficiary) the losses
inflicted in consequence of this event in the insured property or the
losses sustained in connection with other property interests of the
insurant (to pay insurance compensation) within the amount specified by
the contract (insured sum).
2. The following property interests may be insured in particular
under the contract of property insurance:
1) the risk of loss (destruction), shortage of, or damage to,
property (Article 930);
2) the liability risk under the obligations arising due to the
infliction of harm on the lives, health or property of other persons, and
also the civil liability risk (Articles 931 and 932), or liability under
contracts in cases, provided for by the law;
3) the risk of losses from business activity because of the
violation of their obligations by the contracting parties of the
businessman or the change in the conditions of this activity due to the
circumstances beyond the businessman's control, including the risk of
non-receipt of expected incomes - the entrepreneur's risk (Article 933).
Article 930. Insurance of Property
1. Property may be insured under the contract of insurance in favour
of the person (insurant or beneficiary) who has the interest in the
preservation of the property, based on the law, other legal act or the
contract.
2. The contract of insurance of property, concluded in the absence
of the insurant's or the beneficiary's interest in the preservation of
insured property, shall be void.
3. A contract of insurance of property in favour of a beneficiary
may be concluded without reference to the name of the beneficiary
(insurance at the expense of the one who pays).
Upon the conclusion of such contract the insurant shall be given an
insurance policy to bearer. When the insurant or the beneficiary
exercises the rights under such contract this policy shall be given to
the insurer.
Article 931. Insurance of Liability for the Infliction of Harm
1. Under the contract of insurance of liability risk under the
obligations following in consequence of the infliction of harm on the
lives, health or property of other persons, the liability risk of the
insurant himself or any other person who bears such liability may be
insured.
2. A person whose risk of liability for the infliction of harm has
been insured shall be named in the insurance contract. If this person is
not named in the contract, the liability risk of the insurant himself
shall be deemed to be insured.
3. A contract of insurance of the risk of liability for the
infliction of harm shall be deemed to be concluded, even of the contract
has been concluded in favour of the insurant or any other person liable
for the infliction of harm or the contract fails to state in whose favour
it has been concluded.
4. In case where the liability for the infliction of harm is insured
because its insurance is compulsory, and also in other cases, stipulated
by the law or the contract of insurance of such liability, the person in
favour of whom the insurance contract is deemed to be concluded shall
have the right to present directly to the insurer his claim on the
reparation of harm within the insured amount.
Article 932. Insurance of Liability under the Contract
1. Insurance of the risk of liability for the contravention of the
contract shall be allowed in cases, provided for by the law.
2. Under the contract of insurance of the risk of liability for the
contravention of the contract only the liability risk of the insurant
himself may be insured. The insurance contract that does not comply with
such requirements shall be void.
3. This risk of liability for the violation of the contract shall be
deemed to be insured in favour of the party to whom the insurant should
bear liability under the terms and conditions of this contract, that is
the beneficiary, even if the insurance contract has been concluded in
favour of another person or if the contract does not say in whose favour
it is concluded.
Article 933. Insurance of Entrepreneurial Risk
Under the contract of insurance of entrepreneurial risk only the
entrepreneurial risk of th insurant himself may be insured and only in
his favour.
The contract of insurance of the entrepreneurial risk of the person
who is not an insurant shall be void.
The contract of insurance of entrepreneurial risk is favour of the
person who is not an insurant shall be concluded in favour of the
insurant.
Article 934. The Contract of Personal Insurance
1. Under the contract of personal insurance one party (insurer)
shall undertake to pay for the charge, stipulated by the contract
(insurance premium) and paid by the other party (insurant), in the lump
or periodically the sum of money, specified by the contract (insured
amount) in case of the infliction of harm on the life or health of the
insurant himself or any other individual named in the contract (insured
person), of the attainment of a certain age or the onset of another
event, provided for by the contract (insured accident).
The right to receive the insured amount shall belong to the person
in favour of whom the contract has been concluded.
2. A contract of personal insurance shall be deemed to be concluded
in favour of the insured person, if the contract fails to name another
person as a beneficiary. In the event of death of the person insured
under the contract, in which a different beneficiary is not named, the
heirs of the insured person shall be recognized as beneficiaries.
A contract of personal insurance in favour of the person who is not
insured, including in favour of the insurant who is not an insured
person, may be concluded only with the written consent of the insured
person. In the absence of such consent a contract may be recognized as
invalid upon the lawsuit of the insured person and in the event of death
of this person - upon the lawsuit brought by his heirs.
Article 935. Obligatory Insurance
1. The law may entrust the obligation of insurance to the persons
referred to in it:
the lives, health and property of other persons, defined in the law,
in case of the infliction of harm to their lives, health and property;
the risk of their civil liability which can competence in
consequence of the infliction of harm on the lives, health or property of
other persons or the contravention of contracts concluded with other
persons.
2. The obligation of insuring his life and health may not be
entrusted to the individual under the law.
3. In cases stipulated by the law or established in the statutory
procedure the legal entities, which possess state or municipal property
in their economic or operative management, may be entrusted with the
obligation of insuring this property.
4. In case where the obligation of insurance does not follow from
the law is based on the contract, including the obligation of insuring
property, on the contract with the owner of property or on the
constituent documents of the legal entity which owns property, such
insurance shall not be obligatory in the meaning of this Article and
shall not entail the consequences, provided for by Article 937 of this
Code.
Article 936. The Conduct of Obligatory Insurance
1. Obligatory insurance shall be effected by means of concluding an
insurance contract with the person charged with the obligation of such
insurance (the insurant) and the insurer.
2. Obligatory insurance shall be effected at the expense of the
insurant with the exception of obligatory insurance of passengers, which
in statutory cases may be effected at their expense.
3. Facilities subject to obligatory insurance, the risks against
which they should be insured and the minimum amounts of insured sums
shall be determined by the law and in the case, specified by Item 3 of
Article 935 of this Code, by the law or in the statutory procedure.
Article 937. The Consequences of the Violation of the Rules for
Obligatory Insurance
1. The person in favour of whom obligatory insurance should be
effected shall have the right, if he knows that insurance is not
effected, to demand in due course of law its implementation by the person
charged with the obligation of insurance.
2. If the person who is entrusted with the obligation of insurance
has not effected it or has concluded an insurance contract on the terms
deteriorating the position of the beneficiary as compared with the terms
defined by the law, he shall bear liability to the beneficiary with the
onset of an insured accident on the same terms on which the insured
compensation should have been paid in case of proper insurance.
3. The sums of money saved groundlessly by the person charged with
the obligation of insurance due to the fact that he has not fulfilled
this obligation or has fulfilled it improperly, shall be recovered on the
claim lodged by bodies of state insurance supervision for the benefit of
the Russian Federation with the addition of interest to these sums of
money in keeping with Article 395 of this Code.
Article 938. The Insurer
Legal entities with a permit (license) appropriate insurance may
conclude insurance contracts as insurers.
The requirements made to insurance companies and the procedure for
licensing their activity and exercising state supervision over this
activity shall be determined by the laws on insurance.
Article 939. The Performance of he Obligations under the Insurance
Contract by the Insurant and the Beneficiary
1. The conclusion of an insurance contract in favour of the
beneficiary, especially at a time when the insured person is the
beneficiary shall not absolve the insurant from the obligations under
this contract, unless the latter provides for otherwise or if the
insurant's obligations have been fulfilled by the person, in favour of
whom the contract was concluded.
2. The insurer shall have the right to demand from the beneficiary,
especially at a time when the beneficiary is represented by the insured
person, that the latter should perform the obligations under the
insurance contract, including the obligations entrusted to the insurant
but not fulfilled by him, upon the presentation by the beneficiary of the
claim for the payment of insurance compensation under the contract of
property insurance or of the insured amount under the contract of
personal insurance. The risk of the consequences of non-fulfilment or
untimely fulfilment of the obligations, which should have been fulfilled
earlier, shall be borne by the beneficiary.
Article 940. The Form of the Insurance Contract
1. An insurance contract may be concluded in writing. Non-observance
of the written form shall invalidate an insurance contract, exception
being made for the contract of obligatory state insurance (Article 969).
2. An insurance contract may be concluded by means of drawing up one
document (Item 2 of Article 434) or handing over by the insurer to the
insurant on the basis of his written or oral statement an customer policy
(certificate or receipt) signed by the insurer.
In the latter case the insurant's consent to conclude a contract on
the terms proposed by the insurer shall be confirmed by the acceptance
from the insurer of the documents, referred to in the first paragraph of
this Item.
3. At the time of concluding an insurance contract the insurer shall
have the right to apply the standard forms of the contract (insurance
policy), elaborated by him or the association of insurers for particular
types of insurance.
Article 941. Insurance Under the General Policy
1. Systematic insurance of different lots of similar property
(goods, cargoes, etc.) on acceptable terms during a definite period of
time may be effected by agreement between the insurant and the insurer on
the basis of one insurance contract, that is, general policy.
2. The insurant shall be obliged to provide the insurer with
information specified by such policy in respect of each lot of property
subject to the operation of the general policy within the period of time,
envisaged by it, and if this period is not provided for by it, at once
upon their receipt. The insurant shall not be released from this duty,
even if by the time of the receipt of such information, the possibility
of losses liable to compensation by the insurer has already passed.
3. On the demand of the insurant the insurer shall be obliged to
issue insurance policies for particular lots of property liable to the
operation of the general policy.
In the event of inconsistency of the insurance policy with the
general policy in terms of content, preference shall be given to
insurance policy.
Article 942. The Essential Terms and Conditions of the Insurance
Contract
1. During the conclusion of a contract of property insurance the
insurant and the insurer shall reach agreement on:
1) definite property or any other property interest as the object of
insurance;
2) the character of the event that entails insurance (insured
accident);
3) the amount of the insurance sum;
4) the validity terms of the contract.
2. During the conclusion of a contract of personal insurance the
insurant and the insurer shall reach understanding on:
1) the insured person;
2) the character of the event (insured accident) that entails
insurance in the life of the insured person;
3) the amount of the insurance sum;
4) the validity term of the contract.
Article 943. The Definition of the Terms and Conditions of the
Insurance Contract in the Insurance Rules
1. The terms and conditions on which an insurance contract is
concluded may be defined in the standard insurance rules, adopted,
approved or endorsed by the insurer or by the association of insurers
(insurance rules).
2. The conditions contained in the insurance rules and not included
in the text of the insurance contract (insurance policy) shall be
compulsory for the insurant (beneficiary), if the contract (insurance
policy) expressly indicated the application of such rules and the rules
are set forth in one document with the contract (insurance policy) or on
its reverse side or are appended to it. In the latter case the delivery
of the insurance rules to the insurant during the conclusion of a
contract shall be certified with an entry in the contract.
3. During the conclusion of an insurance contract the insurant and
the insurer may come to terms on the modification or exclusion of some
provisions in the insurance rules and on the supplementing of the rules.
4. The insurant (beneficial) shall have the right to refer in
defence of its interests to the insurance rules to which there is a
reference in the insurance contract (insurance policy), even if there
rules are not compulsory for it by virtue of this Article.
Article 944. Information Given by the Insurant During the Conclusion
of an Insurance Contract
1. During the conclusion of an insurance contract the insurant shall
be obliged to communicate to the insurant the circumstances known to him
and of relevance for the definition of the possible onset of an insured
accident and the extent of possible losses from its commencement
(insurance risk), if these circumstances are not known and should not be
known to the insurer.
The circumstances definitely specified by the insurer in the
standard form of the insurance contract (insurance policy) or in its
written inquiry shall be recognized as essential in any case.
2. If an insurance contract has been concluded in the absence of the
insurant's replies to any questions put by the insurer, the latter may
not demand afterwards the dissolution of the contract or its recognition
as invalid on the ground that relevant circumstances have not been
communicated by the insurant.
3. If it is ascertained after the conclusion of an insurance
contract that the insurant has given to the insurer information known to
be false about the circumstances, referred to in Item 1 of this Article,
the insurer has the right to demand that the contract should be
recognized as invalid and that the consequences, stipulated by Item 2 of
Article 179 of this Code should be applied.
The insurer may not demand the recognition of the insurance contract
as invalid, if the circumstances about which the insurant has concealed
have already disappeared.
Article 945. The Insurer's Right to the Appraisal of Insurance Risk
1. During the conclusion of a property insurance contract the
insurer shall have the right to inspect the insurable property and in
case of need to schedule an expert examination in order to estimate its
actual value.
2. During the conclusion of a personal insurance contract the
insurer shall have the right to examine the insurable person for the
appraisal of the actual state of his health.
3. The appraisal of insurance risk by the insurer shall not be
compulsory on the strength of this Article for the insurant, who has the
right to prove something different.
Article 946. Secrecy of Insurance
The insurer shall have no right to disclose information about the
insurant, the insured person and the beneficiary, the state of their
health and about their property status, which he obtained as a result of
his professional activity. For the divulgence of secrecy of insurance the
insurer shall bear liability depending on the kind of the infringed
rights and the nature of divulgence in accordance with the rules,
envisaged by Article 139 or Article 150 of this Code.
Article 947. The Insurance Sum
1. The sum of money, within the limits of which the insurer
undertakes to pay out insurance compensation under the property insurance
contract or which he undertakes to pay out under the personal insurance
contract (insurance sum) shall be determined by the agreement between the
insurant and the insurer in keeping with the rules, provided for by this
Article.
2. In case of insurance of property or entrepreneurial risk, unless
the insurance contract stipulates otherwise, the insurance sum shall not
exceed their actual value (insurance sum). It shall be held as such
value:
for property its actual value in the place of its location on the
day of concluding an insurance contract;
for entrepreneurial risk the losses from business activity, which
the insurant, as is to be expected, would sustain with the onset of an
insured accident.
3. In contracts of personal insurance and contracts of civil
liability insurance the insurance sum shall be determined by the parties
at their discretion.
Article 948. The Contestation of the Insured Value of Assets
The insured value of assets, referred to in the insurance contract,
may not be contested afterwards, except for the case when the insurer,
who before the conclusion of the contract has not availed himself of his
right to the appraisal of insurance risk (Item 1 of Article 945) was
deliberately misled with regard to this value.
Article 949. Incomplete Property Insurance
If the contract of property insurance or entrepreneurial risk has
fixed the insurance sum below the insured value, the insurer shall be
obliged on the onset of an insured accident to compensate for the part of
the losses sustained by the insurant (beneficiary) in proportion to the
ratio between the insurance sum and the insured value.
The contract may provide for a higher amount of insurance
compensation but not higher than the insured value.
Article 950. Additional Property Insurance
1. In case where property or entrepreneurial risk is insured only in
terms of the part of insured value, the insurant (beneficiary) shall have
the right to effect additional insurance, including with another insurer,
with the proviso that total insurance sum should not exceed the insured
value in all insurance contracts.
2. The non-observance of the provisions of Item 1 of this Article
shall entail the consequences, envisaged by Item 4 of Article 951 of this
Code.
Article 951. The Consequences of Insurance Over and Above the
Insured Value
1. If the insurance sum, referred to in the contract of property
insurance or entrepreneurial risk, exceeds the insured value, the
contract shall be void in that part of the sum which exceeds the insured
value.
The excessively paid part of the insurance premium shall not be
subject to return in this case.
2. If in accordance with the insurance contract the insurance
premium is contributed by instalments and by the time of ascertaining the
circumstances, referred to in Item 1 of this Article, it has not been
contributed in full, the remaining insurance contributions shall be paid
in the amount reduced in proportion to the decrease in the amount of the
insurance sum.
3. If the overestimation of the insurance sum in an insurance
contract has been the consequence of deceit on the part of the insurant,
the insurer shall have the right to demand that the contract be
recognized as invalid and the related losses caused to him be compensated
in the amount that exceeds the sum of the insurance premium received by
him from the insurant.
4. The rules, envisaged in Items 1-3 of this Article, shall also be
accordingly applied in the case where the insurance sum has exceeded the
insured as a result of insurance of one and the same facility by two or
several insurers (double insurance).
The amount of insurance compensation subject to payment in this case
by each insurer shall be cut down in proportion to the decrease in the
original insurance sum under the relevant insurance contract.
Article 952. Property Insurance Against Different Insurance Risks
1. Property and entrepreneurial risk may be insured against
different insurance risks both under one and several insurance contracts,
including contracts with different insurers.
In these cases the amount of the total insurance sum may exceed the
insured value in all contracts.
2. If the obligation of insurers to pay the insurance compensation
for the same consequences of the onset of one and the same insured
accident follows from two or several contracts, concluded in keeping with
Item 1 of this Article, the rules, stipulated by Item 4 of Article 951 of
this Code, shall be applied to such contracts in the respective part.
Article 953. Coinsurance
An insurance object may be jointly insured under one insurance
contract by several insurers (coinsurance). If such contract does not
define the rights and obligations of each insurer, they shall be liable
jointly and severally to the insurant (beneficiary) for the payment of
insurance compensation under the property insurance contract or of the
insurance sum under the personal insurance contract.
Article 954. Insurance Premium and Insurance Instalments
1. Insurance premium shall be understood to mean the payment for
insurance which the insurant (beneficiary) shall be obliged to make to
the insurer in the procedure and in time-limits fixed of the insurance
contract.
2. In estimating the amount of the insurance premium subject to
payment under the insurance contract the insurer shall have the right to
apply the insurance rates elaborated by him which determine the premium,
collected from the unit of the insurance sum with due account of the
object of insurance and the character of insurance risk.
In cases provided for by the law the amount of the insurance premium
shall be estimate in keeping with insurance rates, established or
regulated by state insurance supervision bodies.
3. If the insurance contract provides for the payment of the
insurance premium by instalments, the contract may determine the
consequences of the non-payment of regular insurance instalments within
the established time-limits.
4. If an insured accident took place before the payment of a regular
insurance instalment which is overdue, the insurer shall have the right
to offset the amount of the overdue insurance instalment at a time of
estimating the amount of insurance compensation subject to payment under
the property insurance contract or the insurance sum under the personal
insurance contract.
Article 955. Replacement of the Insured Person
1. In case where the contract of insurance of the risk of liability
for the infliction of harm (Article 931) has insured the liability of a
person other than the insurant, the latter shall have the right, unless
otherwise stipulated by the contract, to replace this person by another
one at any time before the onset of the insured accident by notifying the
insurer about this in writing.
2. The insured person, named in a personal insurance contract, may
be replaced by another person on the initiative of the insurant and with
the consent of the insured person and the insurer.
Article 956. The Replacement of the Beneficiary
The insurant shall have the right to replace the beneficiary, named
in the insurance contract, by another person while notifying the insurer
about this in writing. The beneficiary, appointed with the consent of the
insured person (Item 2 of Article 934), may be replaced under the
personal insurance contract only with the consent of this person.
The beneficiary may not be replaced by another person after he has
fulfilled any obligation under the insurance contract or has presented to
the insurer his claim for the payment of insurance compensation or the
insurance sum.
Article 957. The Beginning of the Validity of the Insurance Contract
1. An insurance contract, unless it provides for otherwise, shall
enter into force at the time of payment of the insurance premium or its
first instalment.
2. Insurance, stipulated by the insurance contract, shall extend to
the insured accidents which have taken place after the entry of the
insurance contract into force, unless the contract provides for a
different period of the started operation of insurance.
Article 958. The Termination of an Insurance Contract Short of the
Term
1. An insurance contract shall cease to be valid before the
beginning of the period for which it was concluded, if after its entry
into force the possibility of the onset of an insured accident
disappeared and insurance risk ceased to exist due to the circumstances
other than the insured accident. Such circumstances include in
particular:
the destruction of insured property for reasons other than the onset
of an insured accident;
the termination of business activity in the statutory order by the
person who has insured the entrepreneurial risk or civil liability risk,
associated with this activity.
2. The insurant (beneficiary) shall have the right to waive the
insurance contract at any time, if by the time of his refusal the
possibility of the onset of an insured accident had not disappeared to
the circumstances, referred to in Item 1 of this Article.
3. If the insurance contract ceases to be valid short of the term
due to the circumstances, referred to in Item 1 of this Article, the
insurer shall have the right to the part of the insurance premium in
proportion to the time during which insurance was effected.
If the insurant (beneficiary) waives the insurance contract short of
the term, the insurance premium paid to the insurer shall not be subject
to return, unless otherwise stipulated by the contract.
Article 959. The Consequences of Increased Insurance Risk During the
Validity Term of the Insurance Contract
1. In the period of validity of the property insurance contract the
insurant (beneficiary) shall be obliged to inform the insurer about the
substantial changes which have become known to him in the circumstances
communicated to the insurer during the conclusion of the contract, if
these changes can substantially influence insurance risk by increasing
it.
Changes, stipulated in the insurance contract (insurance policy) and
in the insurance rules given to the insurant, shall be recognized as
considerable in any case.
2. The insurer who is notified about the circumstances entailing the
increase risk shall have the right to demand the introduction of changes
in the insurance contract or the payment of an additional insurance
premium in proportion to the increase in risk.
If the insurant (beneficiary) objects to changes in the terms and
conditions of the insurance contract or to the additional charge to the
insurance premium, the insurer shall have the right to demand the
cancellation of the contract in keeping with the rules, provided for by
Chapter 29 of this Code.
3. In case of default of the obligation by the insurant or
beneficiary, provided for by Item 1 of this Article, the insurer shall
have the right to demand the dissolution of the insurance contract and
the compensation for the losses caused by the cancellation of the
contract (Item 5 of Article 453).
4. The insurer shall have no right to demand the cancellation of the
insurance contract, if circumstances entailing the increase in insurance
risk have already disappeared.
5. In case of personal insurance the consequences of changes in
insurance risk during the validity term of the insurance contract,
referred to in Items 2 and 3 of this Article, may take place, if only
they are expressly envisaged in the contract.
Article 960. The Assignment of the Rights to Insured Property to
Another Person
In case of the assignment of the rights to insured property from the
person in whole interest the insurance contract was concluded to another
person, the rights and obligations under this contract shall be
transferred to the person to whom the rights to property have passed,
exception being made for the cases of the compulsory seizure of property
on the grounds, referred to in Item 2 of Article 235 of this Code, and of
the refusal from the right of ownership (Article 236).
The person to whom the rights to insured property has been
transferred shall at once notify the insurer about this.
Article 961. The Notification of the Insurer about the Onset of an
Insured Accident
1. Under the property insurance contract the insurant, who was
informed about the onset of the insurance accident, shall be obliged to
notify without delay the insurer or its representative about its onset.
If the contract provides for a definite date and/or method of
notification, the latter shall be effected in the stipulated period and
the method, indicated in the contract.
The same obligation lies with the beneficiary who knows about the
conclusion of the insurance contract in his favour, if he intends to
avail himself of the right to insurance compensation.
2. Default of the obligation, provided for by Item 1 of this Article
shall entail the insurer to waive the payment of insurance compensation,
unless it is provided that the insurer had learnt about the onset of the
insured accident in due time or that the insurer has no information about
this could not influence his obligation to pay insurance compensation.
3. The rules, envisaged by Items 1 and 2 of this Article, shall be
applied accordingly to the personal insurance contract, if the death of
the insured person or the infliction of injury on his health is an
insured accident. In this case the date of notification of the insurer,
specified by the contract may not be less than 30 days.
Article 962. The Diminution of Losses from the Insured Accident
1. With the onset of the insured accident, provided for by the
property insurance contract, the insurant shall be obliged to take
reasonable measures available in the present circumstances in order to
reduce possible losses.
In taking such measures the insurant shall follows the instructions
of the insurer, if they have been brought to the notice of the insurant.
2. Expenses on the reduction of losses subject to compensation by
the insurer shall be reimbursed by the insurer, if such expenses were
necessary or made in order to fulfil the insurer's instructions, even if
appropriate measures had proved to be unsuccessful.
Such expenses shall be reimbursed in proportion to the ratio
between the insurance sum and the insured value, regardless of the fact
that together with the compensation for other losses they can exceed the
insurance sum.
3. The insurer shall be released from the compensation for the
losses which have arisen in consequence of the fact that the insurant
failed to take reasonable measures accessible to him in order ot reduce
possible losses.
Article 963. The Consequences of the Onset of an Insured Accident
Through the Fault of the Insurant, Beneficiary or the
Insured Person
1. The insurer shall be released from the payment of insurance
compensation or the insurance sum, if the insured accident commenced
owing to the intent of the insurant, beneficiary or insured person,
except for the cases, stipulated by Items 2 and 3 of this Article.
The law may provide for cases of the release of the insurer from the
payment of insurance compensation under the property insurance contracts
in case of the onset of an insured accident owing to gross negligence on
the part of the insurant or beneficiary.
2. The insurer shall not be released from the payment of insurance
compensation under the contract of insurance of civil liability for the
infliction of harm on human life or health, if harm was done through the
fault of the person responsible for it.
3. The insurer shall not be released from the payment of the
insurance sum which is subject under the personal insurance contract to
payment in the event of death of the insured person, if his death took
place because of suicide and by that time the insurance contract had been
in effect for not less than two years.
Article 964. The Grounds for the Release of the Insurer from the
Payment of Insurance Compensation and the Insurance Sum
1. Unless the law or the insurance contract provides for otherwise,
the insurer shall be released from the payment of insurance compensation
and the insurance sum, when the insured accident commenced owing to:
the impact of a nuclear blast, radiation or radioactive
contamination;
the hostilities, and also exercises and other military undertakings;
the civil war, popular unrest of any kind of strikes.
2. Unless the property insurance contract provides for otherwise,
the insurer shall be released from the payment of insurance compensation
for the losses sustained owing to the seizure, confiscation, requisition,
attachment or destruction of insured property according to the orders of
state bodies.
Article 965. The Assignment of the Insurant's Rights to Compensation
for Damage to the Insurer (Subrogation)
1. Unless the property insurance contract provides for otherwise,
the right of claim which the insurant (beneficiary) has to the person,
responsible for the losses reimbursed as a result of insurance, shall
assign within the paid sum of money to the insurer who has paid
insurance compensation. However, the contract clause that excludes the
assignment of the right of claim to the person who deliberately caused
damage shall be void.
