According to the current civil law, the principle of freedom of contract means a condition without which the development of relations in the economy is impossible. However, this freedom is not unlimited and can be realized only within the limits of established norms.
General Provisions
Article 8 of the country's main law (Constitution), as well as part 1 of article 1 of the Civil Code, states that the principle of freedom of contract means freedom of transportation of goods, provision of services and transfer of funds, freedom of economic activity in general. In this case, the following points should be highlighted:
- The ability to determine the conclusion of the contract yourself.
- The freedom to choose the object with which the transaction is concluded.
- The ability to choose the rights and obligations of participants.
It should be borne in mind that the principle of freedom of contract means:
- Following the prohibitions provided by law.
- Non-violation of the rights and freedoms of other participants.
These features cause difficulties in implementing the principle in practice.
Article 421 of the Civil Code of the Russian Federation
The main theses of what the terms and principle of freedom of contract mean are provided for in article 421 of the Civil Code of the Russian Federation, consisting of five parts, namely:
- Prohibition of coercion to conclude a transaction.
- The freedom to sign an unnamed contract.
- The possibility of signing a mixed contract, examples of which are rent, contract, delivery and so on.
- According to the terms of the contract - non-binding execution of dispositive norms and binding execution - mandatory.
- Gaps in the legislation should be compensated by the adopted legal custom.
Rules and Exceptions
Despite the fact that the principle of freedom of contract means a ban on coercion to sign it, there are exceptions to this rule, which are as follows:
- Appropriate indication in law.
- The result of a voluntary commitment that was made earlier.
Examples of the first exception are:
- A public contract concluded in certain types of activities of an entrepreneur.
- The obligation of the bank to conclude an account agreement with the client.
- Landlord's obligation to conclude a new agreement with a bona fide tenant of a plot of agricultural land.
Examples of the second exception are:
- Conclusion of a preliminary contract.
- The liability arising from the option.
PP YOU RF
The main explanation of what the principle of freedom of contract in civil law means is given in the Resolution of the Plenum of the Supreme Arbitration Court No. 16, as well as in paragraphs 2-5 of Art. 421 of the Civil Code. The basis is a teleological interpretation of what it means to set the goal pursued by the legislator.
According to the legal act, peremptory norms are:
- explicit;
- limited.
Clearly mandatory rules contain a clear prohibition or regulation. At the same time, imperativeness is determined by the necessary protection of one's interests, maintaining balance and regulation.
Dispositive norms are also endowed with individual elements of imperativeness, which is revealed in the principle of permission. However, this is limited.
Such an interpretation (of limitations) is often used by the courts. An example would be the case of the legality of the compensation payment for terminating a lease. The courts initially issued a negative decision. Only after reaching the highest court, the Supreme Court decided on compensation.
The prerogative of the parties, but with limitations
The principle of freedom of contract means the right of the parties to establish suitable provisions of the document that suit the parties.But sometimes it is difficult to predict what restrictions may appear in connection with certain general rights.
For example, in practice, the installation under an agreement (on rendering legal services in court) of additional payments for the result of a case is recognized as contrary to public policy. The reason for this is that it is not possible to establish obligations on the basis of judicial acts.
Another restriction may arise in connection with a violation of the rights of third parties. For example, the right of the debtor to set off the counterclaim during the assignment of the right of claim cannot be violated. Therefore, the new lender must take into account the likelihood that the debtor can declare a set-off based on legal relations with the former lender.
It is also worth mentioning the balance of interests. As an example, take the documents of the Supreme Court. In accordance with the definition of the RF Armed Forces, the penalty is calculated not from the entire amount, but from the amount of the unfulfilled obligation. Otherwise, the creditor will have an advantage over the debtor. At the same time, in the review of practice, the same authority clarifies that the suspension of payments in case of failure to provide a bank guarantee is not a violation of the balance sheet and serves as the realization of the liberties of the agreements.
Considering the fact that the characterization of the principle of freedom of contract means, it must be said about the private restrictions that are provided by law. They are disclosed in the following points:
- Public contract.
- Contract of accession.
- Compulsion to conclude a contract.
- Availability of a license in individual cases.
- State regulation of prices.
- Subject composition.
These provisions need to be considered in more detail.
Public contract
This agreement is concluded between commercial companies, the scope of which is to service all persons who contact them. In this case, the following restrictions apply:
- A commercial company cannot select a counterparty under a public contract.
- It is not allowed to prefer one person over another.
- The terms of the contract should be the same for everyone.
- It is not allowed to refuse to sign a public contract with a consumer.
For example, monopolistic companies cannot refuse to sign a public contract. This obligation applies to the monopolist in the field of the defense complex. It is enshrined in the law "On State Material Reserve" No. 79-FZ.
Contract of accession
In this agreement, the conditions are determined by one party, and could be accepted by the other only through the accession procedure. In this case, the right to declare any controversial points in custody is excluded. Thus, the principle of freedom of contract means that its terms are limited.
The compulsion to conclude
Coercion may occur in cases that are expressly specified in law. Voluntary acceptance of this obligation is also possible. The obligation to conclude a contract arises in the following cases:
- As a consequence of concluding a preliminary agreement.
- When organizing tenders.
- With a public announcement of the award.
- At a public competition.
Availability of a license in individual cases
Separate agreements are concluded only with a permit in the form of a license. In this case, the principle of freedom of contract means that the parties can sign something that will not be valid. A license is required in the following cases:
- For the insurer.
- Financial agent.
- Warehouse for general goods.
- A bank that attracts money for deposits.
State regulation of prices
In some cases, prices must be regulated by government. An example of this is an electricity contract, which sets tariffs in accordance with applicable law, and not by agreement of the parties. If the tariffs rise, then the parties accept the new prices as binding rules.
Subject composition
Sometimes the law provides for the composition of entities that should be parties to the relevant agreements. For example:
- In the supply contract, both one and the other party must be entrepreneurs.
- The lender may be the appropriate credit institution or bank.
- A legal entity is not entitled to conclude a housing lease agreement.
- An individual may not participate in a simple partnership agreement (without IP status).
Unnamed
These types include, for example, investment contracts. At the same time, non-named contracts must be distinguished from those agreements that do not spell out the essential terms of the named type provided for by the Civil Code of the Russian Federation. In the latter case, we should talk about non-concluded contracts.
In practice, there have been many cases of using a claim to declare an agreement null and void. The same justification is often used to protect against claims for enforcement. About this YOU RF issued a letter number 165.
The rules of Part 1 of the Civil Code, as well as the rules relating to certain types of agreements, but if there is a motivation for emergency, apply to an unnamed contract.
Mixed
That the principle of freedom of contract means the test article presents different answers. Most interesting is the case with the mixed agreement. Similar are very common. They include the norms of two or more types prescribed in the Civil Code of the Russian Federation in different chapters. Examples of mixed contracts are the following:
- Rent.
- Buying and selling.
- Contract.
- Credit.
- Supply.
- Other agreements.
Moreover, different sections of the contract apply to different sections. Which should be clarified before conclusion. It is important!
These agreements must be distinguished from complex agreements in which several obligations of an independent nature are enshrined in one document. If we take as an example a supply