2. The right of claim that has been transferred to the insurer shall
be implemented by him with the observance of the rules regulating the
relations between the insurant (beneficiary) and the person responsible
for losses.
3. The insurant (beneficiary) shall be obliged to give all documents
and evidence to the insurer and to provide him with all information
necessary for the implementation by the insurer of the right of claim
that has passed to him.
4. If the insurant (beneficiary) has abandoned his right of claim to
the person responsible for the losses compensated by the insurer, or if
the exercise of this right has become impossible through the fault of the
insurant (beneficiary), the insurer shall be released from the payment of
insurance compensation in full or in part and shall have the right to
demand the return of the excessively paid sum of compensation.
Article 966. Limitation Period for Claims Related to Property
Insurance
An action for claims following from the property insurance contract
may be filed during two years.
Article 967. Reinsurance
1. The risk of payment of insurance compensation or the insurance
sum, assumed by the insurer under the insurance contract may be insured
by him in full or in part at another insurer (insurers) under the
contract of reinsurance concluded with the latter.
2. The rules envisaged by the Chapter and subject to application to
the insurance of entrepreneurial risk shall be applied to the contract of
reinsurance, unless the contract of reinsurance provides for otherwise.
Under the contract of insurance (principal contract) the insurer who has
concluded the contract of reinsurance shall be deemed to be an insurant
in the latter contract.
3. In case of reinsurance the insurer shall remain liable to the
insurant under the principal insurance contract for the payment of
insurance compensation or the insurance sum.
4. It shall be permissible to conclude two or several contracts of
reinsurance.
Article 968. Mutual Insurance
1. Individuals and legal entities may insure their property and
other property interests, referred to in Item 2 of Article 929 of this
Code, on a mutual basis by means of pooling necessary resources in mutual
insurance societies.
2. Mutual insurance societies shall effect the insurance of property
and other property interests of their members and shall be non-profit
making organizations.
The specific aspects of the legal status of the mutual insurance
societies and the conditions of their activity shall be determined by the
law on mutual insurance in conformity with this Code.
3. The mutual insurance societies shall insure the property and
property interests of their members directly on the basis of their
membership, unless the societies' constituent documents provide for the
conclusion of insurance contracts in these cases.
The rules envisaged by this Chapter shall be applied to the
insurance relations between the mutual insurance society and its members,
unless otherwise stipulated by the law on mutual insurance, the
constituent documents of the relevant society or by the insurance rules,
adopted by it.
4. Obligatory insurance through mutual insurance shall be allowed in
cases, provided for by the law on mutual insurance.
5. As an insurer the mutual insurance society may effect the
insurance of the persons who are not society members, if such insurance
operations are provided for by its constituent documents, if the society
has been set up in the form of a profit-making organization, has a permit
(license) for appropriate insurance and meets other requirements,
established by the law on the organization of insurance business.
The insurance of the interests of the persons who are not members of
the mutual insurance society shall be effected by the society under
insurance contracts in keeping with the rules, provided for by this
Chapter.
Article 969. Obligatory State Insurance
1. The law may institute obligatory state insurance of the lives,
health and property of civil servants of some categories for the purpose
of ensuring the social interests of individuals and the interests of the
State.
Obligatory state insurance shall be effected at the expense of the
financial resources, appropriated for these purposes from the
corresponding budget to the ministries and other federal executive bodies
(insurants).
2. Obligatory state insurance shall be effected directly on the
basis of the laws and other legal acts on such insurance by state
insurance companies and other state organizations (insurers), indicated
in these acts or on the basis of insurance contracts, concluded by
insurers and insurants in accordance with these acts.
3. Obligatory state insurance shall be paid to the insurers in the
amount, defined by laws and other legal acts on such insurance.
4. The rules, envisaged by this Chapter, shall be applicable to
obligatory state insurance, unless otherwise stipulated by the laws and
other legal acts on such insurance and unless the contrary follows from
the substance of relevant insurance relations.
Article 970. The Application of General Rules for Insurance to
Special Types of Insurance
The rules, provided for by this Chapter, shall be applicable to the
relations of insurance of foreign investments against non-commercial
risks, marine insurance, medical insurance, insurance of bank deposits
and pensions, unless the laws on these types of insurance stipulate
otherwise.
Chapter 49. Agency
Article 971. Contract of Agency
1. Under the contract of agency one party (agent) shall undertake to
perform certain legal actions on behalf and at the expense of the other
party (principal). The rights and obligations under the transaction
completed by the agent shall accrue directly for the principal.
2. A contract of agency may be concluded with reference to the
period during which the agent has the right to act on behalf of the
principal or without such reference.
Article 972. Remuneration of the Agent
1. The principal shall be obliged to pay remuneration to the agent,
if this is stipulated by the law, other legal acts or the contract of
agency.
In cases where the contract of agency is connected with the business
activity of both parties or one of them, the principal shall be obliged
to pay remuneration to the agent, unless otherwise stipulated by the
contract.
2. In the absence of the clause on the amount of remuneration or the
procedure of its payment in the remunerated contract of agency,
remuneration shall be paid after the execution of agency in the amount,
estimated in keeping with Item 3 of Article 424 of this Code.
3. The agent who acts as a commercial representative (Item 1 of
Article 184) shall have the right to withhold, in keeping with Article
359 of this Code, the things he has at his disposal, which are subject to
the transfer to the principal as security of his claims under the
contract of agency.
Article 973. The Execution of Agency in Accordance with the
Trustee's Instructions
1. The agent shall be obliged to perform the agency given to him in
accordance with the principal's instructions. The instructions shall be
lawful, practicable and concrete.
2. The agent shall have the right to depart from the principal's
instructions, if it is necessary under the existing circumstances and in
the interests of the principal and if the agent could not inquire the
principal in advance or had not received an answer to his inquiry within
a reasonable period of time. The agent shall be obliged to notify the
principal about the admitted departures as soon as such information has
become possible.
3. The agent acting a commercial representative (Item 1 of Article
184) may be given by the principal the right to depart from the
instructions of the principal in his interests without a preliminary
inquiry about this. In this case the commercial representative shall be
obliged to notify the principal about the admitted departures within a
reasonable period of time, unless otherwise stipulated by the contract of
agency.
Article 974. The Obligations of the Agent
The agent shall be obliged:
to perform the agency given to him in person, except for the cases,
indicated in Article 976 of this Code;
to communicate to the principal all information about the progress
of the execution of agency at his request;
to convey to the principal without delay all the things received
under the deals, performed in pursuance of the agency;
to return without delay to the principal the power of attorney whose
validity term has, not expired upon the execution of agency or in case of
the termination of the contract of agency before it is executed and to
submit a report with appended covering documents, if this is required by
the terms and conditions of the contract or the character of agency.
Article 975. The Obligations of the Principal
1. The principal shall be obliged to issue to the agent a power of
attorney (powers of attorney) for the performance of legal actions
provided for by the contract of agency, except for the cases, stipulated
by the second paragraph of Item 1 of Article 182 of this Code.
2. Unless otherwise stipulated by the contract, the principal shall
be obliged:
to compensate for the agent's costs;
to provide the agent with pecuniary means needed for the execution
of agency.
3. The principal shall be obliged to accept from the agent without
delay all that has been performed in accordance with the contract of
agency.
4. The principal shall be obliged to pay remuneration to the agency,
if in keeping with Article 972 of this Code the contract of agency is
remunerated.
Article 976. The Transference of the Execution of Agency
1. The agent shall have the right to transfer the execution of
agency to another person (substitute) only in cases and on the terms,
provided for by Article 187 of this Code.
2. The principal shall have the right to challenge the substitute
chosen as an agent.
3. If a possible substitute of the agent is named in the contract of
agency, the agent shall not be answerable either for his choice or for
the conduct of his affairs.
If the right of the agent to transfer the execution of agency to
another person is not provided for by the contract or is provided for,
but the substitute is not named in it, the agent shall be answerable for
the choice of the substitute.
Article 977. The Termination of the Contract of Agency
1. The contract of agency shall be terminated in consequence of:
the revocation of agency by the principal;
the refusal of the agent;
the death of the principal or the agent, the recognition of any of
them as legally unfit, specially disabled or missing.
2. The principal shall have the right to revoke the agency, while
the agent shall have the right to abandon it at any time. An agreement
on the refusal from this right shall be void.
3. The party which waives the contract of agency that provides for
the agent's actions as a commercial representative shall notify the other
party about the termination of the contract within 30 days, unless the
contract provides for a longer period.
In case of the reorganization of a legal entity that is a commercial
representative the principal shall have the right to revoke the agency
without such a preliminary notification.
Article 978. The Consequences of the Termination of the Contract of
Agency
1. If a contract of agency is terminated before the agency has been
executed by the agent in full, the principal shall be obliged to
compensate for the agent's expenses incurred during the execution of the
agency, and when the agent was to receive remuneration, to pay to him the
remuneration as well in proportion to the work done by him. This rule
shall not be applied to the execution by the agent of the agency after he
has known or should have known about the termination of the agency.
2. The revocation of the commission by the principal shall not be a
ground for the compensation for the losses caused to the agent by the
termination of the contract of agency, except for the cases of the
termination of the contract that provides for the operation of the agent
as a commercial representative.
3. The refusal of the agent to execute the commission of the
principal shall not be a ground for the compensation for the losses
caused to the principal by the termination of the contract of agency,
except for the cases of the agent's refusal in the conditions when the
principal has no possibility of insuring his interests in a different
way, and also in cases of the refusal to execute the contract that
provide for the operation of the agent as a commercial representative.
Article 979. The Obligations of the Heirs of the Agent and the
Liquidator of the Legal Entity That Acts as an Agent
In case of death of the agent, his heirs shall be obliged to inform
the principal about the termination of the contract of agency and take
measures needed to protect the principal's property, in particular to
preserve his things and documents and thereupon to transfer this property
to the principal.
The same obligation shall lie with the liquidator of the legal
entity that acts as an agent.
Chapter 50. Actions in the Interest of Other People
Without Commission
Article 980. Terms for Actions in the Interest of Other People
1. Actions without commission, other instruction or the interested
person's consent promised in advance for the purpose of averting harm to
his personality or property, executing his obligation or in other
legitimate interests (actions in the interest of other people) shall ne
performed due to the obvious benefit or profit and to the actual and
probable intentions of the interested person and with care and diligence
vision requisite in the circumstances of the case.
2. The rules, envisaged by this Chapter, shall not be applied to
actions in the interest of other persons, committed by state and
municipal bodies, for which such actions are one of the purposes of their
activity.
Article 981. Notification of the Interested Person about Actions in
His Interest
1. A person who acts in the interest of another person shall be
obliged to inform the interested person about this at the first
opportunity and wait during a reasonable period of time for his decision
on the approval or disapproval of the undertaken actions, unless such
waiting entails serious damage to the interested person.
2. It shall not be required to specially inform the interested
individual about the actions in his interest, if such actions are
undertaken in his presence.
Article 982. The Consequences of the Approval by the Interested
Person of Actions in His Interests
If a person for the benefit of whom actions are taken without his
commission adopts these actions, the rules for the contract of agency or
a different contract that corresponds to the character of the undertaken
actions shall be applied to the relations between the parties, even if
this approval was oral.
Article 983. The Consequences of the Non-approval by the Interested
Person of Actions in His Interest
1. Actions in the interest of other people committed after it has
become known to the performer of these actions that they are not approved
by the interested person shall not entail obligations for the latter
either in respect of the performer of these actions or of third persons.
2. Actions undertaken to prevent danger for the life of the person
who is imperiled shall also be allowed against the will of this person,
while the discharge of the obligation of maintaining anybody shall be
allowed against the will of the person charged with this obligation.
Article 984. Compensation for Losses for the Person Who Acted in the
Interest of Other People
1. Requisite expenses and other real damage sustained by the person
who acted in the interest of other people in accordance with the rules,
provided for by this Chapter, shall be subject to compensation by the
interested person, with the exception of the expenses incurred by the
actions referred to in Item 1 of Article 983 of this Code.
The right to compensation for necessary and other real damage shall
also be retained in case where actions in the interest of other people
have not brought about the expected result. However, in case of
preventing damage to the property of another person the amount of
compensation shall not exceed the value of property.
2. Expenses and other losses of the person who acted in the interest
of other people, incurred by him in connection with the actions
undertaken after the receipt of approval by the interested person
(Article 982), shall be reimbursed according to the rules for a contract
of the relevant type.
Article 985. Remuneration for Actions in the Interest of Other
People
A person whose actions in the interest of other people have led to
the result positive for the interested person shall have the right to
receive remuneration, if such right is provided for by law, the agreement
with the interested person or the business turnover customs.
Article 986. The Consequences of a Transaction in the Interest of
Other People
The obligations under the transaction concluded in the interest of
other people shall pass to the person in whose interest it has been made,
subject to the approval by him of this transaction and if the other party
does not object against such passage or has known or should have known
during the conclusion of the transaction that it was concluded in the
interest of other people.
With the passage of obligations under such transaction to the person
in whose interest it was concluded, the rights under this transaction
shall also be transferred to the latter person.
Article 987. Unjust Enrichment in Consequences of Actions in the
Interest of Other People
If actions which are not directly aimed at the security of the
interests of another person, including in the case where the person who
has committed them mistakenly supposed that he acts in his own interest,
have led to the unjust enrichment of another person, the rules, provided
for by Chapter 60 of this Code shall be applied.
Article 988. The Compensation for the Harm Inflicted by Actions in
the Interest of Other People
Relations involved in the compensation of the harm inflicted by
actions in the interest of other people on the interested person or third
persons, shall be regulated by the rules of Chapter 59 of this Code.
Article 989. The Report of the Person Who Acted in the Interest of
Other People
The person who acted in the interest of other people shall be
obliged to submit to the person in whose interest such actions have been
committed his report with an indication of the obtained incomes and
incurred expenses and other losses.
Chapter 51. Commission
Article 990. The Contract of Commission
1. Under the contract of commission one party (commission agent)
shall undertake to perform one or several transaction on its behalf on
the instruction of the other party (principal) for remuneration at the
expense of the principal.
In a transaction conducted by the commission agent with a third
person the commission agent shall acquire and become to be bound,
although the principal was named in the transaction or entered in direct
relations with the third person in the performance of the transaction.
2. A contract of commission may be concluded for an indefinite
period or without reference of its validity term with reference or
without reference of the territory of its execution, with the obligation
of the principal not to give to third persons the right of making in his
interests and at his expense transactions, the conduct of which has been
entrusted to the commission agent, or without such obligation, with
conditions or without them for the assortment of goods which are the
subject of commission.
3. The law and other legal acts may provide for specificity of the
contract of commission of particular kinds.
Article 991. Commission Fee
1. The principal shall be obliged to pay a commission fee to the
commission agent and when the commission agent has stood the surety for
the execution of the transaction by a third person (del credere) the
principal shall also pay an additional fee in the amount and in the order
fixed in the contract of commission.
If the contract does not provide for the amount of the fee or the
procedure for its payment and the amount of the fee cannot be determined
on the basis of the contract, the fee shall be paid after the execution
of the contract of commission in the amount, defined in conformity with
Item 3 of Article 424 of this Code.
2. If a contract of commission has not been executed for the reasons
depending on the principal, the commission agent shall retain the right
of a commission fee, and also to compensation for the incurred expenses.
Article 992. The Execution of a Commission Order
The order assumed by the commission agent the latter shall be
obliged to perform on the conditions most favorable for the principal in
accordance with the instructions of the principal, and in the absence if
such instructions of the principal, and in the absence of such
instructions in the contract of commission the commission agent shall be
obliged to perform the order in keeping with the business turnover
customs or other usual requirements.
In case where the commission agent has performed a transaction on
the conditions more favourable than those which have been indicated by
the principal, the additional benefit shall be divided between the
principal and the commission agent, unless otherwise stipulated by the
agreement of the parties.
Article 993. Liability for the Non-execution of the Transaction
Concluded for the Principal
1. The commission agent shall not be liable to the principal for the
non-execution by a third person of the transaction concluded with him at
the expense of the principal, except for the cases where the commission
agent has not displayed the necessary circumspection in the choice of
this person or has stood surety for the performance of the transaction
(del credere).
2. If a third person does not fulfil the transaction concluded with
him by the commission agent, the latter shall be obliged to inform at
once the principal about this, gather necessary evidence, and also to
transfer to him the rights in this transaction on the demand of the
principal and with the observance of the rules for the assignment of a
claim (Articles 382-386, 388 and 389).
3. The cession of rights to the principal in a transaction on the
basis of Item 2 of this Article shall be allowed, regardless of the
agreement of the commission agent with a third person, which bans or
restricts such cession. This shall not release the commission agent from
liability to a third person in connection with the cession of the right
in violation of the agreement on its ban or restriction.
Article 994. Subcommission
1. Unless otherwise stipulated by the contract of commission, the
commission agent shall have the right to conclude a contract of
subcommission with another person for the purpose of executing this
contract, remaining to be liable for the actions of the sub-commissioner
to the principal.
Under the contract of subcommission the commission agent shall
acquire the rights and obligations of the principal in respect of the
subcommissioner.
2. Until the termination of the contract of commission the principal
shall not have the right to enter into relations with the subcommissioner
without the consent of the commission agent, unless otherwise stipulated
by the contract of commission.
Article 995. Departures from the Principal's Instructions
1. The commission agent shall have the right to depart from the
principal's instructions, if this is necessary under the present
circumstances of the case in the interests of the principal and the
commission agent could not acquire the principal in advance or did not
receive an answer to his inquiry within a reasonable period of time. The
commission agent shall be obliged to notify the principal about the
departures made as soon as the notification has become possible.
The commission agent who acts as a businessman may be given by the
principal the right to depart from his instructions without a preliminary
inquiry. In this case the commission agent shall be obliged to notify the
principal about the departures made within a reasonable period of time,
unless otherwise stipulated by the contract of commission.
2. The commission agent who has sold property at the price below
that agreed upon with the principal, shall be obliged to compensate to
the latter for the difference, unless he proves that he had no
possibility of selling property at the agreed price and the sale at a
lower price prevented still greater losses. In case where the commission
agent has obliged to inquire the principal in advance, the commissioner
shall also prove that he had no possibility of receiving the preliminary
consent of the principal with a departure from his instructions.
3. If the commission agent has bought property at the price higher
than that agreed with the principal, the latter, if he does not wish to
accept such purchase, shall be obliged to state about this to the
commission agent within a reasonable period of time upon the receipt from
him the notification about the conclusion of the transaction with a third
person. Otherwise the purchase shall be recognized as accepted by the
principal.
If the commission agent stated hat he accepts the difference in
prices at its expense, the principal shall not have the right to waive
the transaction concluded for him.
Article 996. The Rights to the Things Which Are the Subject of
Commission
1. Things which the commission agent received from the principal or
brought at the expense of the principal shall be the property of the
latter.
2. In accordance with Article 359 of this Code the commissioner
shall have the right to withhold the things which he has and which are
subject to the transfer to the principal or the person indicated by the
principal in security for his claims under the contract of commission.
In the event of declaring a principal insolvent (bankrupt) the said
right of the commissioner shall be ceased and his claims to the principal
within the cost of things which he has retained shall be satisfied in
keeping with Article 360 of this Code on a par with the claims secured
with pledge.
Article 997. The Satisfaction of the Claims of the Commission Agent
from the Sums of Money Due to the Principal
The commission agent shall have the right, in accordance with
Article 410 of this Code, to withhold all the sums of money due to him
under the contract of commission, received by him from the principal.
However, the principal's creditors who enjoy advantage with regard to the
pledgees in respect of the sequence of satisfying their claims from the
sums of money withheld by the commission agent.
Article 998. The Liability of the Commission Agent for the Loss and
Shortage of, or Damage to, the Principal's Property
1. The commission agent shall be liable to the principal for the
loss and shortage of, or damage to, the principal's property held by him.
2. If in this property there are damages or shortages during the
acceptance by the commission agent of property, forwarded, by the
principal or received by the commission agent for the principal, the
damages and shortages being noticed in case of an outward inspection, and
also has been inflicted by anybody on the principal's property held by
the commission agent, the commission agent shall be obliged to take
measures protecting the rights of the principal, to gather necessary
evidence and to inform the principal about this without delay.
3. The commission agent who has not insured the principal's property
held by him shall be liable for his only in cases where the principal
has prescribed him to insure property at the expense of the principal or
where the insurance of this property by the commission agent is provided
for by the contract of commission or by the business turnover customs.
Article 999. The Report by the Commission Agent
Upon the execution of the instruction the commission agent shall be
obliged to submit to the principal his report and to give him all that he
has received under the contract of commission. The principal who has
objections to the report shall be obliged to inform the commission agent
during 30 days since the receipt of the report, unless the agreement
between the parties has fixed a different period of time. Otherwise the
report shall be deemed to be accepted in the absence of a different
agreement.
Article 1000. The Acceptance by the Principal of Everything
Performed Under the Contract of Commission
The principal shall be obliged:
to accept from the commission agent everything performed under the
contract of commission;
to inspect the property acquired by the commission agent for him and
to inform the latter without delay about the defects discovered in this
property;
to release the commission agent from the obligation assumed to a
third person in the execution of the commission order.
Article 1001. Compensation for the Expenses to Be Incurred in the
Execution of a Commission Order
The principal shall be obliged to compensate for the sums of money,
spent by the commission agent to execute the commission order in addition
to the payment of a commission fee and in requisite cases also an
additional fee for del credere.
The commission agent shall have no right to recompense the expenses
on the storage of the principal's property held by him, unless otherwise
stipulated by the law or the contract of commission.
Article 1002. The Termination of the Contract of Commission
The contract of commission shall be terminated in consequence of:
the refusal of the principal to execute the contract;
the refusal of the commission agent to execute the contract;
the refusal of the principal to execute the contract in cases
provided for by the law or the contract;
the death of the commission agent, the recognition of him as legally
unfit, specially incapable or missing;
the recognition of an individual businessman, who is a commission
agent, as insolvent (bankrupt).
In case of declaring that the commission agent is insolvent
(bankrupt), his rights and obligations in transactions, committed by him
for the principal in pursuance of the instructions of the latter, shall
pass to the principal.
Article 1003. The Revocation of a Commission Note by the Principal
1. The principal shall have the right to refuse at any time to
execute the contract of commission by revoking the note given to the
commission agent. The commission agent shall have the right to demand the
compensation for the losses caused by the revocation of the order.
2. In case where a contract of commission has been concluded
without an indication of its validity term the principal shall be obliged
to notify the commission agent about the termination of the contract
within 30 days, unless the property provides for a longer period of
notification.
In this case the principal shall be obliged to pay to the commission
agent a charge for the deals made by him before the termination of the
contract, and also to reimburse to the commission agent the expenses,
incurred by him before the cessation of the contract.
3. In case of revocation of the note the principal shall be obliged,
within the period fixed by the contract of commission agent, and if such
period is not fixed, also to discharge at once of his property held by
the commission agent. If the principal fails to discharge this
obligation, the commission agent shall have the right to put the property
in storage at the expense of the principal or to sell it at the price
most remunerative for the principal.
Article 1004. The Refusal of the Commission Agent to Execute the
Contract of Commission
1. The commission agent shall have no right, unless otherwise
stipulated by the contract of commission, to refuse to execute it, with
the exception of the case where the contract was concluded without an
indication of its validity term. In this case the commission agent shall
notify the principal about the termination of the contract within 30
days, unless the contract provides for a longer period of time.
The commission agent shall be obliged to take measures needed for he
safety of the principal's property.
2. Unless the contract of commission stipulates a different period
of time, the principal shall dispose of his property under the authority
of the commission agent within 15 days since the day of the receipt of
the notice about the commission agent's refusal to execute the note. If
he does not discharge this obligation, the commission agent shall have
the right to put the property in storage at the expense of the principal
or to sell it at the price most remunerative for the principal.
3. Unless otherwise stipulated by the contract of commission, the
commission agent who has refused to perform the note shall retain the
right to a commission charge for the deals made by him before the
termination of the contract, and also to the compensation for the
expenses incurred before this time.
Chapter 52. Agency Service
Article 1005. The Brokerage Contract
1. Under the brokerage contract one party (agent) shall undertake
for remuneration to perform legal and other actions on the instruction of
the other party (principal) on his own behalf, but at the expense of the
principal or on behalf and at the expense of the principal.
In a transaction made by the agent with a third person in his own
name and at the expense of the principal, the agent shall acquire rights
and become to be bound, although the principal has been named in the
transaction or entered in direct relations with a third party for the
execution of the transaction.
In a transaction made by the agent with a third person on behalf and
at the expense of the principal, the rights and obligations shall arise
for the principal.
2. In cases where the brokerage contract concluded in written form
provides for the agent's general obligations for making deals on behalf
of the principal, the latter shall have no right in his relations with
third persons to refer to the lack of requisite obligations by the agent,
unless he proves that the third person knew or should have known about
the limitation of the agent's obligations.
3. The brokerage contract may be concluded for an indefinite period
or without an indication of its validity term.
4. The law may provide for the specific aspects of particular types
of the brokerage contract.
Article 1006. The Bonus of the Agent
The principal shall be obliged to pay to the agent the bonus in the
amount and in the order established by the brokerage contract.
If the brokerage contract does not provide for the amount of the
nobis of the agent and the latter cannot be estimated on the basis of he
contractual terms, the bonus shall be subject to payment in amount,
specified in keeping with Item 3 of Article 424 of this Code.
In the absence of contractual terms on the procedure for the payment
of the agent's bonus, the principal shall be obliged to pay the bonus
during a week since the time of the submission of a report by the agent
to him for the past period, unless a different procedure for the payment
of the bonus follows for the substance of the contract or the business
turnover customs.
Article 1007. The Restriction of the Rights of the Principal and the
Agent by the Brokerage Contract
1. The brokerage contract may provide for the principal's obligation
not to conclude similar brokerage contracts with other agents acting on
the territory defined by the contract or to refrain from the independent
activity on this territory, which is analogous to the activity that makes
up the subject of the brokerage contract.
2. The brokerage contract may provide for the agent's obligation not
to conclude with other principals similar contracts, which shall be
executed on the territory coinciding in full or in part with the
territory indicated in the contract.
3. The terms and conditions of the contract, by virtue of which the
agent shall have the right to sell goods, perform works or render
services for an exclusively definite category of buyers (customers) or
exclusively for the buyers (customers) who have their place of location
or residence on the territory defined by the contract, shall be void.
Article 1008. Reports by the Agent
1. During the performance of the brokerage contract the agent shall
be obliged to submit his reports to the principal in the order and in the
time-limits which are provided for by the contract. In the absence of
appropriate terms and conditions in the contract, reports shall be
submitted by the agent to the extent of the execution of the contract by
him or upon the expiry of the validity term of the contract.
2. Unless otherwise stipulated by the brokerage contract, the
agent's report shall be enclosed with necessary proof of the expenses
incurred by the agent at the expense of the principal.
3. The principal who has objections to the agent's report shall be
obliged to communicate them to the agent within 30 days since the day of
receipt of he contract, unless the agreement of the parties stipulates a
different period of time. Otherwise the report shall be deemed to be
accepted by the principal.
Article 1009. The Sub-agency Contract
1. Unless otherwise stipulated by the brokerage contract, the agent
shall have the right to conclude a sub-agency contract with another
person for the purpose of executing the contract, being liable for the
actions of the sub-agent to the principal. The brokerage contract may
provide for the agent's obligation to conclude a sub-agency contract with
or without an indication of concrete terms and conditions of such
contract.
2. The sub-agent shall have no right to conclude with third parties
transactions on behalf of the principal under the brokerage contract,
except for the cases where in conformity with Item 1 of Article 187 of
this Code, the sub-agent may act on the basis of substitution. The
procedure and consequences of such substitution shall be determined
according to the rules, provided for by Article 976 of this Code.
Article 1010. The Termination of the Brokerage Contract
The brokerage contract shall cease in consequence of:
the refusal of one of the parties to execute the contract concluded
without fixing the period of the completion of its validity;
the death of the agent, the recognition of him as legally unfit,
specially incapable or missing;
the recognition of the individual businessman who is an agent as
insolvent (bankrupt).
Article 1011. The Application of the Rules for Contracts of Agency
and Commission to the Relations of Agents
The rules provided for by Chapter 49 or Chapter 51 of this Code
shall be applied accordingly to the relations following from the
brokerage contract depending on the fact whether the agent acts under the
terms and conditions of this contract on behalf of the principal or in
his own name, unless these rules contradict the provisions of this
Chapter or the substance of the brokerage contract.
Chapter 53. Trust of Estate
Article 1012. The Contract of Trust of Estate
1. Under the contract of trust of estate one party (settler of
trust) shall transfer estate in trust to the other party (trust
administrator) for a definite period, while the other party shall
undertake to administer this estate in the interests of the seller of
trust or the person indicated by him (beneficiary).
The transfer of estate in trust shall not involve the assignment of
the right of its ownership to the trust administrator.
2. While implementing the trust of estate, the trust administrator
shall have the right to perform any legal and actual actions in the
interests of the beneficiary in keeping with contract of trust of estate.
The law or the contract may provide for restrictions on individual
actions for the trust of estate.
3. Transactions with estate transferred in trust shall be made by
the trust administrator oh his behalf by pointing out that he acts as
such administrator. This proviso shall be deemed to be observed, if
during the actions which do not require the written form the other party
is informed about them by the trust administrator acting in this capacity
and if the written documents bear the note T.A. after the name of the
trust administrator.
In the absence of the indication about the operation of the trust
administrator in this capacity, the trust administrator shall bind
himself to the third persons and shall be liable to them only within the
property belonging to him.
Article 1013. The Object of Trust
1. The objects of trust may include enterprises and other property
complexes, particular facilities relating to real estate, securities,
rights certified by non-documentary securities, exclusive rights and
other property.
2. Money may not be an independent object of trust with the
exception of cases, provided for by the law.
3. Estate held in economic or operative management may not be
transferred in trust. The transfer in trust of estate held in economic or
operative management is possible only after the liquidation of the legal
entity which was in charge of property or carried out operative
management or after the termination of the right of economic or operative
management and its passage into the possession of the owner on other
statutory grounds.
Article 1014. The Seller of Trust
The owner of estate or another person in cases, specified by Article
1026 of this Code, shall be a seller of trust.
Article 1015. The Trust Administrator
1. An individual businessman or a products-making organization may
be a trust administrator, exception being made for a unitarian
enterprise.
In cases where the trust of estate is exercised on the statutory
grounds, the post of the trust administrator may be held by the
individual who is not a businessman or by the non-profit-making
organization with the exception of an institution.
2. Estate shall not be transferred in trust to a state body or a
local self-government body.
3. The trust administrator may not be a beneficiary under the
contract of trust of estate.
Article 1016. The Substantial Terms and Conditions of the Contract
of Trust of Estate
1. The contract of trust of estate shall indicate the following:
the structure of estate transferred in trust;
the name of the legal entity or the individual in whose interest the
trust of estate is exercised (the seller of trust or the beneficiary);
the amount and form of remuneration for the administrator, if it is
provided for by the contract;
the term of validity of the contract.
2. A contract of trust of estate shall be concluded for a term not
exceeding five years. For particular types of estate transferred in trust
the law may provide for other maximum terms for which contracts may be
concluded.
In the absence of the statement by one of the parties on the
termination of a contract upon the expiry of its validity term, it shall
be deemed to be prolonged for the same period and on the same conditions
which were provided by the contract.
Article 1017. The Form of the Contract of Trust of Estate
1. A contract of trust of estate shall be concluded in writing.
2. A contract of trust of real estate shall be concluded in the
form, provided for the contract of sale of real estate. The transfer of
real estate in trust shall be subject to state registration in the same
procedure that governs the transfer of the right of ownership of this
property.
3. The non-observance of the form of the contract of trust of estate
or of the requirement for the registration of the transfer of real estate
in trust shall invalidate the contract.
Article 1018. The Separation of Estate Held in Trust
1. Estate transferred in trust shall be separated from the other
estate of the seller of trust, and also from the estate of the trust
administrator. This estate shall reflect in the trust administrator's
separate balance-sheet, with an independent accounting being kept on its
basis. A separate bank account shall be opened for settlements in the
activity associated with trust.
2. The execution for the debts of the settler of trust on the estate
transferred by him in trust shall not be levied with the exception of the
insolvency (bankruptcy) of this person. In case of the bankruptcy of the
settler of trust the trust of this estate shall be ceased and it shall be
included in the bankrupt's estate.
Article 1019. The Transfer in Trust of Estate Encumbered with Pledge
1. The transfer of the pledged estate in trust shall not deprive the
pledgee of the right to every execution on this estate.
2. The trust administrator shall be warned about the fact that the
estate transferred in trust has been encumbered with pledge. If the trust
administrator did not know and should not know about the estate
encumbered with pledge and given to him in trust, he shall have the right
to demand in court the cancellation of the contract of trust of estate
and the payment of remuneration for one year that is due to him under the
contract.
Article 1020. The Rights and Obligations of the Trust Administrator
1. The trust administrator shall exercise the proprietary rights to
the estate transferred in trust within the limits prescribed by the law
and the contract of trust of estate. The trust administrator shall
dispose of real estate in cases, provided for by the contract of trust of
estate.
2. The rights, acquired by the trust administrator as a result of
actions in the trust of estate, shall be included in the estate
transferred in trust. The obligations arising as a result of such actions
of the trust administrator shall be executed at the expense of this
estate.
3. In order to protect the rights to estate in trust, the trust
administrator shall have the right to demand any removal of the
infringement of his rights (Articles 301, 302, 304 and 305).
4. The trust administrator shall submit to the seller of trust and
the beneficiary the report on his activity in the time-limits and in the
procedure, established by the contract of trust of estate.
Article 1021. The Transfer of Trust of Estate
1. The trust administrator shall effect the trust of estate in
person, except for the cases, provided for by Item 2 of this Article.
2. The trust administrator may charge another person with the
performance of actions necessary for the trust of estate on behalf of the
trust administrator, if he is authorized therefor by the contract of
trust of estate or has received the settler's consent with this in
written form, or is forced to do so by virtue of circumstances for the
safeguarding the interests of the settler of trust or the beneficiary and
has no possibility of receiving the settler's instructions in a
reasonable period of time.
The trust administrator shall be answerable for the actions of the
agent chosen by him as for his own actions.
Article 1022. The Liability of the Trust Administrator
1. The trust administrator who failed to show due care for the
interests of the beneficiary or the settler of trust in case of trust of
estate shall reimburse to the beneficiary the lost profit during the
trust of estate and to the settler of trust - the losses caused by the
loss of, or damage to, estate with due account of its depreciation, and
also the lost profit.
The trust administrator shall be liable for the inflicted losses,
unless he proves that these losses were caused by force majeure or by the
actions of the beneficiary or the settler of trust.
2. The obligations in the transaction made by the trust
administrator with the excess of power or with the contravention of the
limitations established for him shall be borne by the trust administrator
in person. If the third persons participating in the transaction did not
know or should not have known about the excess of power or about the
established limitations, the obligations which have arisen shall be
subject to satisfaction in the procedure, established by Item 3 of this
Article. In this case the settler of trust may demand that the trust
administrator should recompense the losses sustained by him.
3. The debts in obligations which have arisen in connection with
trust of estate shall be repaid at the expense of this estate. If such
estate is not sufficient, execution may be levied on the estate of the
trust administrator; and if his estate proves to be insufficient as well,
execution may be levied on the estate of the settler of trust that has
not been placed in trust.
4. The contract of trust of estate may provide for the submission of
mortgage by the trust administrator in the security for the reparation of
the losses that can be caused to the settler of trust or the beneficiary
by the improper execution of the contract of trust.
Article 1023. Remuneration for the Trust Administrator
The trust administrator shall have the right to the remuneration,
provided for by the contract of trust of estate, and also to the
reimbursement of the necessary expenses, made by him during the trust of
estate, at the expense of the incomes from the use of this property.
Article 1024. The Termination of the Contract of Trust of Estate
1. The contract of trust of estate shall be terminated in
consequence of:
the death of the individual who is a beneficiary or the liquidation
of the legal entity - also a beneficiary - unless the contract provides
for otherwise;
the refusal of the beneficiary to receive benefits under the
contract, unless the latter provides for otherwise;
the death of the individual who is a trust administrator, the
recognition of him as legally unfit, specially incapable or missing, and
also the recognition of the individual businessman as insolvent
(bankrupt);
the refusal of the trust administrator or the settler of trust to
carry out trust in connection with the impossibility for the trust
administrator to effect in person the trust of estate;
the rejection by the settler of trust of the contract for the reason
other than that indicated in the fifth paragraph of this Item, provided
that the remuneration specified by the contract has been paid to the
trust administrator;
the recognition of the businessman who is the settler of trust as
insolvent (bankrupt).
2. If one party abandons the contract of trust of estate, the other
party shall be notified about this three months before the termination of
the contract, unless the latter provides for a different date of
notification.
3. With the cessation of the contract of trust the estate held in
trust shall be transferred to the settler of trust, unless otherwise
stipulated by the contract.
Article 1025. The Transfer of Securities in Trust
In case of the transfer of securities in trust, they may be pooled
for the transfer in trust by different persons.
The authority of the trust administrator to dispose of securities
shall be defined in the contract of trust.
The specific features of trust of securities shall be determined by
the law.
The rules of this Article shall be applied accordingly to the
rights, certified by non-documentary securities (Article 149).
Article 1026. Trust of Estate on the Grounds Stipulated by the Law
1. Trust of estate may be instituted in the following cases:
on account of the need for the permanent trust of the estate of the
ward in cases provided for by Article 38 of this Code;
on the grounds of the restatement which has appointed the
testamentary executor;
on other grounds specified by the law.
2. The rules provided for by this Chapter shall be applied
accordingly to the relations involving the trust of estate, instituted on
the grounds, referred to in Item 1 of this Article, unless otherwise
stipulated by the law and unless the contrary follows from the essence of
such relations.
In cases where trust of estate is instituted on the grounds,
referred to in Item 1 of this Article, the rights of the settler of
trust, provided for by the rules of this Chapter, shall belong
accordingly to the body of guardianship, the testamentary execution or
any other person, indicated in the law.
Chapter 54. The Commercial Concession
Article 1027. The Contract of the Commercial Concession
1. Under the contract of the commercial concession one party (right
holder) shall undertake to grant to the other party (user) for
remuneration for a definite term or without reference to a term the right
of using in the business of the user a complex of exclusive rights
belonging to the right holder, including the right to the firm's name
and/or the commercial designation of the right holder, to protected
commercial information, and also to other contracted objects of exclusive
rights - trademarks, service marks, etc.
2. The contract of the commercial concession shall provide for the
use of a complex of exclusive rights, the business standing and
commercial know-how of the right holder in a definite scope (in
particular with the establishment of a minimum and/or maximum extent of
use), with an indication or without indication of the territory of use
with reference to a certain sphere of business activity (sales of goods
obtained from the right holder or produced by the user, other trade
activity, performance of works and provision of services).
3. Commercial organizations and private persons registered as
individual entrepreneurs may be the parties to the contract of the
commercial concession.
Article 1028. The Form and Registration of the Contract of the
Commercial Concession
1. A contract of the commercial concession shall be concluded in
writing.
The non-observance of the written form shall invalidate the
contract. Such contract shall be deemed to be void.
2. A contract of the commercial concession shall be registered by
the body which has registered the legal entity or the individual
entrepreneur acting as a right holder under the contract.
If the right holder has been registered as a legal entity or an
individual entrepreneur in a foreign State, the contract of the
commercial concession shall be registered by the body which has
registered the legal entity or individual entrepreneur who is a user.
In relations with third persons parties the parties to the contract
of the commercial concession shall have the right to refer to the
contract only since the time of its registration.
A contract of the commercial concession of the use of the object
protected by patent legislation shall also be subject to registration by
the federal executive body in the sphere of patents and trademarks. The
non-observance of this requirements shall invalidate the contract.
Article 1029. The Commercial Subconcession
1. The contract of the commercial concession may provide for the
right of the user to authorize other persons to make use of the complex
of exclusive rights granted to him or a part of this complex on the terms
of subconcession, agreed upon with the right holder or defined by the
contract of the commercial concession. The contract may provide for the
obligation of the user to submit during a definite period of time to a
definite number of persons the right of using said rights on the terms of
the subconcession.
A contract of the commercial subconcession may not be concluded for
a longer period than the contract of the commercial concession, on the
basis of which it is concluded.
2. If a contract of the commercial concession is invalid, the
contracts of the commercial subconcession concluded on its basis shall be
invalid as well.
3. Unless otherwise stipulated by the contract of the commercial
concession, concluded for a definite term, the rights and obligations of
the second right holder under the contract of the commercial
subconcession (the user under the contract of the commercial concession)
shall pass to the right holder in case of the termination of the contract
of the commercial concession short of the term, unless he refuses to
assume the rights and obligations under this contract. This rules shall
be applied accordingly in case of the cancellation of the contract of the
commercial concession, concluded without reference to a definite term.
4. The user shall bear subsidiary liability for the harm done to the
right holder by the actions of the second users, unless otherwise
stipulated by the contract of the commercial concession.
5. The rules for the contracts of the commercial concession,
specified by this Chapter shall be applied to the contracts of the
commercial subconcession, unless the contrary follows from the
specificity of the subconcession.
Article 1030. Remuneration under the Contract of the Commercial
Concession
Remuneration under the contract of the commercial concession may be
paid by the user to the right holder in the form of fixed non-recurrent
and periodical payments, deductions from proceeds, markups on the
wholesale price of goods given by the right holder for resale, or in
other form stipulated by the contract.
Article 1031. The Obligations of the Right Holder
1. The right holder shall be obliged:
to transfer technical and commercial documentation to its user and
provide other information needed by the user for the exercise of the
rights, granted to him under the contract of the commercial concession,
and also to brief the use and its workers on the matters connected with
these rights;
to issue contract-based licenses to the user by formalizing them in
the statutory manner.
2. Unless otherwise stipulated by the contract of the commercial
concession, the right holder shall be obliged:
to ensure the registration of the contract of the commercial
concession (Item 2 of Article 1028);
to render contract technical and consultative assistance for the
user, including assistance in the training and upgrading the skill of
workers;
to control the quality of goods (works and services), produced
(performed and rendered) by the user on the basis of the contract of the
commercial concession.
Article 1032. The User's Obligations
With account of the nature and specificity of the activity carried
on by the user under the contract of the commercial concession the user
shall be obliged:
to use the firm's name and/or the commercial designation of the
right holder in the way indicated by the contract during the activity
stipulated by the contract;
to ensure the compliance of the quality of goods, produced by him on
the basis of the contract, of the works performed and the services
rendered, with the quality of similar goods, works and services,
produced, performed or rendered directly by the right holder;
to observe the instructions and directions of the right holder,
intended for the compliance of the nature, methods and conditions of the
use of the complex of exclusive rights with the way it is used by the
right holder, including the directions regarding the external and
internal design of commercial premises, used by the user in the exercise
of the rights granted to him by the contract;
to render to the buyer (customer) all the additional services which
they could expect by acquiring (ordering) goods (works, services)
directly from the right holder;
not to divulge the right holder's secrets of production and other
confidential commercial information received from him;
to grant the specified number of subconcessions, if such obligation
is provided for by the contract;
to inform the buyers (customers) by the most patent method that he
uses the firm's name, the commercial designation, trademark, service mark
or any other means of individualization of virtue of the contract of the
commercial concession.
Article 1033. The Restrictions on the Rights of the Parties to the
Contract of the Commercial Concession
1. The contract of the commercial concession may provide for the
restrictions on the rights of the parties to this contract, in particular
may provide for the following:
the obligation of the right holder not to provide other persons with
similar complexes of exclusive rights for their use on the territory
assigned to the user or to refrain from his own similar activity on this
territory;
the obligation of the user not to compete with the right holder on
the territory to which the contract of the commercial concession extends
in terms of business activity carried out by the user with the use of the
exclusive rights belonging to the right holder;
the refusal of the user to receive under contracts of the commercial
concession similar rights from the competitors (potential competitors) of
the right holder;
the obligation of the user to get agreement with the right holder on
the place of location of commercial premises to be used in the exercise
of the exclusive rights granted under the contract, and also on their
external and internal design.
Restrictive conditions may be recognized as invalid on the demand of
the antimonopoly body or any other interested person, if these conditions
contradict the antimonopoly legislation in the light of the market
conditions and the economic position of the parties.
2. The conditions restricting the rights of the parties to the
contract of the commercial concession shall be void, if:
the right holder has the right to determine the price of the sale of
goods by the user or the price of works (services), performed (rendered)
by the user or to fix the upper or lower limit of these prices;
the user has the right to sell goods, perform works or render
services for the exclusively definite category of buyers (customers) or
exclusively for the buyers (customers) who have their place of location
(place of residence) on the territory defined by the contract.
Article 1034. The right Holder's Liability for Claims Presented to
the User
The right holder shall bear subsidiary liability for the claims made
to the user for the inconsistency of the quality of goods (works,
services), sold (performed or rendered) by the user under the contract of
the commercial concession.
Against the claims made to the user as the manufacture of the
products (goods) of the right holder, the latter shall be liable jointly
with the user.
Article 1035. The User's Right to Conclude a Contract of the
Commercial Concession for a New Term
1. The user who has discharged his obligations properly shall have
the right to conclude a contract for a new term on the same conditions
upon the expiry of the validity term of the contract of the commercial
concession.
2. The right holder shall have the right to refuse to conclude a
contract of the commercial concession for a new term, provided that
during three years since the expiry of the validity of this contract he
will not conclude with other persons similar contracts of the commercial
concession and give his consent to the conclusion of analogous contracts
of the commercial subconcession, the operation of which will extend to
the same territory on which the discontinued contract operated. If before
the expiry of the three-year period the right holder wished to grant to
anybody the same rights which had been granted to the user under the
discontinued contract, he shall be obliged to offer the user the
conclusion of a new contract or to reimburse the losses sustained by him.
With the conclusion of the new contract its terms and conditions shall be
not less favourable for the user than those of the discontinued contract.
Article 1036. Changes in the Contract of the Commercial Concession
A contract of the commercial concession may be changed in keeping
with the rules, provided for by Chapter 29 of this Code.
In their relations with third persons the parties to the contract of
the commercial concession shall have the right to refer to changes in the
contract only since the time of registration of these changes in the
procedure, stipulated by Item 2 of Article 1028 of this Code, unless they
prove that a third person knew or should have known about the earlier
change of the contract.
Article 1037. The Termination of the Contract of the Commercial
Concession
1. Each party to the contract of the commercial concession,
concluded without reference of its validity term, shall have the right to
abandon the contract at any time by notifying about this the other party
six months in advance, unless the contract provides for a longer period.
2. The anticipatory cancellation of a contract of the commercial
concession, concluded with the reference to its validity term, and also
the cancellation of a contract, concluded without reference to its
validity term, shall be subject to registration the procedure,
established by Item 2 of Article 1028 of this Code.
3. In case of the cessation of the right holder's right to the
firm's name and the commercial designation without the replacement of
them by new similar rights the contract of the commercial concession
shall cease to operate.
4. When the right holder or the user is declared to be insolvent
(bankrupt), the contract of the commercial concession shall cease to
operate.
Article 1038. The Validity of the Contract of the Commercial
Concession in Case of the Change of the Parties
1. The transfer to another person of any exclusive right, included
in the complex of exclusive rights given to the user, shall not be a
ground for changing or dissolving the contract of the commercial
concession. A new right holder shall become a party to this contract in
respect of the rights and obligations relating to the transferred
exclusive right.
2. In the event of the death of a right holder his rights and
obligations under the contract of the commercial concession shall pass to
his heir, provided that he has been registered or during six months since
the opening of inheritance gets registered as an individual businessman.
Otherwise the contract shall cease to operate.
The rights of the deceased right holder and his obligations shall be
accordingly exercised and discharged by the administrator appointed by
the respective notary before his heir assumes these rights and
obligations or before the heir is registered as an individual
businessman.
Article 1039. The Consequences of the Change of the Firm's Name or
the Commercial Designation of the Right Holder
In case of the change by the right holder of his firm's name or
commercial designation, the rights to the use of which are a part of the
complex of exclusive rights, the contract of the commercial concession
shall be valid with regard to the new firm's name or commercial
designation of the right holder, unless the user demands the dissolution
of the contract and the reimbursement for damages. If the contract
continues to operate, the user shall have the right to demand a
proportionate reduction of the remuneration due to the right holder.
Article 1040. The Consequences of the Termination of the Exclusive
Right the Enjoyment of Which Is Granted by the
Contract of the Commercial Concession
If during the validity term of the contract of the commercial
concession the validity term of the exclusive right under this contract
has expired or such right has ceased to operate an another ground, the
contract of the commercial concession shall be valid as before, with the
exception of the provisions relating to the discontinued right, while the
user, unless otherwise stipulated by the contract, shall have the right
to demand a proportionate reduction of the remuneration due to the right
holder.
If the rights to the firm's name or the commercial designation
belonging to the right holder cease to exist, the consequences, provided
for by Item 2 of Article 1037 and Article 1039 of this Code, shall occur.
Chapter 55. Particular Partnership
Article 1041. The Contract of Particular Partnership
1. Under the contract of particular partnership (contract for joint
activity) two or several persons (partners) shall undertake to pool their
contributions and to act jointly without forming a legal entity for the
deriving of profit of for the attaining another goal not inconsistent
with the law.
2. Only individual businessmen and/or profit-making organizations
may be the parties to the contract of particular partnership.
Article 1042. Contributions by Partners
1. All that is contributed to the common cause, including money,
other assets, professional and other knowledge, experience and skills,
and also business standing and business contracts, shall be recognized as
the contributions of the partners.
2. The contributions of partners shall be equal in value, unless the
contrary follows from the contract of particular partnership of from
actual circumstances. A monetary estimation of the partners's
contribution shall be carried out by agreement between the partners.
Article 1043. The Joint Assets of Partners
1. The assets contributed by partners and owned by them by right of
property, and also products manufactured as a result of their joint
activity shall be recognized as their common property in shares, unless
otherwise stipulated by the law or the contract of particular partnership
or unless the contrary follows from the substance of the obligation.
The assets owned by hem on the grounds different from the right of
property and contributed by the partners shall be used in the interests
of all the partners and comprise the common property of the partners in
addition to the assets held in their common ownership.
2. The accounting of the common property of the partners may be
entrusted by them to one of the legal entities which participate in the
contract of particular partnership.
3. The common property of the partners shall be used by their common
agreement, and in case of disagreement it shall be used in the order
prescribed by a court of law.
4. The obligations of the partners to maintain their common property
and the procedure for the reimbursement of expenses relating to the
discharge of these obligations shall be determined by the contract of
particular partnership.
Article 1044. The Conduct of the Common Affairs of Partners
1. In the conduct of their common affairs each partner shall have
the right to act on behalf of all the partners, unless the contract of
particular partnership stipulates otherwise that the affairs are
conducted by particular partners or jointly by all the participants in
the contract of particular partnership.
The consent of all the partners shall be required for the completion
of each transaction in case of the joint conduct of their affairs.
2. In relations with third persons the power of a partner to
conclude deals on behalf of all the partners shall be certified with the
power of attorney, issued to him by the other partners or with the
contract of particular partnership, concluded in written form.
3. In relations with third persons the partners may not refer to the
restriction of the rights of the partner who has completed the
transaction in the conduct of the common affairs of the partners, except
for the cases where they will prove that at the time of concluding the
transaction the third person knew or should have known about such
transactions.
4. A partner who has made on behalf of all the partners transactions
in respect of which his right to conduct the common affairs of the
partners was restricted may demand the reparation of the expenses
incurred by him at his own expense, if there are sufficient grounds to
believe that these transactions were necessary in the interests of all
the partners. Partners who have incurred losses in consequence of such
transactions shall have the right to demand their damages.
5. Decisions affecting the common affairs of the partners shall be
taken by the partners by common agreement, unless otherwise stipulated by
the contract of particular partnership.
Article 1045. The Right of a Partner to Information
Every partner shall have the right to get acquainted with all the
documents relating to the conduct of affairs regardless of the fact
whether is empowered to conduct the common affairs of the partners. The
abandonment of this right or its restriction, including by agreement
between the parties, shall be void.
Article 1046. Common Expenses and Losses of Partners
Procedure for the meeting of expenses and the compensation for
losses incurred in the joint activity of the partners shall be determined
by their agreement. In the absence of such agreement each partner shall
bear expenses and losses in proportion to the value of his contribution
to the common cause.
Any agreement which fully releases any partner from the
participation in the meeting of common expenses or the compensation for
losses shall be void.
Article 1047. The Liability of the Partners Under Common Obligations
1. If a contract of particular partnership is not associated with
the business activity of its participants, each partner shall be liable
for the common contractual obligations within all their property in
proportion to the value of his contribution to the common cause.
The partners shall be liable jointly for the common obligations
arising not from the contract.
2. If a contract of particular partnership is associated with
business activity of its participants, the partners shall be liable
jointly within all the common liabilities, regardless of the grounds for
their appearance.
Article 1048. The Distribution of Profit
Profit received by the partners as a result of their joint activity
shall be distributed in proportion to the value of the contributions made
by the partners to the common cause, unless otherwise stipulated by the
contract of particular partnership or by other agreement of the partners.
Any agreement on the elimination of any partner from profit sharing shall
be void.
Article 1049. The Allotment of a Partner's Share on the Demand of
His Creditor
The creditor of a participant in the contract of particular
partnership shall have the right to allot his share in the common
property in accordance with Article 255 of this Code.
Article 1050. The Termination of the Contract of Particular
Partnership
1. The contract of particular partnership shall be terminated in
consequence of:
the declaration of any partner as legally unfit, specially incapable
or missing, unless the contract of particular partnership or the
subsequent agreement provides for the conservation of the contract in
relations between the other partners;
the declaration of any partner as insolvent (bankrupt) with the
exception indicated in the second paragraph of this Item;
the death of a partner or the liquidation, or the reorganization of
the legal entity that participates in the contract of particular
partnership, unless the contract or the subsequent agreement provides for
the conservation of the contract in the relations between the other
partners or for the replacement of the deceased partner (liquidated or
reorganized legal entity) by his heirs (legal successors);
the refusal of any partner to take further part in the contract of
unlimited duration with the exception, indicated in the second paragraph
of this Item;
the dissolution of the contract of particular partnership, concluded
with reference to a definite validity term on the demand of one partner
in the relations between him and other partners with the exception,
indicated in the second paragraph of this Item;
the expiry of the validity term of the contract of particular
partnership;
the allotment of a partner's share on the demand of his creditor
with the exception, indicated in the second paragraph of this Item.
2. With the termination of a contract of particular partnership the
things, transferred for common possession and/or use of the partners,
shall be returned to the partners who have contributed them free of
charge, unless otherwise stipulated by the agreement of the parties.
Since the time of the termination of a contract of particular
partnership, its participants shall bear joint liability in case of
default on the common obligations with regard to third persons.
The partition of the property held in the common ownership of the
partners and of the common rights of claim which have arisen for them
shall be effected in the order, prescribed by Article 252 of this Code.
A partner who has contributed an individual thing shall have the
right to demand in court the return of this thing to him with the
termination of the contract of particular partnership subject to the
observance of the interests of the other partners and creditors.
Article 1051. The Abandonment of the Contract of Particular
Partnership of Unlimited Duration
A statement on the partner's abandonment of the contract of
particular partnership of unlimited duration shall be made by him at
least before three months before the supposed withdrawal from the
contract.
Any agreement on the limitation of the right to abandon the contract
of unlimited duration shall be void.
Article 1052. The Cancellation of the Contract of Particular
Partnership on the Demand of a Party Thereto
In addition to the grounds, indicated in Item 2 of Article 450 of
this Code a party to the contract of particular partnership, concluded
with reference to its validity term or the goal as a revocable proviso,
shall have the right to demand the cancellation of the contract in
relations between himself and the other partners for valid reasons with
the compensation for the real damage inflicted on the other partners by
the dissolution of the contract.
Article 1053. The Liability of the Partner in Respect of Whom the
Contract of Particular Partnership Has Been Dissolved
In case where a contract of particular partnership has not been
terminated as a result of the statement by any participant on the refusal
to continue his participation in it or of the dissolution of the contract
on the demand of one partner, the person whose participation in the
contract has ceased shall be liable to third persons under the common
obligations that have arisen during his participation in the contract, as
if he remained as a participant in the contract of particular
partnership.
Article 1054. Private Partnership
1. The contract of particular partnership may provide for the
non-disclosure of its existence for third parties (private partnership).
The rules for the contracts of particular partnership, provided for by
this Chapter, shall be applicable to such unofficial contract, unless
otherwise stipulated by the Article or unless the contrary follows from
the private partnership.
2. In relations with third persons each participant of the private
partnership shall be liable for all his property in the transactions he
has concluded on his own behalf in the common interests of the partners.
3. In relations between the partners the obligations which have
arisen during their joint activity shall be regarded as common.
Chapter 56. Public Promise of a Reward
Article 1055. The Obligation to Pay a Reward
1. A person who has announced in public the payment of a pecuniary
remuneration or the issue of a different reward (payment of a reward) to
the person who will perform the lawful action, indicated in the
announcement within the period mentioned by it, shall be obliged to pay
the promised reward to anybody who has committed the relevant action, in
particular found out the lost thing or provided the person who announced
the issue of the reward with the necessary information.
2. The obligation to pay a reward shall originate, provided that the
promise of a reward makes it possible to ascertain the person who has
given the promise. The person who has responded to the promise shall have
the right to demand the written confirmation of this promise and shall
bear the risk of consequences of the non-presentation of this demand, if
it transpires that in actual fact the announcement of the reward has not
been made by the person indicated in it.
3. If the public promise of a reward has not indicated its amount,
the latter shall be defined by agreement with the person who has promised
the reward and by a court of law in case of a dispute.
4. The obligation to pay a reward shall arise, regardless of the
fact whether an appropriate action in connection with the announcement or
beside it.
5. In cases where the action indicated in the announcement has been
committed by several persons, the right to the receipt of a reward shall
be acquired by those of them who made the relevant action first.
If the action indicated in the announcement has been committed by
two or more persons and it is impossible to ascertain who of them has
made the action first, and also in case where the action has been
committed by two or more persons simultaneously, the reward shall be
divided between them in equal shares or in a different amount, envisaged
by the agreement between them.
6. Unless the announcement of a reward provides for otherwise and
unless the contrary follows from the character of the action, indicated
in it, the compliance of the performed action with the requirements of
the announcement shall be determined by the person who has promised the
reward in public and by a court of law in case of a dispute.
Article 1056. The Revocation of the Public Promise of a Reward
1. A person who has announced in public the payment of a reward
shall have the right in the same form the repudiate his promise, except
for the cases where the announcement itself provides for the
inadmissibility of repudiation or the latter follows from it or fixes a
definite date for the performance of the action for which the reward has
been promised, or where by the time of the announcement about the
repudiation one or several responded persons had already committed the
action indicated in the announcement.
2. The revocation of the public promise of a reward shall not
release the person who has announced the reward from the reimbursement of
the responded persons' expenses, incurred by them in connection with the
performance of the action, indicated in the announcement, within the
limits of the reward referred to in the announcement.
Chapter 57. Public Competition
Article 1057. The Organization of a Public Competition
1. A person who has announced in public the payment of a pecuniary
remuneration or the issue of a different reward (the payment of a reward)
for the best performance of work or the achievement of other results
(public competition) shall pay (issue) the stipulated reward to the
person who has been recognized as its winner in keeping with the terms of
holding the competition.
2. A public competition shall be aimed at the attainment of some
socially useful objectives.
3. A public competition may be open, when the offer of the
competition organizer for the participation in it is addressed to all
those who desire to take part by announcing in the press or other mass
media, or may be closed, when the offer for the participation in the
competition is sent to a definite range of persons at the option of the
competition organizer.
An open competition may be stipulated by the preliminary
qualification of its participants at a time when the competition
organizer holds a preliminary selection of the persons who desire to take
part in it.
4. An announcement of a public competition shall contain at least
the conditions providing for the substance of an assignment, the criteria
and procedure for the appraisal of the results of work or any other
achievements, the place, period of time and procedure for their
presentation, the amount and form of rewards, and also the procedure and
date of announcing the results of the competition.
5. The rules, provided for by this Chapter, shall be applicable to
public competitions containing the obligation of concluding with the
competition winner a contract inasmuch as Articles 447-449 of this Code
do not stipulate otherwise.
Article 1058. Changes in the Terms of a Public Competition and Its
Revocation
1. A person who has announced a public competition shall have the
right to change its terms or to revoke it only during the first half of
the period of time fixed for the presentation of works.
2. A notice about changes in the terms of the competition or its
revocation shall be made by the same method of announcing the
competition.
3. In cases of changes in the terms of the competition or its
revocation the person who has announced the competition shall have the
right to reimburse the expenses incurred by any person who has performed
the work, envisaged in the announcement before he knew or should have
known about the changes on the terms of the competition and about its
revocation.
A person who has announced the competition shall be released from
the obligation of reimbursing the expenses, if he proves that the work
has been fulfilled not in connection with the competition, in particular
before the announcement of the competition or when obviously the work has
not complied with the competition terms.
4. If the requirements, referred to in Items 1 or 2 of this Article
have been violated in case of changing the terms of the competition or of
its revocation, the person who has announced the competition shall be
obliged to pay the reward to those who fulfilled the work that satisfies
the terms indicated in the announcement.
Article 1059. The Decision on the Payment of a Reward
1. A decision on the payment of a reward shall be passed and
communicated to the public competition participants in the procedure and
in the period of time fixed by the announcement of the competition.
2. If the results, referred to in the announcement, have been
achieved in the work performed jointly by two or more persons, the reward
shall be distributed in keeping with the agreement reached by them. If
such agreement is not achieved, the procedure for the distribution of the
reward shall be determined by a court of law.
Article 1060. The Use of the Works of Science, Literature and Art
Awarded with Rewards
If the creation of a work of science, literature or art makes up the
subject of a public competition and unless its terms provide for
otherwise, the person who has announced the public competition shall
acquire the preferential right to he conclusion with the author of the
rewarded work of a contract for the use of the work and to the reception
of relevant remuneration for it.
Article 1061. The Return of the Works to the Participants in a
Public Competition
A person who has announced the public competition shall be obliged
to return to the competition participants the works not awarded with
rewards, unless otherwise stipulated by the announcement of he
competition and unless the contrary follows from the nature of the
performed work.
Chapter 58. Gaming and Betting
Article 1062. Claims Associated with the Organization of Games and
Bets and the Participation in Them
The claims of individuals and legal entities, associated with the
organization of games and bets or the participation in them, shall not be
subject to judicial remedy with the exception of the claims of the
persons who have taken part in games or bets under the influence of the
fraud, violence, threat or malicious agreement of their representative
with the organizer of games or bets, and also of the claims, referred to
in Item 5 of Article 1063 of this Code.
Article 1063. The Holding of Lotteries, Totalizators and Other Games
by State and Municipal Bodies or With Their Permit
1. Relations between the organizers of lotteries, totalizators
(mutual bets) and of other games based on risk - the Russian Federation,
the subjects of the Russian Federation, the municipal bodies, the persons
and for lotteries, by legal entities,
who received a right to conduct such games in the procedure
established by a law
from the authorized state and municipal body - and
the participants in games shall be based on the agreement.
2. In cases provided for by the rules for the organization of games,
the agreement between the organizer and the participant in games shall be
formalized by the issue of a lottery ticket, receipt or any other
document, and also otherwise.
3. The offer on the conclusion of an agreement, stipulated by Item 1
of this Article, shall include the clauses on the period of holding games
and the procedure for determining prizes and their amounts.
In case where the organizer of games refuses to hold them within the
fixed period of time the participants in games shall have the right to
demand that their organizer should recover the real damage sustained as a
result of the revocation of games or of the postponement of the date of
the real damage.
4. Persons who in keeping with the terms of holding a lottery,
totalizator or other games are recognized as those who have won them
shall be paid out by the organizer of games the prizes in the amounts
stipulated by the terms of their holding (in monetary terms or in kind)
and on due date, and if the date is not indicated in these terms - within
10 days since the time of determining the results of the games or within another
term established by a law.
5. In case of default by the organizer of games on the obligation,
indicated in Item 4 of this Article, the participant who has won in the
lottery or totalizator or any other games shall have the right to demand
that the organizer of games should pay off the prize and also to
reimburse the losses caused by the breach of the contract by the
organizer.
Chapter 59. Liabilities for Damage
§ 1. General Provisions in the Redress of Injury
Article 1064. General Grounds for Liability for Damage
1. The injury inflicted on the personality or property of an
individual, and also the damage done to the property of a legal entity
shall be subject to full compensation by the person who inflicted the
damage.
The obligation to redress the injury may be imposed by the law on
the person who is not the inflictor of injury.
The law or the contract may institute the obligation of the
inflictor of injury to repay to the victims compensation over and above
the compensation of damage.
2. A person who has caused harm shall be released from the redress
of injury, if he proves that injury was caused no through his fault. The
law may also provide for the redress of injury in the absence of the
fault of the inflictor of injury.
3. Injury inflicted by lawful actions shall be subject to redress in
cases, provided for by the law.
Redress of injury may be rejected, if injury has been caused at the
request or with the consent of the insured person and unless the actions
of the inflictor of injury violate the moral principles of the society.
Article 1065. Prevention of the Infliction of Injury
1. The damage of the infliction of injury in future may be a ground
for the action for the prohibition of the activity that creates such
danger.
2. If the injury caused is the consequence of the operation of an
enterprise, structure or of any other production activity which continues
to inflict injuries or threatens with a new damage, the court of law
shall have the right to bound the defendant to suspend or stop the
relevant activity in addition to the redress of injury.
The court may dismiss the action for the suspension or
discontinuance of the relevant activity only in case, if its suspension
or discontinuance contradicts public interests. The dismissal of the
action for the suspension or discontinuance of such activity shall not
deprive the insured party of the right to the redress of the injury
inflicted by this activity.
Article 1066. The Infliction of Injury in the State of Justifiable
Defence
Injury inflicted in the state of justifiable defence, unless the
requirements of justifiable defence are exceeded, shall not be subject to
redress.
Article 1067. The Infliction of Injury in the State of Absolute
Necessity
Injury inflicted in the state of absolute necessity, that is for the
removal of danger threatening the inflictor of injury himself or other
persons, if this danger could not be eliminated under the given
circumstances with other means, shall be redressed by the person who has
caused this injury.
Taking into account the circumstances under which such injury was
inflicted, the court of law may impose the obligation of its redress on a
third person, in whose interest the inflictor of injury acted, or release
this third person and the inflictor of injury from the redress of this
injury in full or in part.
Article 1068. The Liability of a Legal Entity or an Individual for
Injury Inflicted by the Employee
1. A legal entity or an individual shall redress the injury
inflicted by the employee during the performance of labour (official)
duties.
In terms of the rules, provided for by this Chapter, individuals
performing their work on the basis of a labour contract, and also
individuals performing their work under a civil-law contract shall be
recognized as employees, if in this case they acted or should have acted
on the assignment of the relevant legal entity or individual and under
their control over the safe conduct of works.
2. Economic partnerships and procedure cooperatives shall refresh
the injury inflicted by their participants (members) during the
performance by them of the business, production or any other activity of
the partnership or cooperative.
Article 1069. Liability for the Injury Inflicted by State and Local
Self-government Bodies, and Also by Their Officials
The injury inflicted on an individual or a legal entity as a result
of unlawful actions (inaction) of state and local self-government bodies
or of their officials, including as a result of the issuance of an act of
a state or self-government body inconsistent with the law or any other
legal act, shall be subject to redress. The injury shall be redressed at
the expense of the state treasury of the Russian Federation, the
respective subject of the Russian Federation or the respective municipal
body, as the case may be.
Article 1070. Liability for the Injury Inflicted by the Illegal
Actions of the Bodies of Inquest, Preliminary
Investigation, the Procurator's Office and the Court
of Law
1. The injury inflicted on an individual as a result of illegal
conviction, illegal institution of proceedings on criminal charges,
illegal application of remand in custody as a measure of suppression or
of a written understanding not to leave one's place of residence, illegal
imposition of an administrative penalty in the form of arrest or
corrective labour shall be redressed in full at the expense of the state
treasury of the Russian Federation and in cases, stipulated by law, at
the expense of the state treasury of the respective subject of the
Russian Federation or of the respective municipal body, regardless of the
fault of the officials of bodies of inquest, preliminary investigation,
procurator's offices or courts of law in the procedure established by
law.
2. Injury inflicted on an individual or a legal entity as a result
of the illegal activity of bodies of inquest, preliminary investigation,
procurator's offices, which has not entailed the consequences, specified
by Item 1 of this Article, shall be redressed on the grounds and in the
procedure, provided for by Article 1069 of this Code. Injury inflicted
during the administration of justice shall be redressed in cases, if the
fault of a judge has been established by the court's judgement that has
entered into legal force.
Article 1071. Bodies and Persons Acting on Behalf of the State
Treasury in Case of Redress of Injury at Its Expense
I cases where in keeping with this Code or other laws in injury
inflicted is subject to redress at the expense of state treasury of the
Russian Federation, that of the subject of the Russian Federation or the
municipal formation, the state treasury shall be represented by the
relevant finance bodies, unless in accordance with Item 3 of Article 125
of this Code this duty is imposed on a different body, legal entity or an
individual.
Article 1072. Redress of Injury by the Person Who Has Insured His
Liability
A legal entity or an individual who has insured their liability by
way of voluntary or obligatory insurance in favour of the injured party
(Article 931 and Item 1 of Article 935), when insurance compensation is
not sufficient to redress the inflicted injury, shall compensate for the
difference between the insurance compensation and the actual injury.
Article 1073. Liability for the Injury Inflicted by Minors at the
Age Before 14 Years
1. Parents (adopters) or guardians shall be liable for the injury
inflicted by minors who have not reached 14 years of age, unless they
prove that the injury has been inflicted not through their fault.
2. If a minor who in need of guardianship was in the respective
educational or medical institution, social protection establishment or in
any other similar institution, which by dint of law is its guardian
(Article 35), this institution shall be obliged to redress the injury
inflicted by the minor, unless it proves that this injury has been
inflicted not through the institution's fault.
3. If a minor has inflicted injury at a time when he was under the
supervision of the educational, medical or other institution which is
duty-bound to exercise supervision over the minor or of the person who
has exercised supervision on the basis of a contract, this institution or
this person shall be liable for the injury, unless they prove that the
injury has been inflicted not through their fault during the exercise of
supervision.
4. The obligation of parents (adopters), guardians, educational,
medical and other institutions in the redress of the injury inflicted by
a minor shall not be discontinued with the attainment by the minor of
majority or with the receipt by him of property sufficient to redress the
injury.
If parents (adopters), guardians or other private persons, referred
to in Item 3 of this Article, have died or do not have sufficient
pecuniary means to redress the injury inflicted on the life or health of
the injured person, and the inflictor of injury who has acquired a legal
capacity in full possesses such means, the court of law shall have the
right to take a decision on the redress of the injury in full or in part
at the expense of the inflictor of the injury by taking into account the
property status of the injured person and the inflictor of the injury,
and also other circumstances.
Article 1074. Liability for the Injury Inflicted by Minors at the
Age From 14 to 18 Years
1. Minors at the age from 14 to 18 years shall bear liability for
the inflicted injury on general grounds.
2. In case where a minor at the age from 14 to 18 years has no
income or other property sufficient to redress injury the latter shall be
redressed in full or in the lacking part by his parents (adopters) or the
guardian, unless they prove that the injury has been inflicted not
through their fault.
If a minor at the age from 14 to 18 years who is need of custody was
placed in the respective educational or medical establishment, social
protection institution or any other similar institution, which by dint of
law is his guardian (Article 35), this institution shall be obliged to
redress the injury in full or in the lacking part, unless it proves that
the injury has been inflicted not through its fault.
3. The obligation of parents (adopters), the guardian and the
respective institution to redress the injury inflicted by a minor at the
age from 14 to 18 years shall cease upon the attainment of majority by
the inflictor of injury in cases where before the attainment of majority
he acquired income or other property, which are sufficient to redress the
injury, or where he acquired legal capacity before the attainment of
majority.
Article 1075. Liability of Parents Deprived in Parental Rights for
the Injury Inflicted by Minors
The court of law may impose liability for the injury inflicted by a
minor on his parent during three years after the parent was deprived of
his parental rights, if the child's behaviour that entailed the
infliction of injury had been the result of the improper exercise of
parental duties.
Article 1076. Liability for the Injury Inflicted by the Individual
Recognized as Legally Unfit
1. The injury inflicted by the individual recognized as legally
unfit shall be redressed by his guardian or the organization which is
duty-bound to exercise supervision over him, unless they prove that the
injury has been inflicted not through their fault.
2. The obligation of the guardian or the organization which is
duty-bound to exercise supervision over the redress of the injury
inflicted by the individual, recognized as legally unfit, shall not cease
in case of the subsequent recognition of him as having a legal capacity.
3. If the guardian has died or has not sufficient pecuniary means to
redress the injury inflicted on the life or health of the injured person,
and the inflictor of the injury possesses such means, the court of law
shall have the right to take a decision on the redress of the injury in
full or in part at the expense of the inflictor of the injury by taking
into account the property status of the injured party and the inflictor
of the injury.
Article 1077. Liability for the Injury Inflicted by the Individual
Recognized as Having Limited Legal Capacity
Injury inflicted by the individual with limited legal capacity in
consequence of the abuse of alcoholic drinks or narcotics shall be
redressed by the inflictor of injury himself.
Article 1078. Liability for the Injury Inflicted by the Individual
Who Is Incapable of Understanding the Significance of
His Actions
1. An individual with a legal capacity or a minor at the age from 14
to 18 years who has inflicted injury in a state when he could not
understand the significance of his actions or guide them shall not be
liable for the injury inflicted by him.
If injury is inflicted on the life or health of the injured person,
the court of law may impose the duty of redressing the injury in full or
in part on the inflictor of injury by taking into account the property
status of the injured party and the inflictor of injury, and also other
circumstances.
2. The inflictor of injury shall not be released from liability, if
he has brought himself in a state in which he could not understand the
significance of his actions or guide them by the abuse of alcoholic
drinks, narcotics or by any other method.
3. If injury is inflicted by the person who could not understand the
significance of his actions or guide them in consequence of his psychic
disorder, the court of law may impose the duty in redressing injury on
the above-bodied spouse, parents, and children of age who have known
about the psychic disorder of the inflictor of injury but failed to raise
the question about the recognition of this person as legally unfit.
Article 1079. Liability for the Injury Inflicted by the Activity
with Increased Hazard for People Around
1. Legal entities and individuals whose activity is associated with
increased hazard for people around (the use of transport vehicles,
mechanisms, high voltage electric power, atomic power, explosives, potent
poisons, etc.; building and other related activity, etc.) shall be
obliged to redress the injury inflicted by a source of special danger,
unless they prove that injury has been inflicted in consequence of force
majeure or the intent of the injured person. The owner of a source of
special danger may be released by the court from liability in full or in
part also on the grounds, provided for by Items 2 and 3 of Article 1083
of this Code.
The obligation of redressing injury shall be imposed on the legal
entity or the individual who possess the source of special danger by
right of ownership, the right of economic or operative management or on
any other lawful ground (by right of lease, by procuration for the right
to drive a transport vehicle, by decision of the corresponding body on
the transfer of the source of special danger, etc.).
2. The owner of a source of special danger shall not be liable for
the injury inflicted by this source, if he proves that the source has
retired from his possession as a result of the illegal actions of other
persons. In such cases liability for the injury inflicted by the source
of special danger shall be borne by the persons who have acquired the
source contrary to law. If the owner of the source of special danger is
guilty of the withdrawal of this source from his possession contrary to
law, liability may be imposed both the owner and on the person who has
acquired the source of special danger contrary to law.
3. The owners of sources of special danger shall bear joint
liability for the injury inflicted as a result of the interaction of
these sources (the collusion of transport vehicles, etc.) to third
persons on the grounds, provided for by Item 1 of this Article.
Injury inflicted as a result of the interaction of the sources of
special danger to their owners shall be redressed on general grounds
(Article 1064).
Article 1080. Liability for the Injury Jointly Inflicted by Persons
Persons who jointly inflicted injury shall be jointly liable to the
injured party.
In response of the application of the injured person and in his
interests the court of law shall have the right to impose liability on
the persons who jointly inflicted injury in shares by estimating them
with reference to the rules, provided for by Item 2 of Article 1081 of
this Code.
Article 1081. The Right of Recourse to the Person Who Has Inflicted
Injury
1. A person who has redressed the injury inflicted by another person
(the employee who discharges official or other labour duties, the person
who drives a transport vehicle, etc.) shall have the right to recourse to
this person in the amount of the paid compensation, unless the law
establishes a different amount of compensation.
2. The inflictor of injury who has redressed the injury jointly with
others shall have the right to demand from each inflictor of injury the
share of the compensation paid to the injured party in the amount that
corresponds to the degree of guilt of this inflictor of injury. If it is
impossible to determine the degree of guilt, the shares shall be
recognized as equal.
3. The Russian Federation, the respective subject of the Russian
Federation or the municipal formation shall have the right of recourse to
the official of the body of inquest, preliminary investigation,
procurator's office or the court of law in case of redress of the injury
inflicted by them (Item 1 of Article 1070), if his guilt has been
established by the court's judgement that has entered in legal force.
4. Persons who have redressed injury on the grounds, referred to in
Articles 1073-1076 of this Code shall have no right of recourse to the
inflictor of injury.
Article 1082. Methods of Redressing Injury
While satisfying the claim for redressing injury, the court of law,
in keeping with the circumstances of the case, shall bind the person
responsible for the infliction of injury to redress injury in kind (to
present a thing of the same sort and quality, to repair a damaged thing,
etc.) or to recompense for the losses caused (Item 2 of Article 15).
Article 1083. The Registration of the Fault of the Injured Party and
the Property Status of the Person Who Has Inflicted
Injury
1. Injury inflicted due to the intent of the injured party shall not
be redressed.
2. If the gross negligence of the injured party himself has
facilitated the emergence or increase of injury, the amount of
compensation shall be reduced depending on the degree of the guilt of the
injured party and the inflictor of injury.
In the event of gross negligence on the part of the injured person
and in the absence of guilt of the inflictor of injury in cases where his
liability commences regardless of his guilt, the amount of compensation
shall be reduced or the redress of injury may be rejected, unless the law
provides for otherwise. If injury is inflicted on the life or health of
the individual, the refusal to redress injury shall not be allowed.
The fault of the injured party shall not be taken into account in
case of the reimbursement of additional expenses (Item 1 of Article
1085), of the redress of injury in connection with the death of the
breadwinner (Article 1089), and also in case of the compensation for the
expenses on the burial (Article 1094).
3. The court of law may reduce the amount of compensation for the
injury inflicted by an individual with due account of his property
standing, with the exception of cases where injury has been inflicted by
deliberate actions.
§ 2. The Redress of the Injury Inflicted on the Life or Health
of an Individual
Article 1084. The Redress of the Injury Inflicted on the Life or
Health of an Individual During the Discharge of
Contractual or Other Obligations
Injury inflicted on the life or health of an individual during the
discharge of contractual obligations, and also during the discharge of
the military duty, during the service in the militia and during the
discharge of other appropriate duties shall be redressed according to the
rules, provided for by this Chapter, unless the law or the contract
provide for a higher degree of responsibility.
Article 1085. The Extent and Character of the Redress of Injury
Inflicted on the Person's Health
1. In case of maiming an individual or of any other injury to his
health compensation shall be extended to the earnings (income) which has
been lost by the injured person and which he had or could definitely
have, and also to the expenses incurred by injury to his health,
including the expenses on medical treatment, additional nutrition, the
acquisition of medicines, prosthesis, care by other people, the
sanatoria and spa treatment, the acquisition of special transport
vehicles, retraining, if it is found out that the injured person is in
need of aid of these kinds and care and has not the right to receive them
free of charge.
2. In estimating the lost earnings (income) the disability pension,
awarded to the injured person in connection with mutilation or any other
injury to his health, and also other pensions, benefits and other similar
payments, awarded both before and after the infliction of injury on his
health, shall not be taken into account and shall not involve a reduction
of the amount of the compensation for the injury (shall not be counted
towards the redress of the injury). The earnings (income), received by
the injured party after the impairment of his health, shall not be
counted towards the redress of injury.
3. The extent and amount of the redress of injury due to the injured
party in keeping with this Article may be increased by the law or the
agreement.
Article 1086. The Estimation of the Earnings (Income) Lost as a
Result of the Impairment of Health
1. The amount of the earnings (income) lost by the victim and
subject to compensation shall be determined in percentage of the average
monthly earnings (income) before maiming or any other impairment of
health or before the loss of the capacity for work, which correspond to
the degree of the loss by the victim of his professional ability to work,
and in the absence of professional ability to work - to the degree of the
loss of general capacity for work.
2. The lost earnings (income) of the victim shall include all types
of taxable payment for his labour under labour and civil-law contracts in
the place of his main work and in case of holding more than one office.
Settled apart shall be lump-sum payments, in particular compensation for
the non-used leave of absence and the retirement benefit in case of
dismissal. The paid benefit shall be reckoned over the period of temporal
physical disability or of maternity leave. Income from business activity,
and also the author's fees shall be included in the lost earnings, with
income from business being included on the basis of the data supplied by
a tax inspection team.
All types of earnings (income) shall be reckoned in the amounts
charged before tax.
3. The average monthly earnings (income) of the injured person shall
be reckoned by dividing the total sum of his earnings (income) for the 12
months of work that preceded the impairment of his health by 12. If the
victim had worked for less than 12 months by the time of the infliction
of injury, the average monthly earnings (income) shall be reckoned by
dividing the total sum of earnings (income) for the actually worked
number of months that preceded the impairment of his health by the number
of these months.
The months during which he has worked not in full measure shall be
replaced at the wish of the victim by the preceding months in which he
worked in full measure or shall be excluded from the counting if it is
impossible to replace them.
4. In case where the victim of injury account shall be taken at his
wish of his earnings before the dismissal or of the usual amount of
labour remuneration for the worker of his qualification in the given
locality, but not less than
the value of the subsistence level of the employable population as
a whole in the Russian Federation established in accordance with law.
5. If stable changes improving the property status of the victim (a
rise in the wage according to the post held, the transfer to a high-paid
job, employment after the graduation from an educational establishment
with full-time instruction and in other cases when changes are stable and
when it is possible to alter the payment for the victim's labour) took
place before the maiming or other impairment of his health, account shall
only betaken of the earnings (income) which he received or should have
received after the appropriate change in case of estimating his average
earnings (income).
Article 1087. The Redress of Injury in Case of Impairing the Health
of the Person Who Has Not Reached Majority
1. In case of maiming or any other injury inflicted on the health of
a minor who has not reached 14 years of age and who has not got earnings
(income), the person responsible for the inflicted injury shall be
obliged to reimburse the expenses incurred by the impairment of his
health.
2. Upon the attainment by a minor of 14 years of age, and also in
the event of the infliction of injury on a minor from 14 to 18 years of
age, who has not got earnings (income), the person responsible for the
inflicted injury shall be obliged to redress the injury caused by the
loss of, or decreased in, capacity for work in addition to the
reimbursement of the expenses incurred by the impairment of his health by
proceeding from the value of the subsistence level of the employable
population as a whole in the Russian Federation established in accordance
with law.
3. If by the time of the impairment of his health a minor had
earnings, the injury shall be redressed on the basis of their amount, but
not less than the value of the subsistence level of the employable
population as a whole in the Russian Federation established in accordance
with law.
4. After the minor begins his labour activity after the injury was
inflicted on his health, he shall have the right to demand an increased
amount of compensation for the injury on the basis of his earnings, but
not less than the amount of labour remuneration, fixed according to the
post he occupies or the earnings of the worker of the same qualification
in the place of his work.
Article 1088. The Redress of the Injury Inflicted on the Persons Who
Have Suffered Damage as a Result of the Breadwinner's
Death
1. In the event of the death of the victim (breadwinner) the right
to the redress of injury shall belong to:
the non-able-bodied persons who were dependants of the deceased
person or who had by time of his death the right to receive maintenance
from him;
the infant of the deceased person which was born after his death;
one of the parents, the spouse or any other family member,
regardless of his ability to work, who does not work and take the care
for his dependent children, grandchildren, brothers and sisters who have
not reached 14 years of age or although have reached the said age but
are in need of care by other people because of poor health according to
the finding of medical bodies;
the persons who were dependants of the deceased person and who have
become non-able-bodied during five years after his death.
One of the parents, the spouse or any other family member, who does
not work and takes care of the children, grandchildren, brothers and
sisters of the deceased person and who has become non-able-bodied during
the period of this case, shall retain the right to the referred of injury
after the end of the care for these persons.
2. Injury shall be redressed for the following persons:
minors - until the attainment of 18 years of age;
students of over 18 years of age - until the graduation of
educational establishments with full-time instruction and at least until
23 years of age;
women of over 55 years of age and men of over 60 years of age;
invalids - for the time of disability;
one of the parents, the spouse or another family member who take
care of his dependent children, grandchildren, brothers and sisters -
until the attainment by them of 14 years of age or the change in the
state of their health.
Article 1089. The Amount of the Redress of Injury Sustained in Case
of the Breadwinner's Death
1. Injury shall be redressed for the persons who have the right to
the redress of injury in connection with the breadwinner's death in the
amount of that share of the earnings (income) of the deceased person,
determined according to the rules of Article 1086 of this Code, which
they received or had the right to receive for his maintenance during his
lifetime. In estimating compensation for the injury inflicted on these
persons it is necessary to include in the incomes on the deceased person
his pension, life maintenance and other such payments on a par with his
earnings (income).
2. In estimating the amount of compensation for injury the pensions
awarded to the persons in connection with the breadwinner's death, and
also other pensions awarded both before and after the breadwinner's death
and the earnings (income) and the scholarship received by these persons
shall not be counted towards the compensation for their injury.
3. The amount of compensation fixed for each person who is entitled
to the redress of injury in connection with the breadwinner's death shall
not be subject to further recalculation, except for the cases of:
the birth of a baby after the breadwinner's death;
the awarding of compensation payments to the persons who take care
of the children, grandchildren, brothers and sisters of the deceased
breadwinner or their discontinuance.
The law or the agreement may increase the amount of compensation.
Article 1090. Subsequent Changes in the Amount of Compensation for
Injury
1. The victim who has lost his capacity for work partially shall
have the right to demand at any time that the person entrusted with the
duty of redressing injury that he should increase the amount of
compensation accordingly, if the victim's ability to work has decreased
afterwards due to the impairment of his health as compared with his
ability to work by the time of awarding to him the compensation for the
injury.
2. A person who is entrusted with the duty of redressing the injury
inflicted on the victim's health shall have the right to demand a
corresponding reduction of the amount of compensation, if the victim's
ability to work has arisen as compared with that he had by the time of
awarding to him the compensation for the injury.
3. The victim shall have the right to demand an increased amount of
the redress of injury, if the person charged with the duty of redressing
injury has improved his property standing, while the amount of
compensation has been reduced in accordance with Item 3 of Article 1083
of this Code.
4. The court of law may on the demand of the person who has
inflicted injury reduce the amount of compensation for the injury, if his
property standing has deteriorated in connection of disability or the
attainment of the pensionable age as compared with his standing at the
time of awarding compensation for the injury, except for the cases where
injury was inflicted by deliberate actions.
Article 1091. Increase of Amount of Compensation of Harm in
Connection with Increased Cost of Living
Amounts to be paid to citizens for compensation of harm caused to
the life or health of a victim shall be subject, in the event of an
increase in the cost of living, to indexation in the procedure
established by law (Article 318).
Article 1092. Payments for the Redress of Injury
1. The redress of the injury caused by the decrease in the capacity
for work or by the victim's death shall be effected by monthly payments.
In the presence of valid reasons the court of law may, with due
account of the possibilities of the inflictor of injury and on the demand
of the individual who has the right to the redress of injury, adjudge to
him the due payments in the lump, but for not more than three years.
2. Sums of money intended for the reimbursement of additional
expenses (Item 1 of Article 1085) may be adjudged for the future within
the time-limits, defined on the basis of a medical expert examination,
and also in case of necessity for the preliminary payment for the
appropriate service and property, including for the acquisition of a pass
to a sanatorium or holding home, the payment of fare, the payment for
special transport vehicles.
Article 1093. The Redress of Injury in Case of the Termination of a
Legal Entity
1. In the event of the reorganization of the legal entity recognized
in the statutory manner as responsible for the injury inflicted on human
life or health, the obligation to make appropriate payment shall be borne
by its legal successor. Claims for the redress of injury shall be made to
this successor.
2. In the event of the liquidation of the legal entity, recognized
in the statutory manner as responsible for the injury inflicted on human
life or health, the appropriate payments shall be capitalized for their
payment to the victim according to the rules, established by the law or
other legal acts.
The law or other legal acts may also provide for other cases in
which payments may be capitalized.
Article 1094. The Reimbursement of Expenses on Burial
Persons responsible for the injury caused by the death of the victim
shall be obliged to reimburse the necessary expenses on burial to the
person who incurred these expenses.
The burial benefit received by private persons who incurred these
expenses shall not be counted towards the compensation for the injury.
§ 3. The Redress of the Injury Inflicted by Defects in Goods,
Works or Services
Article 1095. The Grounds for the Redress of Injury Inflicted by
Defects in Goods, Works and Services
Injury inflicted on the life, health or assets of an individual or
damage done to the property of a legal entity in consequence of
constructive, recipe or other defects of goods, works or services, and
also in consequence of untrustworthy or insufficient information about
goods (works, services) shall be subject to redress by the seller or the
manufacturer of goods, by the person who has fulfilled the work or
rendered the service (executor), regardless of their fault and of the
fact whether the victim has been in contractual relations with them or
not.
The rules, provided for by this Article, shall be applied only in
cases of the acquisition of goods (performance of works or rendering of
services) for purposes of consumption and not for use in business
activity.
Article 1096. Persons Responsible for the Injury Inflicted Owing to
Defects in Goods, Works and Services
1. Injury inflicted owing to defects in goods shall be subject to
redress at the option of the victim by the seller or the manufacturer of
goods.
2. Injury inflicted owing to defects in works and services shall be
subject to redress by the person who has performed the work or rendered
the service (executor).
3. Injury Inflicted owing to the non-submission of full and
trustworthy information about goods (works, services) shall be subject to
redress by the persons, referred to in Items 1 and 2 of this Article.
Article 1097. The Time-limits of the Redress of the Injury Inflicted
as a Result of Defects in Goods, Works or Services
1. Injury inflicted owing to defects in goods, works or services
shall be subject to redress, if it has appeared during
the established period of suitability or service time of goods (works, services), and if the
working life has not been established, during 10 years since the
production of goods (works, services).
2. Regardless of the time of infliction, harm shall be subject to
compensation if:
in violation of the requirements of a law, a period of suitability
or a service time was not established;
the person to whom the goods were sold, for whom the work was done,
or to whom the services were rendered was not warned of the necessary
actions upon the expiration of the period of suitability or the service
time and the possibility consequences in case of failure to take these
actions or who was not provided with the full and veracious information
about the goods (or work or service).
Article 1098. The Grounds for the Release from Liability for the
Injury Inflicted Owing to Defects in Goods, Works or
Services
A seller or a manufactures of goods, an executor of a work or
service shall be absolved from liability in case if he proves that injury
took place owing to force majeure or the contravention by the consumer of
the rules for using goods and by the results of the work, service or of
their storage.
§ 4. Compensation for the Moral Damage
Article 1099. General Provisions
1. The grounds and the amount of compensation for the moral damage
done to an individual shall be determined by the rules, provided for by
this Chapter and Article 151 of this Code.
2. The moral damage inflicted by actions (inaction) that infringe
the property rights of an individual shall be subject to compensation in
cases, provided for by the law.
3. The moral damage shall be compensated regardless of the property
damage subject to compensation.
Article 1100. The Grounds for the Compensation of the Moral Damage
The moral damage shall be compensated regardless of the guilt of the
inflictor of damage in cases where:
injury has been inflicted the life or health of an individual by a
source of special danger;
damage has been done to an individual as a result of his illegal
conviction, the illegal institution of proceedings against him, the
illegal application of remand in custody as a measure of suppression or
of a written understanding not to leave his place of residence, the
illegal imposition of the administrative penalty in the form of arrest or
corrective labour;
damage has been inflicted by the spread of information denigrating
the honour, dignity and business standing;
in other cases provided for by the law.
Article 1101. The Method and Amount of the Compensation for the
Moral Damage
1. The moral damage shall be compensated in monetary form.
2. The amount of the compensation for the moral damage shall be
determined by a court of law depending on the nature of physical and
moral suffering caused to the victim, and also on the degree of guilt of
the inflictor of damage in cases when guilt is a ground for the redress
of injury. In estimating the amount of the compensation it is necessary
to take into account the requirements of reasonable and justice.
The nature of physical and moral suffering shall be assessed by the
court with due account of the actual circumstances under which the moral
damage was inflicted and of the victim's individual features.
Chapter 60. Obligations Due to Unjust Enrichment
Article 1102. The Obligation to Return Unjust Enrichment
1. A person who has acquired or saved property (purchaser) without
the grounds, established by the law, other legal acts or the transaction,
at the expense of another person (victim) shall be obliged to return to
the latter the property acquired or saved unjustly (unjust enrichment),
except for the cases, provided for by Article 1109 of this Code.
2. The rules, provided for by this Chapter, shall be applicable
regardless of the fact whether unjust enrichment resulted from the
behaviour of the purchaser of property, the victim himself, third persons
or took place regardless of their will.
Article 1103. The Correlation of Claims for the Return of Unjust
Enrichment With Other Claims for the Protection of
Civil Rights
Inasmuch as the contrary is not established by this Code, other laws
or other legal acts and does not follow from the essence of corresponding
relations, the rules, envisaged by this Chapter, shall be applied to the
following claims:
1) for the return of the executed in an invalid transaction;
2) for the reclamation of property by its owner from the illegal
possession of other people;
3) of one party in the obligation to the other party for the return
of the executed in connection with this circumstance;
4) for the redress of injury, including that inflicted by the
dishonest behaviour of the enriched person.
Article 1104. The Return of Unjust Enrichment in Kind
1. Assets comprising the unjust enrichment of the purchaser shall be
returned to the victim in kind.
2. The purchaser shall be liable to the victim for any fortuitous
shortage or deterioration of the groundlessly acquired or saved property,
which have taken place after he knew or should have known about unjust
enrichment. Until this time he shall be answerable for intent or gross
negligence.
Article 1105. Compensation for the Value of Unjust Enrichment
1. If it is impossible to return the groundlessly acquired or saved
property in kind, the purchaser shall compensate to the victim for the
actual value of this property at the time of its acquisition, and also
for the losses, caused by the subsequent change in the value of property,
if the purchaser has not reimbursed its value at once after he has known
about unjust enrichment.
2. A person who groundlessly used the property of other people for
the time being without his intention to acquire it or used the services
of other people shall recompense to the victim all that he has saved
owing to such use at the price existing at the time when this use ended
and in the place where the use took place.
Article 1106. The Consequences of the Groundless Transfer of the
Right to Another Person
A person who has transferred claims by way of cession or the right
belonging to him in other way to another person on the basis of a
non-existent or invalid obligation shall have the right to demand the
restoration of the former position, including the return to him of the
documents certifying the transferred right.
Article 1107. The Reimbursement of Non-received Income to the Victim
1. A person who has received or saved property ungroundlessly shall
be obliged to return to the victim or to reimburse all his incomes which
he derived or should have derived from this property since the time when
he knew or should have known about unjust enrichment.
2. Interest for the use of pecuriary means of other people (Article
395) shall be subject to addition for the sum of unjust pecuniary
enrichment since the time when the purchaser knew or should have known
about the groundless receipt or saving of monetary means.
Article 1108. The Reimbursement of Expenses on Property Subject to
Return
In case of the return of the property groundlessly received or saved
(Article 1104) or in case of the reimbursement of its value (Article
1105) the purchaser shall have the right to demand that the victim should
compensate for the necessary expenses on the maintenance and upkeep of
property since the time from which he is bound to receive income (Article
1106) with the offset of the received benefits. The right to compensation
shall be lost in case when the purchaser deliberately retained property
subject to return.
Article 1109. Unjust Enrichment Not Subject to Return
The following property shall not be subject to return as unjust
enrichment:
1) property transferred for the execution of the obligation before
the onset of the time for execution, unless the obligation provides for
otherwise;
2) property transferred for the execution of the obligation upon the
expiry of the period of limitation;
3) wages and salaries and payment equated therewith, pensions,
benefits, scholarships, the redress of injury inflicted on human life or
health, alimony and other pecuniary sums given to an individual as means
of subsistence in the absence of dishonesty on his part and of
calculation error;
4) pecuniary sums and other property given for the execution of a
non-existent obligation, if the purchaser proves that the person who
demands the return of property knew about the absence of the obligation
or granted property for charity purposes.
President of the Russian Federation Boris Yeltsin
Part 3
Adopted by the State Duma on November 1 2001
Approved by the Federation Council on November 14 2001
Section V. Law of Succession
Chapter 61. General Provisions Governing Succession
Article 1110. Succession
1. In the case of succession the deceased's estate (inheritance,
assets of estate) shall pass to other persons by universal succession,
i.e. in an unchanged, single form at the same time, except as otherwise
required by the present Code.
2. Succession shall be governed by the present Code and other laws
and, in the cases specified by law, by other legal acts.
Article 1111. Grounds for Succession
Succession shall be by will and by operation of law.
Succession by operation of law shall take place when and where it is
not changed by a will and also in the other cases established by the
present Code.
Article 1112. Deceased's Estate
The deceased's estate shall incorporate the items and other property
owned by the deceased as of the date of opening of the inheritance, in
particular, rights in rem and liabilities.
Rights and liabilities inseparable from the personality of the
deceased, in particular the right to alimony, right to damages for harm
inflicted to the citizen's life or health and also rights and liabilities
prohibited for succession by the present Code or other laws shall not be
included in the estate.
Personal incorporeal rights and other intangible wealth shall not be
included in the estate.
Article 1113. The Opening of an Inheritance
An estate shall be opened on the death of a citizen. The
announcement of a citizen's death by a court shall cause the same legal
consequences as the death of a citizen.
Article 1114. The Time of Opening of an Inheritance
1. The day of the citizen's death shall be deemed the date of
opening of the inheritance. In the case of announcement of a citizen's
death on the day when the decision of the court whereby the citizen is
announced dead becomes final shall be deemed the date of opening of the
inheritance and in cases when under Item 3 of Article 45 of the present
Code the day of death of the citizen is recognised as the date of the
citizen's alleged death - the date of death indicated in the decision of
the court.
2. Citizens who die on the same day shall be deemed to have died at
the same time for the purposes of hereditary succession, and shall not
inherit from each other. In such cases the heirs of each of them shall be
called upon to inherit.
Article 1115. The Place of Opening of an Inheritance
The deceased's last abode shall be deemed the place of opening of an
inheritance (Article 20).
If the last abode of a deceased person who had property on the
territory of the Russian Federation is not known or is located outside of
it, the place of opening the estate in the Russian Federation shall be
deemed the place where the assets of such an estate are located. If such
assets of estate are located in different places, the place where the
immovable property of the estate or the most valuable part of the
immovable property is located shall be deemed the place of opening of the
inheritance, or should there be no immovable property, the place where
movable property or the most valuable part thereof is located.
Article 1116. Persons Who Can Be Called Upon to Inherit
1. Those left alive as of the date of opening of the inheritance and
also persons conceived during the lifetime of the deceased and born after
the opening of the inheritance can be called upon to inherit.
In the case of succession by will the legal entities specified in
the will and existing as of the date of opening of the inheritance can
also be called upon to inherit.
2. In the case of succession by will the Russian Federation, Russian
regions, municipal entities, foreign states and international
organisations can be called upon to inherit, and in the case of
succession by operation of law, the Russian Federation in compliance with
Article 1151 of the present Code.
Article 1117. Unworthy Heirs
1. The following shall not be entitled to inherit either by
operation of law or by will: citizens who by their deliberate illegal
actions directed against the deceased or any of the deceased's heirs or
against the exercise of the deceased's last intentions expressed in a
will assisted or tried to assist in their being called upon to inherit or
other persons' being called upon to inherit or who tried to assist in
increasing the share of the estate they or other persons are entitled to,
if such circumstances have been proven in court. However, citizens to
whom the deceased has bequeathed property after they lost their right to
inherit shall be entitled to inherit this property.
Parents shall not be entitled to inherit from children in respect of
whom parents have been deprived of their parental rights by the court,
provided these rights had not been restored as of the date of opening the
inheritance.
2. On the application of a person concerned the court shall refuse
entitlement to citizens who deliberately and persistently evaded
performing their duties of upkeep which the deceased vested in them by
law.
3. According to the rules set out in Chapter 60 of the present Code,
a person not having a right of inheritance or deprived of a right of
inheritance under the present article (unworthy heir) shall return all
property received without grounds from the estate.
4. The regulations of the present article shall extend to heirs
entitled to a compulsory share in the estate.
5. The regulations of the present article shall accordingly extend
to the testamentary trust (Article 1137). If the subject matter of a
testamentary trust was the performance of certain work for or the
provision of a certain service to an unworthy beneficiary, the
beneficiary shall reimburse the heir who has discharged the trust for the
value of the work or service performed for the unworthy beneficiary.
Chapter 62. Succession by Will
Article 1118. General Provisions
1. Property can be disposed of on death only by means of a will.
2. The will can be created by a citizen who had his full dispositive
capacity as of the time when it was created.
3. The will shall be created in person. The will cannot be created
through a representative.
4. The will shall contain dispositions of only one citizen. The will
shall not be created by two citizens or more.
5. The will is a one-party deal which creates rights and duties
after the opening of the inheritance.
Article 1119. The Freedom of Will
1. The deceased shall be entitled to leave by will at his/her
discretion property to any persons, to set heirs' shares in the estate in
any way, to deprive one, several or all legal heirs of inheritance
without indicating reasons for such a deprivation and also to include
other dispositions in the will in compliance with the rules of the
present Code concerning succession, to revoke or alter his/her created
will.
The freedom of the will shall be limited by the rules of compulsory
share of estate (Article 1149).
2. The deceased shall not be obligated to inform anybody of the
content, creation, alteration or revocation of a will.
Article 1120. The Right to Leave Any Property in a Will
The deceased shall be entitled to create a will containing
dispositions relating to any property, in particular, a property that
he/she might acquire in the future.
The deceased can dispose of his/her property or a portion thereof by
means of one or several wills.
Article 1121. The Appointment of an Heir and an Alternate Heir in a
Will
1. The deceased can create a will for the benefit of one or several
persons (Article 1116) which are or are not his/her legal heirs.
2. In his/her will the deceased can indicate an alternate heir (can
sub-appoint an heir) for the case of death of the heir appointed by
him/her in the will or death of the legal heir prior to the opening of
the inheritance or simultaneously with the deceased's death or after the
opening of the inheritance but before accepting the inheritance or the
heir's failure to accept the inheritance due to other reasons or refusal
to accept it or lack of entitlement or the heir's being refused the
inheritance as an unworthy heir.
Article 1122. The Shares of Heirs in Property Left by a Will
1. Property left by will to two or several heirs without their
shares in the estate being specified and without an indication as to who
is to take the specific items or rights from the estate shall be deemed
left by will to heirs in equal shares.
2. In a will an indication of a portion of an indivisible item
(Article 133) intended for each of the heirs in kind shall not cause the
invalidity of the will. Such item shall be deemed left by will in shares
corresponding to the value of these portions. The procedure for the heirs
to use this indivisible item shall be established in compliance with the
portions of the item intended for them in the will.
In a certificate of the right to inheritance relating to an
indivisible item left by will in shares in kind, the shares of the heirs
and the procedure for use of such item, given the consent of the heirs,
shall be specified in compliance with the present article. If a dispute
between the heirs occurs, their shares and the procedure for use of the
indivisible item shall be determined by a court.
Article 1123. The Secrecy of a Will
A notary, another person attesting to a will, translator, executor
of the will and also a citizen who signs a will on the deceased's behalf
shall not disclose information concerning the content of the will, its
creation, alteration or revocation before the opening of the
inheritance.
If the secrecy of a will is violated, the testator shall be entitled
to claim reimbursement for moral harm and also use other remedies to
protect civil rights as laid down in the present Code.
Article 1124. General Rules Concerning the Form of
and Procedure for the Creation of a Will
1. The will shall be created in writing and attested by a notary. A
will can be attested by other persons in the cases specified in Item 7 of
Article 1125, Article 1127 and Item 2 of Article 1128 of the present
Code.
Failure to observe the rules established by the present Code as
concerning the written form and attestation of a will shall cause the
invalidity of the will.
A will can be drawn up in simple written form only in exceptional
cases as specified in Article 1129 of the present Code.
2. If under the rules of the present Code witnesses are in
attendance when a will is drawn up, signed and attested or when a will is
passed to a notary the following persons shall not be such witnesses and
shall not sign the will on the testator's behalf:
a notary or other person who attests to the will;
a person being a beneficiary of the will or a testamentary trust,
the spouse, children and parents of the person;
citizens without full dispositive capacity;
illiterate persons;
citizens with such physical disabilities that do not allow them to
understand the essence of the event in full;
persons without a sufficient degree of command of the language in
which the will is written, except for cases of a closed will.
3. In events when under the rules of the present Code the attendance
of witnesses is compulsory when a will is drawn up, signed and attested
or when a will is passed to a notary, the absence of a witness when the
said actions are being committed shall cause the invalidity of the will
and the lack of the witness's compliance with the provisions of Item 2 of
the present article may be deemed a ground for the will's being
recognised as void.
4. The will shall bear an indication of the place and date of its
attestation, except for the case specified in Article 1126 of the present
Code.
Article 1125. A Will Attested by a Notary
1. A will attested by a notary shall be signed by the testator or
written by a notary on the testator's words. Technical facilities can be
used to write or record a will (computer, typewriter etc.).
2. A will written by a notary on a testator's words shall be read in
full by the testator in the presence of the notary before it is signed.
If the testator cannot read the will by himself (herself) the notary
shall read out the text for him/her, with a relevant annotation to this
effect being entered in the will as including the reasons why the
testator could not read the will by himself (herself).
3. The will shall be signed by the testator's own hand.
If a testator, due to physical disability, grave illness or
illiteracy, cannot sign a will by his/her own hand the will can be signed
on his/her behalf on his/her request by another citizen with a notary in
attendance. The will shall include the reasons why the testator could not
sign the will by himself (herself) and also the full name and residential
address of the citizen who signed the will on the testator's request, in
compliance with the citizen's personal identity document.
4. A witness can be in attendance when a will is drawn up and
attested by a notary if the testator so wishes.
If a will is drawn up and attested with a witness in attendance it
shall be signed by the witness and it shall bear an indication of the
full name and residential address of the witness in compliance with the
witness's personal identity document.
5. The notary shall warn the witness and also citizens who signs a
will on the testator's behalf of the need for observing the will
nondisclosure clause (Article 1123).
6. While attesting to a will the notary shall explain to the
testator the content of Article 1149 of the present Code and enter a
relevant annotation.
7. Where under law the officials of local government bodies and
officials of consular institutions of the Russian Federation have a right
to accomplish notarial actions the will can be attested by a relevant
official instead of a notary, in compliance with the rules of the present
Code concerning the form of a will, the procedure for notarial
attestation of a will and secrecy of a will.
Article 1126. Closed Wills
1. The testator shall be entitled to create a will without providing
other persons, including a notary, with the chance of familiarising
himself with the content thereof (a closed will).
2. The closed will shall be hand-written and signed by the testator.
Failure to observe these rules shall cause the invalidity of the will.
3. The closed will shall be passed in a sealed envelope by the
testator to a notary in the presence of two witnesses who shall put their
signatures on the envelope. The envelope signed by the witnesses shall be
put into another envelope and sealed in the presence of the notary, who
shall enter an annotation on the envelope with information on the
testator from whom the notary has accepted the closed will, on the place
and date of acceptance thereof, the full names and residential addresses
of each of the witnesses in compliance with their personal identity
documents.
When the notary accepts the envelope with the closed will from the
testator, the notary shall explain to the testator the content of Item 2
of the present article and Article 1149 of the present Code and shall
enter a relevant annotation in the second envelope and shall also issue a
document to the testator to confirm the acceptance of the closed will.
4. Upon the presentation of a certificate of death of a person who
has created a closed will, a notary shall within 15 days after the
presentation of the certificate open the envelope with the will in the
presence of at least two witnesses and the persons concerned from among
the legal heirs who expressed their desire to attend. After the opening
of the envelope the text of the will contained therein shall be
immediately read out by the notary, whereafter the notary shall draw up
and sign together with the witnesses a protocol which acknowledges that
the envelope with the will has been opened and that it contains the full
text of the will. The original will shall be kept in the custody of the
notary. A copy of the protocol attested by a notary shall be issued to
the heirs.
Article 1127. Wills Qualifying as Wills Attested by a Notary
1. The following shall qualify as wills attested by a notary:
1) wills of citizens undergoing medical treatment in in-patient
institutions, hospitals, other stationary medical treatment institutions
or residing in old-age and disabled nursing houses attested by the chief
physicians, deputy chief physicians in charge of medical work or
physicians on duty at these in-patient institutions, hospitals and other
stationary medical treatment institutions and also the chiefs of the
hospitals, directors or chief physicians of old-age and disabled nursing
houses;
2) wills of citizens who stay aboard vessels during their
navigation, if such vessels navigate under the State Flag of the Russian
Federation, attested by the captains of these vessels;
3) will of citizens who are in prospecting, Arctic or other similar
expeditions, attested by the chiefs of these expeditions;
4) wills of military servicemen and in the places of deployment of
military units where there are no notaries, also wills of civilians
employed by these units, members of their families and members of the
families of military servicemen, attested by the commanders of the
military units;
5) wills of citizens staying at penitentiary institutions, attested
by the chiefs of the penitentiary institutions.
2. A will qualifying as a will attested by a notary shall be signed
by the testator in the presence of the person attesting to the will and
of a witness, who shall also sign the will.
As far as the rest is concerned, such a will shall be subject to the
rules of Articles 1124 and 1125 of the present Code.
3. A will attested in compliance with the present article shall be
forwarded, as soon as possible, by the person who has attested it to the
place of abode of the testator via the justice bodies. If the person who
has attested a will knows the place of abode of the testator the will
shall be forwarded directly to a relevant notary.
4. If in any of the cases mentioned in Item 1 of the present article
a citizen who intends to create a will expresses his/her intention to
invite a notary for this purpose and there is a reasonable possibility
for satisfying such an intention, the persons who enjoy under the said
item the right of attesting a will shall do their best to invite a notary
to the testator.
Article 1128. The Testamentary Disposition of Funds in Banks
1. The right to funds paid by a citizen as a bank deposit or in any
other bank account of the citizen may be left by will or in compliance
with the procedure set out in Articles 1124 - 1127 of the present Code or
by means of creation of testamentary dispositions in writing in the
branch of bank where the account is located. Such testamentary
dispositions shall have the effect of a will attested by a notary in
respect of the funds kept in the account.
2. Testamentary disposition of rights to funds in a bank shall be
signed by the hand of the testator and include the date of creation and
shall be attested by a bank official entitled to accept for execution the
client's instructions concerning the funds in his/her account. The
procedure for creation of testamentary dispositions in respect of funds
in banks shall be set out by the Government of the Russian Federation.
3. Rights to funds in respect of which testamentary dispositions
have been created in a bank shall be incorporated in the estate and be
generally inherited in compliance with the rules of the present Code.
These funds shall be handed out to heirs under a certificate of right to
inheritance and in compliance therewith, except for the cases specified
in Item 3 of Article 1174 of the present Code.
4. Accordingly, the rules of the present article shall be applicable
to other credit organisations entitles to raise citizens' funds in
deposit or other accounts.
Article 1129. Wills under Extraordinary Circumstances
1. A citizen who is in a situation that obviously threatens his/her
life and who, by the virtue of prevailing extraordinary circumstances, is
deprived of an opportunity to create a will under the rules of Articles
1124 - 1128 of the present Code may make his/her last wishes as to the
disposition of his/her property in a simple written form.
The citizen's last wishes set out in simple written form shall be
deemed his/her will, if the testator has written a document in his/her
own hand in the presence of two witnesses the content whereof evidences
that it is a will.
2. A will created under the circumstances specified in Paragraph 1
of Item 1 of the present article shall no longer be valid if within one
month after the termination of these circumstances the testator fails to
create a will in any other form specified in Articles 1124 - 1128 of the
present Code.
3. In accordance with the present article a will created under
extraordinary circumstances shall be subject to execution only on the
condition that a court acting on the request of the persons concerned
confirms the fact that the will has been created under extraordinary
circumstances. The said claim shall be filed before the expiry of the
term set for acceptance of the inheritance.
Article 1130. The Revocation and Alteration of a Will
1. The testator shall be entitled to revoke or alter a will he/she
has created, at any time after the creation thereof without an indication
of the reason for the revocation or alteration.
No one's consent is required for revoking or altering a will, in
particular, of persons appointed as heirs in the will that is being
revoked or altered.
2. The testator is entitled, by means of a new will, to revoke a
previous will as a whole or to amend it by means of revocation or
alteration of specific testamentary dispositions contained therein.
A subsequent will not containing a direct indication concerning
revocation of a previous will or specific testamentary dispositions
contained therein shall revoke the previous will in full or in as much as
it conflicts with the subsequent will.
A will fully or partially revoked by a subsequent will shall not be
deemed restored if the subsequent will is revoked by the testator in full
or in as much as the relevant portion is concerned.
3. In the case of invalidity of the subsequent will, succession
shall take effect according to the previous will.
4. Also a will can be revoked by means of will revocation
dispositions. The will revocation dispositions shall be created in the
form established by the present Code for the creation of a will. The will
revocation instructions shall be therefore subject to the rules of Item 3
of the present article.
5. A will created under extraordinary circumstances (Article 1129)
can only revoke or alter the same kind of will.
6. Testamentary dispositions in a bank (Article 1128) can only
revoke or alter testamentary dispositions concerning the disposition of
funds in this bank.
Article 1131. Invalidity of a Will
1. In the event of violation of the provisions of the present Code
causing the invalidity of a will, depending on the grounds for the
invalidity, the will shall be deemed invalid by virtue of having been
recognised as such by a court (a contentious will) or irrespective of
such recognition (a will that is null and void).
2. A will can be recognised as void by a court on the complaint
filed by a person whose rights or lawful interests are violated by the
will. A will shall not be subject to contention before the opening of the
inheritance.
3. Slips of the pen and other insignificant breaches of the
procedure for the creation, signing or attestation of a will shall not
serve as grounds for the invalidity of a will if a court has established
that they do not affect the construction of the testator's will.
4. Both a will and its specific testamentary dispositions can be
void. The invalidity of specific dispositions contained in a will shall
not be deemed to affect the rest of the will if one can suppose that it
would have been included in the will even if the void dispositions were
not there.
5. The invalidity of a will shall not deprive the persons specified
therein as heirs or beneficiaries of the right to succession by operation
of law or under another will that is valid.
Article 1132. Construction of Wills
While constructing a will a notary, executor or court shall take
into account the literal meaning of the words and expressions contained
therein.
If the literal meaning of a provision of a will is vague it shall be
established by means of comparison with other provisions and the sense of
the will as a whole. In such cases the fullest exercise of the testator's
will shall be ensured.
Article 1133. Execution of Wills
Execution of a will shall be effected by heirs under the will,
except for cases when its execution is fully or partially effected by the
executor of the will (Article 1134).
Article 1134. Executor of Wills
1. The testator may appoint a personal representative (executor)
specified in the will to execute the will, irrespective of his/her being
an heir or not.
The citizen's consent to act as executor shall be expressed by the
citizen by means of his signature in the will or in an application
attached thereto or in an application filed with the notary within one
month after the date of opening of the inheritance.
A citizen shall be deemed to have granted his/her consent to act a
the executor of a will if he/she proceeds to execute the will within one
month after the date of opening of the inheritance.
2. After the opening of an inheritance the court can relieve the
executor of the will from his/her duties either on his/her own request or
on the request of heirs if there are circumstances obstructing the
execution of his/her duties.
Article 1135. The Powers of the Executor of the Will
1. The powers of the executor of a will shall be based on the will
whereby he/she is appointed as executor and they shall be certified by a
certificate issued by the notary.
2. Except as otherwise required by the will, the executor of the
will shall take the measures required for executing the will, namely:
1) arrange for the passage of assets of estate to the heirs entitled
thereto in compliance with the wishes of the testator expressed in the
will and law;
2) take measures on his/her own or through the notary for preserving
the estate and administering it in the interests of the heirs;
3) receive the amounts of money owed to the testator and other
assets for the purpose of passing them to the heirs, unless the assets
are subject to transfer to other persons (Item 1 Article 1183);
4) perform testamentary dispositions or demand that heirs perform
under testamentary trust provisions (Article 1137) under provisions
whereby they are to execute a duty (Article 1139).
3. The executor of a will shall be entitled to act in connection
with the execution of the will in his own name, in particular, in court,
other governmental bodies and institutions.
Article 1136. Reimbursement of Expenses Relating
to the Execution of a Will
The executor of a will shall be entitled to receive a reimbursement
on the account of the estate for the necessary expenses incurred in
connection with execution of the will and also a remuneration on the
account of the estate if there is a provision to this effect in the will.
Article 1137. Testamentary Trust
1. The testator is entitled to vest in one or several heirs a duty
by will or by operation of law the execution of a duty of property nature
for the benefit of one or several persons (beneficiaries) who acquire a
right to claim execution of the duty (testamentary trust).
A testamentary trust shall be established in the will.
A will may contain a testamentary trust only.
2. The object of the testamentary trust can be transferred to a
beneficiary into his/her ownership, possession by another right in rem or
use of an item incorporated in the estate, transfer to a beneficiary of
an item in action incorporated in the estate, acquisition for a
beneficiary and transfer thereto of another property, performance of
specific work for him/her or the provision thereto of a specific service
or the making of periodical payments for his/her benefit etc.
In particular, an heir entitled to a residential house, an apartment
or other housing accommodation may be vested by a testator with the duty
to grant a right to use this facility or a part thereof to another person
for the lifetime of such a person or for another term.
At a subsequent transfer of the title to assets of estate to another
person the right of use of such assets granted by a testamentary trust
shall remain in effect.
3. Relationships between a beneficiary (creditor) and an heir vested
with the duty of executing a testamentary trust (debtor) shall be subject
to the provisions of the present Code concerning liabilities, except as
otherwise required by the rules of the present section and the essence of
the testamentary trust.
4. The right to receive a testamentary trust shall be in effect for
a three-year term after the date of opening of an inheritance and shall
be non-transferable to other persons. However, an alternate beneficiary
may be appointed together with a beneficiary in cases when the
beneficiary dies before the opening of the inheritance or simultaneously
with the testator or refuses to accept the testamentary trust, did not
exercise his/her right to receive the testamentary trust or is deprived
of the right to receive the testamentary trust in compliance with the
rules of Item 5 Article 1117 of the present Code.
Article 1138. Execution of a Testamentary Trust
1. An heir vested with the duty to execute a testamentary trust
shall execute it within the limits of the value of the portion of estate
he/she took less the testator's debts relating to the heir.
If an heir vested with the duty to execute a testamentary trust is
entitled to a compulsory share of estate, his duty to execute the
testamentary trust shall be limited to the value of the portion of estate
he/she took which exceeds the amount of his/her compulsory share.
2. If the duty to execute a testamentary trust is vested in several
heirs, such a gift shall be an encumbrance on the right of each of them
to the estate commensurately to one's share in the estate, except as
otherwise required by the will.
3. If a beneficiary dies before the opening of the inheritance or
simultaneously with the testator or refused to receive a testamentary
trust (Article 1160), had not exercised his/her right to receive the
testamentary trust within a three-year term after the opening of the
inheritance or was deprived of the right to receive the testamentary
trust in compliance with the rules of Article 1117 of the present Code,
the heir with the duty to execute the testamentary trust shall be
relieved from the duty, except for cases when an alternate heir has been
appointed for this heir.
Article 1139. Private Purpose Trust
1. In a will the testator may vest in one or several heirs a duty by
will or by operation of law to commit an action of property or
nonproperty nature aimed at attaining a commonly beneficial aim (private
purpose trust). Such a duty may also be vested in the executor of a will
on the condition that the will allocates a portion of assets of the
estate for the purposes of execution of the private purpose trust.
The testator is also entitled to vest in one or several heirs the
duty of upkeeping domestic animals belonging to the testator and also of
exercising the necessary supervision and care in respect thereof.
2. A private purpose trust whose object is actions of property
nature shall be subject to the rules of Article 1138 of the present Code.
3. Persons concerned, the executor of the will and any of the heirs
are entitled to claim in court the enforcement of a private purpose
trust, except as otherwise required by the will.
Article 1140. Transfer of the Duty to Execute a Testamentary Trust
or Private Purpose Trust to Other Heirs
If, as the result of the circumstances specified in the present Code
the portion of the estate due to a heir vested with a duty to execute a
testamentary trust or private purpose trust is transferred to other heirs
the latter shall execute the testamentary trust or private purpose trust,
except as otherwise required by the will or law.
Chapter 63. Succession by Operation of Law
Article 1141. General Provisions
1. Legal heirs shall be called upon to inherit in compliance with
the priority ranking set out in Articles 1142 - 1145 and 1148 of the
present Code.
The heirs of each next category shall inherit if there are no heirs
of the preceding categories, i.e. if there are no heirs of the preceding
categories
or if neither of them are entitled to inherit or if all of them have
been barred from inheritance (Article 1117), or deprived of inheritance
(Item 1 Article 1119), if neither of them have accepted inheritance or if
all of them have disclaimed inheritance.
2. Heirs of one category shall inherit in equal shares, except for
the heirs who inherit by right of representation (Article 1146).
Article 1142. First Category Heirs
1. Legal heirs of the first category are the children, spouse and
parents of the testator.
2. The testator's grandchildren and their issue shall inherit by
right of representation.
Article 1143. Second Category Heirs
1. If there are no heirs of the first category the legal heirs of
the second category shall be the full and half brothers and sisters of
the testator, his grandfather and grandmother both on the side of the
father and on the side of the mother.
2. The children of full and half brothers and sisters of
the testator (nephews, nieces of the testator) shall inherit by
right of representation.
Article 1144. Third Category Heirs
1. If there are no heirs of the first and second categories the
legal heirs of the third category shall be the full and half brothers and
sisters of the of the parents of the testator (uncles and aunts of the
testator).
2. Cousins of the testator shall inherit by right of representation.
Article 1145. Next Category Heirs
1. If there are no heirs of the first, second and third categories
(Articles 1142 - 1144), the right to inherit by law shall be acquired by
the testator's relatives of the third, fourth and fifth degree of kinship
who do not qualify as heirs of the preceding categories.
The degree of kinship shall be determined by the number of births
that separate relatives from each other. The birth of the testator in
this case does not count.
2. Under Item 1 of the present article the following shall be called
upon to inherit:
as heirs of the fourth category: relatives of the third degree of
kinship - great grandfathers and great grandmothers of the testator;
as heirs of the fifth category: relatives of the fourth degree of
kinship - children of full nephews and nieces of the testator (grandsons
and granddaughters once removed) and brothers and full sisters of their
grandfathers and grandmothers (grandsons and granddaughters once removed)
and full brothers and sisters
of their grandfathers and grandmothers once removed);
as the heirs of the sixth category: relatives of the fifth degree of
kinship - children of grandsons and granddaughters of the testator once
removed (grand grandsons and grand granddaughters once removed), children
of his cousins (nephews and nieces once removed) and children of his
grandfathers and grandmothers once removed (uncles and aunts once
removed).
3. If there are no heirs of the preceding categories the following
shall be called upon to inherit as heirs of the seventh category by law:
stepsons, stepdaughters, the stepfather and the stepmother of the
testator.
Article 1146. Succession by Right of Representation
1. The share of a legal heir who has died before the opening of the
inheritance or simultaneously with the testator shall be passed by right
of representation to his relevant issue in the cases specified in Item 2
of Article 1142, Item 2 of Article 1143 and Item 2 of Article 1144 of the
present Code and it shall be divided between them in equal shares.
2. The issue of a legal heir who has been deprived of inheritance by
the testator (Item 1 of Article 1119) shall not inherit by right of
representation.
3. The issue of an heir who has died before the opening of the
inheritance or simultaneously with the testator and who would not have
had a right of inheritance under Item 1 of Article 1117 of the present
Code shall not inherit by the right of representation.
Article 1147. Succession by Adopted Children and Adopters
1. In the case of succession by operation of law an adopted child
and his/her issue on one side and the adopter and his/her relatives on
the other side shall qualify as relatives by origin (blood relatives).
2. The adopted child and his/her issue shall not inherit by
operation of law after the death of the parents of the adopted child and
other blood relatives thereof and the parents of the adopted child and
other blood relatives thereof shall not inherit by operation of law after
the death of the adopted child and his/her issue, except for the cases
specified in Item 3 of the present article.
3. In cases when under the Family Code of the Russian Federation an
adopted child retains under a court decision relations with one of
his/her parents or other blood relatives the adopted child and his/her
issue shall inherit by operation of law after the death of these
relatives and the latter shall inherit by operation of law after the
death of the adopted child and his/her posterity.
Inheritance under the present item shall not exclude inheritance
under Item 1 of the present article.
Article 1148. Succession by Disabled Dependants of the Testator
1. Citizens qualifying as the legal heirs specified in Articles 1143
- 1145 of the present Code who are disabled as of the date of opening of
the inheritance but not included in the category of heirs are called upon
to inherit shall inherit by operation of law together and in equal shares
with the heirs of that category if they had been dependants of the
testator for at least a one-year term preceding the death of the
testator, regardless of whether they resided together with the testator
or not.
2. Legal heirs shall be deemed citizens not included in the circle
of heirs specified in Articles 1142 - 1145 of the Code but who were
disabled when the inheritance was opened who had been dependants of the
testator at least for the one-year term preceding the death of the
testator and resided together with him/her. If other legal heirs exist
they shall inherit together pari passu with the heirs of the category
called upon to inherit.
3. If there are no other legal heirs the disabled dependants of the
testator shall inherit by themselves as eighth category heirs.
Article 1149. The Right to a Compulsory Share of Estate
1. The minor or disabled children of the testator, his disabled
spouse and parents and also the disabled dependants of the testator who
are subject to be called upon to inherit under Items 1 and 2 of Article
1148 of the present Code shall inherit irrespective of the content of the
will at least half of the share each of them is entitled to in the case
of succession by operation of law (compulsory share).
2. The right to a compulsory share in an estate shall be satisfied
out of the residual part of the estate even if it is going to diminish
the rights of other legal heirs to that portion of estate and if the
nonbequeathed part of assets is insufficient to satisfy the right to
compulsory share, out of the portion of assets that has been bequeathed.
3. Everything that an heir entitled to a compulsory share takes out
of the estate on any ground shall count as part of the compulsory share,
in particular, the value of a testamentary trust established for the
benefit of such an heir.
4. If the exercise of a right to a compulsory share of an estate is
going to cause the impossibility of passing to an heir property which was
not used during the testator's lifetime by an heir entitled to a
compulsory share and which had been used by an heir by will as his
residential facility (a residential house, apartment, other living
quarters, dacha etc.) or used as the main source of means of subsistence
(means of labour, a creative studio etc.) the court may cut the size of
the compulsory share or refuse to award such a share with due regard to
the property status of the heirs entitled to a compulsory share.
Article 1150. The Rights of a Spouse to Inheritance
The right of inheritance that the surviving spouse of the testator
has by will or by operation of law shall not diminish the spouse's right
to the portion of property gained during the period of marriage with the
testator and deemed their common property. The share of the deceased
spouse in this property determined in compliance with Article 256 of the
present Code shall be deemed a part of the estate and it shall pass to
the heirs in compliance with the rules established by the present Code.
Article 1151. Escheat
1. If there are no legal heirs and heirs by will or if neither of
the heirs has a right to inherit or all heirs have been deprived of their
right of inheritance (Article 1117) or neither of the heirs have accepted
the inheritance or all the heirs refused their inheritance and neither of
them has indicated that the inheritance is waived for the benefit of
another heir (Article 1158) the decedent's estate shall be deemed
escheat.
2. Escheat property shall pass into the ownership of the Russian
Federation by succession by operation of law.
3. The procedure for succession and recording of escheat property
and also the procedure for transferring such property into the ownership
of Russian regions or municipal entities shall be set out by a law.
Chapter 64. Acquisition of Inheritance
Article 1152. Acceptance of Inheritance
1. To acquire inheritance a heir shall accept it. No acceptance is
required for the acquisition of escheat property (Article 1151).
2. The acceptance of a portion of inheritance by an heir means
acceptance of the whole inheritance due to him/her, whatever the nature
and the whereabouts thereof.
When an heir is called upon to inherit simultaneously on several
grounds (by will and by operation of law or by hereditary transition and
as the result of opening an inheritance etc.) the heir may accept an
inheritance he is entitled to on one of these grounds, on several of them
or on all of them.
No acceptance of inheritance shall be stipulated by conditions or
special clauses.
3. The acceptance of an inheritance by one or several heirs shall
not mean an acceptance of inheritance by other heirs.
4. An accepted inheritance shall be recognised as owned by the heir
from the date of opening of the inheritance, irrespective of the time of
the actual acceptance and also irrespective of the time of state
registration of the heir's rights to assets of estate where such a right
is subject to state registration.
Article 1153. The Methods of Accepting an Inheritance
1. An inheritance is accepted by means of the heir's filing an
inheritance acceptance application or an application for a certificate of
the right to the inheritance with the notary or personal representative
under law at the place of opening of the inheritance.
If an heir's application is passed to the notary by another person
or the signature of the heir is mailed on the application shall be
attested by a notary, an official empowered to accomplish notarial
actions (Item 7 of Article 1125) or a person empowered to attest powers
of attorney in compliance with Item 3 of Article 185 of the present
Code).
An inheritance can be accepted through a representative if the power
of accepting an inheritance is specifically established in powers of
attorney. No powers of attorney are required for a personal
representative to accept an estate.
2. Until and unless the contrary is proven, an heir shall be deemed
to have accepted an inheritance if he has committed actions evidencing an
actual acceptance of the inheritance, in particular, if the heir:
has commenced possession or administration of assets of the estate;
has taken measures for preserving assets of the estate, protecting
it against third persons' encroachments or claims;
has incurred expenses on his account towards maintenance of assets
of the estate;
has paid the testator's debts or received from third persons amounts
of money payable to the testator.
Article 1154. The Term for Acceptance of an Inheritance
1. An inheritance can be accepted within six months after the date
of opening of the inheritance.
If the inheritance is opened on the date of the alleged death of a
citizen (Item 1 of Article 1114) the inheritance can be accepted within
six months after the date when the court decision whereby the citizen is
announced dead becomes final.
2. If a right of inheritance emerges for other persons as the result
of an heir's disclaimer of an inheritance or an heir's disqualification
on the grounds established by Article 1117 of the present Code such
person can accept the inheritance within six months after the date of
occurrence of their right of inheritance.
3. Persons whose right of inheritance occurs only due to an heir's
non-acceptance of an inheritance can take the inheritance within three
months after the expiry of the term specified in Item 1 of the present
article.
Article 1155. Acceptance of an Inheritance upon the Expiry of
the Established Term
1. On the application filed late by a heir as concerning the term
set for acceptance of an inheritance (Article 1154) the court may
reinstate the term and recognise the heir as having accepted the
inheritance if the heir did not know and was not supposed to know of the
opening of the inheritance or if the heir has missed the term due to
other legitimate reasons and on the condition that the heir who missed
the term set for acceptance of the inheritance has filed his/her
application with the court within six months after the time when the
causes/reasons for the lateness ceased to exist.
Having recognised an heir as having accepted an inheritance, the
court shall determine the shares of all the heirs in the estate and if
necessary shall designate measures for safeguarding the rights of the new
heir to his/her entitlement (Item 3 of the present Article). The
certificates of a right of inheritance issued earlier shall be recognised
by the court as void.
2. An heir can accept an inheritance after the expiry of the term
set for the acceptance thereof without resorting to the court if all the
other heirs who have accepted the inheritance grant their consent thereto
in writing. If such a written consent is granted by heirs in the absence
of a notary, their signatures on the documents whereby the consent is
granted shall be attested in the manner specified in Paragraph 2 of Item
1 of Article 1153 of the present Code. The heirs' consent shall be deemed
a ground for a notary to annul the certificate of right of inheritance
issued earlier and to issue a new certificate.
If, under a certificate issued earlier, state registration has been
accomplished in respect of a right to immovable property, the notary's
decision to annul the certificate issued earlier and the new certificate
shall be deemed a ground for amending the state registration records
correspondingly.
3. A heir who accepts an inheritance after the expiry of the
established term in keeping with the rules set out in the present article
shall be entitled to take his/her entitlement in compliance with the
rules of Articles 1104, 1105, 1107 and 1108 of the present Code which, in
the case specified in Item 2 of the present Article, shall be applicable
except as otherwise required by a written agreement concluded by the
heirs.
Article 1156. The Transfer of a Right to Accept an Inheritance
(Hereditary Transition)
1. If an heir called upon to inherit by will or by operation of law
dies after the opening of the inheritance without having accepted it
within the established term, the right of accepting his/her entitlement
shall pass to his/her legal heirs, or if all assets of the estate have
been left by will, to his/her heirs by will (hereditary transition). The
right of accepting an inheritance by way of hereditary transition is not
incorporated into the estate left after the death of such a heir.
2. The right of accepting an inheritance that belonged to a deceased
heir may be exercised by his/her heirs on general terms.
If the portion of the term set for the purposes of inheritance
acceptance that remains after the death of an heir is less than three
months, the term shall be extended to reach three months. Upon the expiry
of the term set for inheritance acceptance purposes the heirs of a
deceased heir may be recognised by the court as having accepted the
inheritance under Article 1155 of the present Code if the court is of the
opinion that the reasons for the lateness are legitimate.
3. The right of an heir to accept a portion of inheritance as a
compulsory share (Article 1149) shall not be transferable to his/her
heirs.
Article 1157. The Right of Disclaimer
1. The heir is entitled to disclaim the gift he is entitled to, for
the benefit of other persons (Article 1158) or without an indication of a
person for whose benefit he rejects his/her gift.
No disclaimer shall be possible in the case of escheat.
2. The heir is entitled to disclaim the gift he is entitled to
within a term set for acceptance of inheritance (Article 1154), in
particular, in cases when he has already accepted the gift.
If the heir has committed actions evidencing the actual acceptance
of an inheritance (Item 2 of Article 1153) a court may recognise him/her
as having disclaimed the inheritance on the application of such heir, in
particular, after the expiry of the set term if the court finds that the
reasons for the lateness are legitimate.
3. A disclaimer of an inheritance shall not be subject to alteration
or reversed.
4. In the case of a minor heir, an heir lacking dispositive capacity
or having a partial dispositive capacity disclaimer of an inheritance
shall be admitted on a preliminary consent of the body of tutorship and
guardianship.
Article 1158. Disclaimer of an Inheritance for the Benefit of Other
Persons and Disclaimer of a Portion of a Gift
1. The heir is entitled to disclaim an inheritance for the benefit
of other persons from among the heirs under a will or who belong to any
category and who have not been refused inheritance (Item 1 Article 1119),
in particular, for the benefit of those who were called upon to inherit
by the right of representation or inheritance transition (Article 1156).
No disclaimer shall be for the benefit of any of the above persons:
of assets inherited under a will if the whole of the decedent's
estate is left by will for heirs appointed by the decedent;
of a compulsory share of an estate (Article 1149);
if an alternate heir has been appointed for the heir in question
(Article 1121);
2. No disclaimer shall be for the benefit of persons who are not
specified in Item 1 of the present article.
No disclaimer of inheritance shall be stipulated by conditions or
special clauses.
3. An heir shall not disclaim a portion of his/her gift. However, if
an heir is called upon to inherit simultaneously on several grounds (by
will, by law or by inheritance transition or as a result of opening of an
inheritance etc.) he shall be entitled to disclaim the gift he is
entitled to on one of these grounds, on several of them or on all of
them.
Article 1159. Methods of Disclaimer
1. The disclaimer of an inheritance shall be effected by the heir by
means of filing a disclaimer application with a notary or official
empowered under law to issue certificates of inheritance at the place of
opening of the inheritance.
2. If a disclaimer application is filed with a notary by a person
other than the heir or if it is mailed the signature of the heir on such
application shall be attested in the manner established in Paragraph 2 of
Item 1 of Article 1153 of the present Code.
3. An inheritance may be disclaimed through a representative if
disclaimer powers are laid down in the powers of attorney. No powers of
attorney is required for a legal representative to disclaim inheritance.
Article 1160. Right of Disclaimer of a Testamentary Trust
1. The beneficiary is entitled to refuse accepting a trust (Article
1137). In this case no trust for the benefit of another person, a trust
stipulated by a clause or condition is permitted.
2. If the beneficiary is at the same time an heir his/her right
specified in the present article shall not depend on his/her right to
accept the inheritance or disclaim it.
Article 1161. Increment of Shares of Estate
1. If an heir does not accept his/her gift, disclaims his/her gift
without indicating that the disclaimer is for the benefit of another heir
(Article 1158), does not have the right to inherit or if his/her right of
inheritance is forfeited on the grounds established by Article 1117 of
the present Code or as a result of invalidity of the will the portion of
the estate to which such heir would have been entitled shall pass to the
legal heirs called upon to inherit, pro rata to their shares of the
estate.
However, if the testator has left all property to the heirs he
appointed, the portion of the estate to which an heir who disclaimed
his/her gift or who was dropped on the other specified grounds was
entitled shall pass to the other heirs by will pro rata to their shares
of the estate, except as otherwise required by the will in respect of
distribution of that portion of the estate.
2. The rules contained in Item 1 of the present article shall not be
applicable if an alternate heir (Item 2 Article 1121) has been appointed
for the heir who disclaimed his/her gift or who was dropped on other
grounds.
Article 1162. Certificate of Right to Inheritance
1. A certificate of right to inheritance shall be issued at the
place of opening of the inheritance by a notary or an official empowered
by law to accomplish such a notarial action.
The certificate shall be issued on the application of an heir. If
heirs so wish one certificate may be issued for all the heirs or a
separate certificate may be issued to each of the heirs, for the whole of
the estate or for specific parts thereof.
The same procedure shall be applicable when a certificate is issued
in the case of escheat in the Russian Federation (Article 1151).
2. If, after the issue of a certificate of right to inheritance,
assets of the estate are discovered which are not covered by such a
certificate, an additional certificate of right to inheritance shall be
issued.
Article 1163. Term for Issue of a Certificate of Right to
Inheritance
1. A certificate of right to inheritance shall be issued to heirs at
any time upon the expiry of six months after the date of opening of the
inheritance, except for the cases specified in the present Code.
2. In the case of succession both by will and by operation of law a
certificate of right to inheritance may be issued before the expiry of
six months after the opening of the inheritance if there is reliable
information evidencing that there are no other heirs entitled to the
inheritance or a portion thereof apart from the persons who have applied
for the certificate.
3. The issuance of a certificate of right to inheritance shall be
suspended by the decision of a court and also in the case of existence of
a heir conceived but not yet born.
Article 1164. Heirs' Common Ownership
In the case of succession by operation of law if an estate passes to
two or several heirs and in the case of succession by will if an estate
is left by will to two or several heirs without an indication of specific
assets of the estate to be taken by each of the heirs the estate shall be
put into the share ownership of the heirs as of the time of opening of
the inheritance.
Heirs' common ownership of assets of an estate shall be subject to
the provisions of Chapter 16 of the present Code on share ownership with
due regard to the rules set out in Articles 1165 - 1170 of the present
Code. However, in the distribution of an estate the rules of Articles
1168 - 1170 of the present Code shall be applicable within three years
after the opening of the inheritance.
Article 1165. Distribution of Decedent's Estate by Agreement
between Heirs
1. The assets of estate in the share ownership of two or several
heirs can be divided by agreement between them.
The agreement on distribution of estate shall be subject to the
rules of the present Code concerning the form of deals and form of
agreements.
2. An agreement on distribution of estate incorporating immovable
property, in particular, an agreement on devolution of the share of one
or several heirs may be concluded by heirs after a certificate of right
to inheritance has been issued thereon.
The state registration of heirs' ownership of immovable property
being the subject matter of an agreement on distribution of estate shall
be accomplished on the basis of the agreement on distribution of estate
and the certificate of a right to an inheritance issued earlier and in
cases when the state registration of heirs' rights to immovable property
has been accomplished before the heirs entered the agreement on
distribution of estate, on the basis of the agreement on distribution of
estate.
3. A discrepancy between the way an estate is distributed by heirs
in an agreement they concluded and the shares of the estate to which the
heirs are entitled as specified in the certificate of right to
inheritance shall not cause refusal of state registration of their rights
to the immovable property received as the result of distribution of the
estate.
Article 1166. Safeguarding the Interests of a Child in the Case of
Distribution of Estate
If there is an heir who has been conceived but not yet born,
distribution of an estate shall be accomplished only after the birth of
such a heir.
Article 1167. Safeguarding the Lawful Interests of Minors, Citizens
Lacking Dispositive Capacity or Having a Limited
Dispositive Capacity in the Case of Distribution of
Estate
If among the heirs there are minor citizens, citizens without
dispositive capacity or having a limited dispositive capacity an estate
shall be distributed in compliance with the rules of Article 37 of the
present Code.
For the purpose of safeguarding the lawful interests of the said
heirs the tutorship and guardianship body shall be notified of the
drawing up of an agreement on distribution of estate (Article 1165) has
been drawn up and of a court's hearing a case of distribution of estate.
Article 1168. Right in Rem Relating to an Indivisible Item in Cases
of Distribution of Estate
1. An heir who had a right of share ownership together with the
testator in respect of an indivisible item (Article 133) the share in the
right of which is incorporated in the estate shall have a preferential
right of obtaining as offsetting his/her share of the estate the thing
that was in common ownership, over the heirs who had not been party to
the common ownership before, irrespective of their having used the item
or not.
2. An heir who had been permanently using an indivisible item
(Article 133) incorporated in an estate shall have a preferential right
of obtaining as offsetting his/her share in the estate this thing, over
the heirs who had not been using the thing and had not been party to the
common ownership thereof.
3. If an estate incorporates housing accommodation (residential
house, apartment etc.) which cannot be physically divided, the heirs who
had been residing in the housing accommodation as of the date of opening
of the inheritance and who do not have other housing accommodation shall
have the right to enjoy a preferential treatment, in cases of
distribution of estate, over the other heirs not being owners of the
housing accommodation incorporated in the estate in obtaining this
housing accommodation as offsetting their shares of the estate.
Article 1169. Preferential Right to Ordinary Household Articles in
Cases of Distribution of Estate
In the case of distribution of estate an heir who had been residing
as of the date of opening of an inheritance together with the testator
shall have a preferential right of obtaining as offsetting his/her share
of the estate household articles.
Article 1170. Compensation of Mismatch between Received Assets of
an Estate and the Share in the Estate
1. A mismatch between the assets of estate claimed by an heir by a
preferential right under Articles 1168 or 1169 of the present Code and
the heir's share of the estate shall be eliminated by means of his/her
transferring other assets of the estate to other heirs or by the
provision of another compensation, in particular, disbursement of the
relevant amount of money.
2. Except as otherwise required by an agreement between all the
heirs, the exercise of a preferential right by any of them shall be
possible after the provision of a relevant compensation to other heirs.
Article 1171. Preservation of an Estate and Administration of an Estate
1. For the purpose of safeguarding the rights of heirs,
beneficiaries and other persons concerned the executor of a will or the
notary at the place where an inheritance is opened shall take the
measures specified in Articles 1172 and 1173 of the present Code as well
as other necessary measures for preservation and administration of the
estate.
2. The notary shall take measures for preservation and
administration of the estate on the application of one or several heirs,
executor of the will, a local government body, the tutorship and
guardianship body or other persons acting in the interests of
preservation of the estate. If an executor of the will has been appointed
(Article 1134) the notary shall take measures for preservation and
administration of the estate in agreement with the executor.
The executor of the will shall take measures for the preservation
and administration of the estate on his own or at the request of one or
several heirs.
3. For the purpose of ascertaining the subject matter of gifts and
preserving it banks, other credit institutions and other legal entities
shall inform the notary, at the notary's request, of the information they
have concerning assets belonging to the testator. The information so
obtained shall be passed by the notary only to the executor of the will
and to the heirs.
4. The notary shall take measures for preservation and
administration of the estate within a term set by the notary with due
regard to the nature and value of the estate and also the time required
for the heirs to commence owning their gifts but not exceeding six
months, or in the cases specified in Items 2 and 3 of Article 1154 and
Item 2 of Article 1156 of the present Code, not exceeding nine months
after the opening of the inheritance.
The executor of the will shall take measures for the preservation
and administration of the estate within the term required for executing
the will.
5. In cases when assets of the estate are located in different
places, the notary at the place where the inheritance has been opened
shall forward instructions on the preservation and administration of the
assets of the estate to the notary at the place where the relevant
portion of the assets is located, via the bodies of justice. If the
notary at the place of opening of the inheritance knows who should take
measures for the preservation of the estate, such instructions shall be
forwarded to the relevant notary or official.
6. The procedure for preservation and administration of estate, in
particular, the procedure for drawing up an inventory of the estate shall
be determined by the legislation on notaries. The maximum limits on
remuneration payable under an agreement of custody of estate and
agreement of trust of estate shall be set by the Government of the
Russian Federation.
7. In cases when a right to accomplish notarial actions is granted
under law to officials of local government bodies and officials of
consular institutions of the Russian Federation the necessary measures
for preservation and administration of an estate can be taken by the
relevant official.
Article 1172. Measures for Preservation of the Estate
1. For the purpose of preserving an estate the notary shall draw up
an inventory of the estate in the presence of two witnesses qualifying
under the criteria established in Item 2 of Article 1124 of the present
Code.
The executor of the will, heirs and in relevant cases
representatives of the tutorship and guardianship body can be in
attendance when an inventory of estate is being drawn up.
At the request of persons specified in Paragraph 2 of the present
item, the estate shall be valuated by agreement of the heirs. If no
agreement is made the estate or the portion thereof not covered by a
valuation agreement shall be valuated by an independent appraiser on the
account of the person who has demanded the valuation of the estate, with
these expenses later being distributed among the heirs pro rata to the
value of the assets of estate received by each of them.
2. Money in cash incorporated in the estate shall be deposited with
the notary and foreign currency valuables, precious metals and stones,
articles made from them and securities that do not require management
shall be handed over to a bank into the custody thereof under an
agreement in compliance with Article 921 of the present Code.
3. If the notary is aware that weapons make up a portion of the
estate he shall notify the bodies of interior affairs accordingly.
4. Assets incorporated in the estate but not specified in Items 2
and 3 of the present article, if it does not require management, shall be
passed by the notary under an agreement to an heir into the custody
thereof, or if it cannot be passed to a heir, to another person at the
notary's discretion.
In the case of succession by a will whereby an executor of the will
is appointed, the executor of the will shall be responsible for the
custody of the said assets of estate on his own or by means of entering
into a custody agreement with an heir or another person chosen at the
discretion of the notary.
Article 1173. Management on Trust of the Estate
If the estate incorporates assets that require management apart from
preservation (an enterprise, an interest in the authorised (aggregate)
capital of a partnership or company, securities, exclusive rights etc.)
the notary, acting as a trustee under Article 1026 of the present Code,
shall conclude a trust agreement in respect of such assets.
In the case of succession by a will whereby an executor of the will
is appointed, the rights of the trustee shall belong to the executor of
the will.
Article 1174. Reimbursement of Expenses Incurred Due to the Death
of the Testator and Expenses Towards Preservation and
Administration of the Estate
1. The necessary expenses incurred due to the pre-death illness of
the testator, decent funeral expenses, including the necessary expenses
incurred as payment for the place of burial of the testator, estate
preservation and administration expenses and also testamentary expenses
shall be reimbursable out of the decedent's estate within the value
thereof.
2. Claims for reimbursement of the expenses specified in Item 1 of
the present article may be presented to heirs which have accepted their
gifts and, before the acceptance of a gift, to the executor of the will
or satisfied on the account of the estate.
Such expenses shall be reimbursed before the repayment of debts to
creditors of the testator and within the limits of value of the portion
of the estate taken by each of the heirs. In such cases expenses incurred
in connection with the testator's illness and funeral shall rank as first
category, estate preservation and administration expenses as second
category and testamentary expenses as third category.
3. Any amounts of money owned by the testator, including bank
deposits and accounts, may be used to bear the testator's decent funeral
expenses.
The banks having in their deposits or accounts the testators'
amounts of money shall provide them on the notary's decision to the
person specified in the decision for the purpose of making payment
towards these expenses.
An heir to whom amounts of money in the testator's deposit or any
other bank account have been left by will, in particular in cases when
they were left by means of testamentary instructions in a bank (Article
1128), shall be entitled at any time before the expiry of six months
after the opening of the inheritance to receive from the testator's
deposit or bank account amounts of money required for the funeral of the
testator.
The amount of money handed out by the bank in keeping with the
present item for funeral purposes to an heir or a person indicated in the
notary's decision shall not exceed one hundred times the minimum monthly
wage as established by the law as of the date of application for the
money.
The rules of the present item shall be correspondingly applicable to
other credit organisation entitled to raise citizens' funds in deposit
and other accounts.
Article 1175. Heirs' Liabilities for the Testator's Debts
1. Heirs who have accepted their gift shall be liable together for
the debts of the testator (Article 323).
Each of the heirs shall be liable for the testator's debts within
the limits of the value of the gift he/she takes.
2. An heir who has accepted his/her gift by way of hereditary
transition (Article 1156) shall be liable for the testator's debts within
the limits of the value of the gift and the gift shall not be collected
for the debts of the heir from which he/she acquired the right to the
gift.
3. Testator's creditors are entitled to present their claims to
heirs who have accepted their gifts, within the statutory limitation term
set for relevant claims. Until the acceptance of the gift creditors'
claims may be presented to the executor of the will or the estate may be
collected to satisfy the claims. In the latter case a court shall suspend
considering the case until the time when the estate is distributed among
the heirs or passed to the Russian Federation by way of escheat.
When the testator's creditors file claims, the statutory limitation
term established for relevant claims shall not be broken, suspended or
reinstated.
Chapter 65. Succession of Specific Types of Assets
Article 1176. Succession of Rights Connected with an Interest in
Economic Partnerships and Companies and Production
Co-Operatives
1. The estate of a participant in a general partnership or of a
general partner in a partnership in commendam, a participant in a limited
liability company or a supplementary liability company or a member of a
production co-operative shall include the participant's (member's) share
of the share (authorised) capital (assets) of the respective partnership,
company or co-operative.
If for an heir to join a business partnership or production
cooperative or for an heir to acquire a share in the authorised capital
of a business company the consent of the rest of the participants in the
partnership or company or members of the co-operative is required under
the present Code, other laws or the foundation documents of a business
partnership or company or a production co-operative, and if the heir has
been refused such a consent he/she shall be entitled to receive from the
business partnership or company or production co-operative the actual
value of inherited share or a portion of the assets pro rata to the
share, in the manner established for such cases by the rules of the
present Code, other laws or the foundation documents of the legal entity.
2. The estate of an investor in a partnership in commendam shall include
his/her share in the share capital of the partnership. The heir to whom
this share has been transferred shall become an investor in the
partnership in commendam.
3. The estate of a participant in a joint-stock company shall
include the shares he/she owned. The heirs by whom these shares have been
taken shall become participants in the company.
Article 1177. Succession of Rights Relating to Participation in
a Consumer Co-Operative
1. The estate of a member of a consumer co-operative shall include
his/her share.
An heir of a member of a housing, dacha or other consumer
co-operative shall be entitled to admittance as member of a respective
co-operative. Admittance to membership in the co-operative shall not be
refused for such an heir.
2. The decision of the issue as to which of the heirs may be
admitted to become a member of a consumer co-operative in the case when
the testator's share has been taken by several heirs and also the
procedure, methods and term for disbursing amounts of money payable to
the heirs who have not become members of the co-operative or for handing
out assets in kind to them in place of the money shall be governed by the
law on consumer co-operatives and the foundation documents of the
respective co-operative.
Article 1178. Succession of an Enterprise
An heir who, as of the date of opening an inheritance, had been
registered as an individual entrepreneur or a commercial organisation
being an heir by will shall enjoy a preferential right in the case of
estate distribution to receive an enterprise incorporated in the estate
to offset his share of inheritance (Article 132), given the observance of
the rules of Article 1170 of the present Code.
If neither of the heirs has the said preferential right or has not
exercised such right, the enterprise incorporated in the estate shall not
be subject to partition and shall come under the share ownership of the
heirs in compliance with the gifts they are entitled to, except as
otherwise required by an agreement of the heirs who have taken the estate
incorporating the enterprise.
Article 1179. Succession of Property of a Member of a Peasant
(Individual) Farm
1. On the death of any member of peasant (individual) farm
inheritance shall be opened and succession shall be accomplished on
general terms, given the observance of the rules of Articles 253-255 and
257-259 of the present Code.
2. If an heir of a deceased member of peasant (individual) farm is
not himself/herself a member of the farm he/she shall be entitled to
receive compensation pro rata to the share of the assets in share
ownership of members of the farm he/she is entitled to. The term for
disbursement of the compensation shall be set by agreement of the heir
with the members of the farm, or if there is no agreement, by a court,
but it shall not exceed one year after the opening of the inheritance. If
there is no agreement between the members of the farm and the said heir
to the contrary, the share of the testator in the assets shall be deemed
equal to the shares of other members of the farm. If the heir is admitted
as a member of the farm the said compensation shall not be payable for
his/her benefit.
3. In cases when on the death of a member of a peasant (individual)
farm the farm is terminated (Item 1 of Article 258), in particular, in
connection with the fact that the deceased had been the sole member of
the farm and neither of his/her heirs wishes to keep running the peasant
(individual) farm, the assets of the peasant (individual) farm shall be
subject to distribution between the heirs according to the rules of
Articles 258 and 1182 of the present Code.
Article 1180. Succession of Items with Limited Alienability
1. Weapons, highly effective and poisonous substances, narcotic
drugs and psychotropic substances and other things with limited
alienability (Paragraph 2 of Item 2 of Article 129) that had been owned
by the testator shall be incorporated in the estate and be inherited on
the general terms established by the present Code. No special permission
shall be required for taking a gift that includes such things.
2. Until the time when the heir obtains a special permission for
such things, measures for ensuring the security of the things with
limited alienability shall be taken in keeping with the procedure
established by law for this kind of property.
If the heir is refused the said permission his/her right of
ownership of such property shall be subject to termination in compliance
with Article 238 of the present Code and proceeds from the sale of the
property less sales expenses shall be payable to the heir.
Article 1181. Succession of Plots of Land
A plot of land or a right of lifetime inheritable ownership of a
plot of land owned by the testator shall be included in the estate and
inherited on the general terms established by the present Code. No
special permission is required for taking a gift incorporating this
property.
In the case of succession of a plot of land or a right of lifetime
inheritable ownership of a plot of land, the succession shall also
include the surface layer of the plot of land (soil), isolated bodies of
water, forest and plants located therein.
Article 1182. Peculiarities of Partition of a Plot of Land
1. The partition of a plot of land belonging to heirs by the right
of common ownership shall be accomplished on the basis of the minimum
size of plot of land set for the participants with a relevant purpose.
2. If the plot of land cannot be divided in the manner established
by Item 1 of the present article the plot of land shall pass to an heir
having a preferential right of obtaining this plot of land as offsetting
his/her share of the estate. Compensation shall be provided to the other
heirs in the manner established by Article 1170 of the present Code.
If neither of the heirs has a preferential right of obtaining the
plot of land or has exercised such his/her right the heirs shall possess,
use and dispose of this plot of land by the right of share ownership.
Article 1183. Succession of Outstanding Amounts of Money Granted to
a Citizen as Means of Subsistence
1. The right to receive the amounts of wage/salary and payments
qualifying as such, pension, stipend, social insurance benefit, damages
for harm to life or health, alimony and other amounts of money provided
to the testator as means of subsistence which had been payable for his
benefit but had not been received in his lifetime shall belong to the
members of the testator's family who had been residing together with him
and also his disabled dependants, irrespective of their having resided
with the deceased or not.
2. Claims for the disbursement of amounts of money under Item 1 of
the present article shall be presented to the persons liable within four
months after the opening of the inheritance.
3. If there are no persons entitled under Item 1 of the present
article to receive outstanding amounts of money that had been owing the
testator or if these persons have not presented their claims for the
disbursement of such amounts of money within the established term, these
amounts of money shall be included in the estate and inherited on the
general terms established by the present Code.
Article 1184. Succession of Assets Granted to the Testator by the
State or a Municipal Entity on Privileged Terms
Means of transportation and other assets granted by the state or a
municipal entity to the testator on privileged terms in connection with
his disability or other similar circumstances shall be incorporated in
the estate and inherited on the general terms established by the present
Code.
Article 1185. Succession of State Awards, Honour and Commemorative
Badges
1. The state awards bestowed on the testator and covered by the
legislation on the state awards of the Russian Federation shall not be
included in the estate. The transfer of the said awards on the death of
the decedent to other persons shall be subject to the procedure
established by the legislation on state awards of the Russian Federation.
2. The state awards that had belonged to the testator which are not
covered by the legislation on state awards of the Russian Federation,
honour, commemorative and other badges, including awards and badges being
part of collections, shall be included in the estate and inherited on the
general terms established by the present Code.
Section VI. International Private Law
Chapter 66. General Provisions
Article 1186. Determining the Law Governing Civil Legal Relations
Involving the Participation of Foreign Persons
or Civil Legal Relations Complicated by Another
Foreign Factor
1. The law applicable to civil legal relations involving the
participation of foreign citizens or foreign legal entities or civil
legal relations complicated by another foreign factor, in particular, in
cases when an object of civil rights is located abroad shall be
determined on the basis of international treaties of the Russian
Federation, the present Code, other laws (Item 2 of Article 3) and usage
recognised in the Russian Federation.
The peculiarities of determining the law subject to application by
the international commercial arbitration tribunal shall be established by
a law on the international commercial arbitration tribunal.
2. If under Item 1 of the present article it is impossible to
determine the law subject to application the law of the country with
which a civil legal relation complicated by a foreign factor is most
closely related shall apply.
3. If an international treaty of the Russian Federation contains
substantive law norms governing a relevant relation, a definition on the
basis of law of conflict norms governing the matters fully regulated by
such substantive law norms is prohibited.
Article 1187. Construction of Legal Terms in the Definition of
Applicable Law
1. When applicable law is being defined legal terms shall be
construed in compliance with the Russian law, except as otherwise
required by law.
2. If, when applicable law is being defined, legal terms that
require qualification are not known to Russian law or are known in
another wording or with another content and if they cannot be defined by
means of construction under Russian law a foreign law may be applied to
the construction thereof.
Article 1188. The Application of the Law of a Country
with Several Legal Systems
In cases when the law of a country where several systems of law are
in effect the system of law defined in compliance with the law of that
country shall apply. If under the law of that country it is impossible to
define which of the systems of law is applicable the system of law to
which the relation is the strongest shall apply.
Article 1189. Reciprocity
1. A foreign law shall be applicable in the Russian Federation,
irrespective of the applicability of Russian law to relations of the kind
in the relevant foreign state, except for cases when the application of a
foreign law on reciprocal basis is required by law.
2. Where the application of a foreign law depends on reciprocity
such a reciprocity shall be deemed to exist unless the contrary is
proven.
Article 1190. Reverse Reference
1. Any reference to a foreign law in compliance with the rules of
the present section shall be deemed a reference to substantive law rather
than the law of conflict of the relevant country, except for the cases
specified in Item 2 of the present article.
2. A reverse reference of a foreign law may be accepted in the cases
of reference to the Russian law defining the legal status of a natural
person (Articles 1195 - 1200).
Article 1191. Establishing the Content of Foreign Law Norms
1. Where a foreign law is applied a court shall establish the
content of its norms in compliance with the official construction,
application practices and doctrine thereof in the relevant foreign state.
2. For the purpose of establishing the content of norms of a foreign law
a court may apply in the established manner to the Ministry of Justice of
the Russian Federation and other competent bodies or organisations in the
Russian Federation and abroad for assistance and clarification or may use
the services of experts.
Persons being party to a case may present documents confirming the
content of foreign law norms to which they refer to substantiate their
claims or objections and provide other assistance to a court in
establishing the content of these norms.
As concerns claims relating to the pursuance of entrepreneurial
activity by parties, the burden of proving the content of foreign law
norms may be vested by a court in the parties.
3. If, despite measures taken in compliance with the present
articles, the content of foreign law norms fails to be established within
a reasonable term, the Russian law shall apply.
Article 1192. Application of Imperative Norms
1. The regulations of the present section shall not affect the
applicability of the imperative norms of the legislation of the Russian
Federation which, due to indication in the imperative norms themselves or
due to their special significance, in particular, for safeguarding the
rights and law-protected interests of participants in civil law
relations, regulate relevant relations, irrespective of the law that is
subject to application.
2. According to the rules of the present section, when the law of
any country is applied a court may take into account imperative norms of
another country closely related to the relationship if under the law of
that country such norms are to govern relevant relations, irrespective of
the law that is subject to application. In such cases the court shall
take into account the purpose and nature of such norms and also the
consequences of their application or non-application.
Article 1193. Public Order Clause
A norm of a foreign law subject to application in keeping with the
rules of the present section shall not be applicable in exceptional cases
when the consequences of its application would have obviously been in
conflict with the fundamentals of law and order (public order) of the
Russian Federation. In such a case a relevant norm of Russian law shall
be applied if necessary.
A refusal to apply a norm of a foreign law shall not be based
exclusively on a difference of the legal, political or economic systems
of a relevant foreign state from the legal, political or economic system
of the Russian Federation.
Article 1194. Retortions
The Government of the Russian Federation may establish reciprocal
limitations (retortions) on the proprietary and personal non-proprietary
rights of citizens and legal entities of the states where special
limitations exist on the proprietary and personal non-proprietary rights
of Russian citizens and legal entities.
Chapter 67. The Law Governing Determination
of the Legal Status of Persons
Article 1195. The Personal Law of Natural Persons
1. The personal law of a natural person shall be the law of the
country of which the person is a citizen.
2. If, apart from being a Russian citizen, a person also has foreign
citizenship, his/her personal law shall be deemed Russian law.
3. If a foreign citizen has place of residence in Russian Federation
his/her personal law shall be deemed Russian law.
4. If a person has several foreign citizenships his/her personal law
shall be deemed the law of the country in which the person has place of
residence.
5. The personal law of a person without citizenship shall be deemed
the law of the country where he/she has place of residence.
6. The personal law of a refugee shall be deemed the law of the
country where he/she has been granted asylum.
Article 1196. The Law Governing Determination of the Civil Legal
Capacity of a Natural Person
The civil legal capacity of a natural person shall be determined by
his/her personal law. In such a case foreign citizens and persons without
citizenship shall possess civil legal capacity in the Russian Federation
in equal measure with Russian citizens, except for the cases established
by law.
Article 1197. The Law Governing Determination of the Civil
Dispositive Capacity of a Natural Person
1. The civil dispositive capacity of a natural person shall be
determined by his/her personal law.
2. A natural person who does not have civil dispositive capacity
according to his/her personal law shall have no right to refer to his/her
lacking dispositive capacity if he/she has dispositive capacity at the
place where the deal was made, except for the cases in which the other
party knew or was obviously supposed to know of the lack of dispositive
capacity.
3. The recognition of a natural person in the Russian Federation as
having no dispositive capacity or as having a limited dispositive
capacity shall be governed by Russian law.
Article 1198. The Law Governing Determination of the Rights of
a Natural Person to a Name
Natural person's rights to a name, the use and protection of a name
shall be determined by his/her personal law, except as otherwise required
by the present Code or other laws.
Article 1199. The Law Governing Tutorship and Guardianship
1. Tutorship and guardianship over minors, adults having no
dispositive capacity or having a limited dispositive capacity shall be
appointed and terminated according to the personal law of the person over
which it is appointed or terminated.
2. The tutor's (guardian's) duty to accept tutorship (guardianship)
shall be determined according to the personal law of the person who is
appointed a tutor (guardian).
3. Relations between a tutor (guardian) and a person under his/her
tutorship (guardianship) shall be determined according to the law of the
country whose institution has appointed the tutor (guardian). However,
when a person under tutorship (guardianship) has place of residence in
the Russian Federation, Russian law shall apply if it is more favourable
for such a person.
Article 1200. The Law Governing Cases of a Natural Person's Being
Declared Missing or Dead
The declaration in the Russian Federation of a natural person as
missing or dead shall be governed by Russian law.
Article 1201. The Law Governing Determination of the Possibility
for a Natural Person to Pursue Entrepreneurial
Activity
The natural person's right to pursue entrepreneurial activity as an
individual entrepreneur, without the formation of a legal entity, shall
be determined by the law of the country where the natural person is
registered as an individual entrepreneur. If this rule cannot be applied
due to lack of a compulsory registration the law of the country of the
main place of business shall apply.
Article 1202. The Personal Law of a Legal Entity
1. The personal law of a legal entity shall be deemed the law of the
country where the legal entity has been founded.
2. In particular the following shall be determined on the basis of
the personal law of a legal entity:
1) an organisation's status as a legal entity;
2) the organisational legal form of a legal entity;
3) the standards governing the name of a legal entity;
4) issues concerning the formation, re-organisation and liquidation
of a legal entity, in particular matters of succession;
5) the content of the legal capacity of a legal entity;
6) the procedure for acquisition of civil rights and assumption of
civil duties by a legal entity;
7) in-house relations, in particular, relations between a legal
entity and its founders;
8) a legal entity's capacity to be liable for its obligations.
3. A legal entity shall not refer to a limitation on the powers of
its body or representative to enter into a deal which is not known in the
law of the country where the body or the representative has entered into
the deal, except for cases when it is proven that the other side in the
deal knew or was obviously supposed to know of the said limitation.
Article 1203. The Personal Law of a Foreign Organisation Not
Qualifying as a Legal Entity under Foreign Law
The personal law of a foreign organisation not qualifying as a legal
entity under foreign law shall be deemed the law of the country where
this organisation was founded.
If Russian law is applicable, the activity of such an organisation
shall be accordingly subject to the rules of the present Code which
govern the activities of legal entities, except as otherwise required by
a law, other legal acts or the substance of the relation in question.
Article 1204. Participation of a State in Civil Legal Relations
Complicated by a Foreign Factor
Civil legal relations complicated by a foreign factor as involving
the participation of a state shall be subject to the rules of the present
section on general terms, except as otherwise established by law.
Chapter 68. The Law Governing Proprietary and Personal
Non-Proprietary Relations
Article 1205. General Provisions Concerning the Law Governing
Rights in Rem
1. The content of a right of ownership and other rights in rem
relating to immovable and movable property, the exercise and protection
thereof shall be determined according to the law of the country where
such property is located.
2. Property shall be classified as immovable or movable in
compliance with the law of the country where such property is located.
Article 1206. The Law Governing the Emergence and Termination of
Rights in Rem
1. The emergence and termination of a right of ownership and other
rights in rem relating to property shall be determined by the law of the
country where such property was located as of the time when the action
was committed or another circumstance occurred which served as a ground
for the emergence or termination of the right of ownership or other
rights in rem, except as otherwise required under law.
2. The emergence and termination of a right of ownership or other
rights in rem relating to a deal concluded in respect of property en
route shall be determined by the law of the country from which the
property has been dispatched, except as otherwise required under law.
3. The emergence of a right of ownership or other rights in rem in
respect of property by virtue of acquisitive prescription shall be
determined by the law of the country where the property was located as of
the time of expiry of the acquisitive prescription term.
Article 1207. The Law Governing Rights in Rem Relating to Aircraft,
Vessels and Spacecraft
An ownership right and other rights in rem in respect of aircraft,
sea vessels, inland navigation vessels, space craft subject to state
registration, the exercise and protection of such rights shall be subject
to the law of the country where such aircraft, vessels and space craft
are registered.
Article 1208. The Law Governing Statute of Limitations
The statute of limitations shall be determined by the law of the
country governing a relation in question.
Article 1209. The Law Governing the Form of Transaction
1. The form of transaction shall be governed by the law of place of
conclusion. However, a transaction concluded abroad cannot be declared
null and void because of a failure to comply with the form, if the
provisions of Russian law have been observed.
The rules set out in Paragraph 1 of the present item shall be
applicable, in particular, to the form of powers of attorney.
2. The form of a foreign trade transaction in which at least one
party is a Russian legal entity shall be governed by Russian law,
irrespective of the place where the transaction was concluded. This rule
shall be applicable, in particular, in cases when at least one of the
parties to such a transaction is a natural person pursuing
entrepreneurial activities whose personal law under Article 1195 of the
present Code is Russian law.
3. The form of a transaction relating to immovable property shall be
governed by the law of the country where the property is located and in
respect of an immovable property recorded in a state register of the
Russian Federation, by Russian law.
Article 1210. Selection of Law by the Parties to a Contract
1. When they enter into a contract or later on the parties thereto
may select by agreement between them select the law that will govern
their rights and duties under the contract. The law so selected by the
parties shall govern the emergence and termination of a right of
ownership and other rights in rem relating to movable property with no
prejudice for the rights of third persons.
2. An agreement of parties as to the selection of law to be
applicable shall be expressly stated or shall clearly ensue from the
terms and conditions of the contract or the complex of circumstances of
the case.
3. Selection of applicable law made by parties after the conclusion
of a contract shall have retroactive effect and it shall be deemed valid,
without prejudice for the rights of third persons, beginning from the
time when the contract was concluded.
4. The parties to a contract may select applicable law both for the
contract as a whole and for specific parts thereof.
5. If it ensues from the group of circumstances of a case that were
in existence as of the time of selection of applicable law that the
contract is actually connected with only one country the parties'
selection of the law of another country shall not affect the imperative
norms of the country with which the contract is actually connected.
Article 1211. The Law Governing a Contract in the Case
of Lack of Parties' Agreement on Applicable Law
1. Where there is no agreement of parties on applicable law, the
contract shall be subject to the law of the country with which the
contract has the closest relation.
2. The law of the country with which a contract has the closest
relation shall be deemed the law of the country where the party
responsible for the performance under the contract of crucial
significance for the content of the contract has its place of residence
or main place of business, except as otherwise ensuing from the law, the
terms or substance of the contract or the group of circumstances of the
case in question.
3. A party responsible for the performance under a contract of
crucial significance for the content of the contract shall be a party
which, in particular, is the following, except as otherwise ensuing from
law, the terms or substance of the contract or the group of circumstances
of the case in question:
1) a seller - in a sales contract;
2) a donor - in a donation contract;
3) a lessor/landlord - in a lease;
4) a lender - in a contract of gratuitous use;
5) a contractor - in a contract;
6) a carrier - in a carriage contract;
7) a forwarding agent - in a forwarding contract;
8) a lender (a creditor) - in a loan (credit) contract;
9) a financial agent - in a case in action assignment financing
contract;
10) a bank - in a bank deposit contract and bank account contract;
11) a custodian - in a custody contract;
12) an insurer - in an insurance policy;
13) an agent - in a contract of agency;
14) a commission agent - in a contract of commission agency;
15) an agent - in a contract of agency service;
16) a franchisor - in a contract of franchise;
17) a mortgagor - in a mortgage contract;
18) a surety - in a suretyship contract;
19) a licensor - in a licence contract.
4. The law of the country with which the contract has the closest
relation shall be as follows, except as otherwise ensuing from law, the
terms or substance of the contract or the complex of circumstances of the
case:
1) for a contract of independent building contractor work and a
contract of independent design and prospecting contractor work - the law
of the country where on the whole the results stipulated by the contract
are created;
2) for a contract of general partnership - the law of the country
where on the whole the activity of the partnership is pursued;
3) for a contract concluded by auction, tender or commodity market -
the law of the country where the auction, tender is held or the commodity
market is situated.
5. A contract that has features of various types of contract shall
be subject to the law of the country with which this contract as a whole
has the closest relation, except as otherwise ensuing from law, the terms
or substance of the contract or the group of circumstances of the case in
question.
6. If internationally accepted trading terms are used in a contract
it shall be deemed, unless there are directions to the contrary in the
contract, that the parties have agreed on their application to their
relations of business transaction usage designated by relevant trading
terms.
Article 1212. The Law Governing a Contract with Participation
of a Consumer
1. Selection of the law governing a contract whereto a party is a
natural person using, acquiring or ordering or intending to use, acquire
or order movable things (works, services) for personal, family, household
or other purposes and not connected with the pursuance of entrepreneurial
activity shall not cause deprivation of the natural person (consumer) of
remedies relating to his/her rights which are provided by imperative
norms of the law of the country where the consumer has place of residence
if any of the below circumstances have occurred:
1) in that country the conclusion of the contract had been preceded
by an offer addressed to the consumer or an advertisement and the
consumer has committed in the same country actions required for the
purpose of entering into the contract;
2) a contract partner of the consumer or a representative of such a
partner has received an order from the consumer in that country;
3) an order for acquisition of movable things, performance of works
or provision of services has been made by the consumer in another country
visited on the initiative of a contract partner of the consumer, if such
an initiative was aimed at encouraging the consumer to enter into the
contract.
2. If there is no agreement of the parties as to applicable law and
if there are the circumstances specified in Item 1 of the present article
the law of the country where the consumer has place of residence shall
govern the contract with the participation of a consumer.
3. The rules established by Items 1 and 2 of the present article
shall not be applicable to:
1) a carriage contract;
2) a work performance contract or a service provision contract if
the work is to be performed or the service to be provided exclusively in
a country other than the country where the consumer has place of
residence.
The exemptions specified in the present item shall not extend to
contracts for the provision of the services of carriage and accommodation
for a single price (irrespective of the inclusion of other services in
the single price), in particular, tourist service contracts.
Article 1213. The Law Governing Contracts Relating to
Immovable Property
1. Where there is no agreement of parties on applicable law in
respect of immovable property, the law of the country with which the
contract has the closest relation shall apply. The right of the country
with which the contract has the closest relation shall be deemed the law
of the country where the immovable property is located, except as
otherwise ensuing from law, the terms or substance of the contract or the
set of circumstances of the case in question.
2. Contracts relating to plots of land, tracts of sub-soil, isolated
bodies of water and other immovable property located on the territory of
the Russian Federation shall be subject to Russian law.
Article 1214. The Law Governing Contracts for the Formation of
a Legal Entity with Foreign Interest
A contract for the formation of a legal entity with foreign interest
shall be subject to the law of the country in which the legal entity is
to be founded.
Article 1215. The Applicability of Law Governing a Contract
The following shall be in particular determined by the law governing
a contract in keeping with the rules of Articles 1210 - 1214, 1216 of the
present Code:
1) the construction of the contract;
2) the rights and duties of the parties to the contract;
3) performance under the contract;
4) the consequences of a default on performance or improper
performance under the contract;
5) the termination of the contract;
6) the consequences of invalidity of the contract.
Articled 1216. The Law Governing Assignment of a Claim
1. The law governing a claim assignment agreement between the
initial and new creditors shall be determined in compliance with Items 1
and 2 of Article 1211 of the present Code.
2. The admissibility of a claim assignment, relations between the
new creditor and the debtor, the conditions for the claim to be presented
to the debtor by the new creditor and also the issue of the debtor's
appropriate performance under his obligation shall be determined by the
law applicable to the claim being the subject matter of the assignment.
Article 1217. The Law Governing Obligations Emerging from
Unilateral Transactions
Except as otherwise required by law, the terms or substance of the
transaction or the set of circumstances of the case in question,
obligations emerging from unilateral transactions shall be governed by
the law of the country where the party assuming obligations under a
unilateral transaction has place of residence or main place of business.
The effective term of powers of attorney and the grounds for
declaring it null and void shall be determined by the law of the country
where the powers of attorney were issued.
Article 1218. The Law Governing the Relations of Payment of Interest
The grounds for collecting, the calculation procedure and the rate
of interest on pecuniary obligations shall be governed by the law of the
country governing a given obligation.
Article 1219. The Law Governing Obligations Emerging as a Result
of Infliction of Harm
1. Obligations emerging as a result of infliction of harm shall be
governed by the law of the country where the action or other circumstance
that has served as ground for damages claim occurred. In cases when the
action or other circumstances caused harm in another country, the law of
that country may be applied if the person causing the harm foresaw or
should have foreseen the onset of the harm in that country.
2. Obligations emerging as a result of infliction of harm abroad, if
the parties are citizens or legal entities of one and the same country,
shall be governed by the law of that country. If the parties to such an
obligation are not citizens of one and the same country but have place of
residence in one and the same country the law of that country shall
apply.
3. After the committing of an action or onset of another
circumstance that entailed infliction of harm the parties may come to an
agreement that the obligation that has emerged as a result of infliction
of the harm is to be governed by the law of the country of the court.
Article 1220. Applicability of the Law Governing Obligations
Emerging as a Result of Infliction of Harm
The following, in particular, shall be determined on the basis of
the law governing obligations emerging as a result of infliction of harm:
1) a person's capacity to be liable for harm inflicted;
2) the vesting of liability for harm in a person who is not the
cause of harm;
3) grounds for liability;
4) grounds for limitation of liability and relief from liability;
5) the methods of compensation for harm;
6) the scope and amount of compensation for harm.
Article 1221. The Law Governing Liability for Harm Inflicted
as a Result of Defects of Goods, Works or Services
1. At the discretion of the victim, the following shall be chosen to
govern a claim for compensation of harm inflicted as a result of defects
of goods, works or services:
1) the law of the country where the seller or manufacturer of the
goods or other causer of harm has place of residence or main place of
business;
2) the law of the country where the victim has place of residence or
main place of business;
3) the law of the country where the works or services have been
completed or the law of the country where the goods were acquired.
The selection of the law at the discretion of the victim from the
options set out in Sub-items 2 or 3 of the present item may be recognised
only in cases when the causer of harm fails to prove that the goods were
brought into the given country without his consent.
2. If the victim did not exercise his right to choose applicable law
as specified in the present article the applicable law shall be
determined in compliance with Article 1219 of the present Code.
3. Accordingly, the rules of the present code shall be applicable to
claims for compensation of harm inflicted as a result of unreliable or
insufficient information on goods, works or services.
Article 1222. The Law Governing Obligations Emerging
as a Result of Unfair Competition
Obligations emerging as a result of unfair competition shall be
governed by the law of the country whose market has been affected by the
competition, except as otherwise required by law or the substance of the
obligation.
Article 1223. The Law Governing Obligations Emerging
as a Result of Unjust Gains
1. Obligations emerging as a result of unjust gains shall be
governed by the law of the country where the enrichment has taken place.
The parties may come to an agreement that the law of the court is to
govern such obligations.
2. If an unjust gain occurs in connection with a legal relation that
exists or is assumed to exist due to which property was acquired, the
obligations emerging as a result of the unjust enrichment shall be
governed by the national law that governed or could have governed this
legal relation.
Article 1224. The Law Governing Succession Relations
1. Succession relations shall be determined by the law of the
country where a testator had his last place of residence, except as
otherwise required by the present article.
Immovable property succession shall be governed by the law of the
country where property is located and succession of immovable property
recorded in a state register of the Russian Federation shall be governed
by Russian law.
2. The capacity of a person to create a will or revoke it, in
particular, in relation to immovable property and also the form of such a
will or will revocation act shall be governed by the law of the country
where the testator had place of residence as of the time of creation of
such a will or act. However, a will or revocation of a will shall not be
declared void because the form has failed to be observed if the form
meets the requirements of the law of the place of creation of the will or
will revocation act or the provisions of Russian law.
President
of the Russian Federation V. Putin
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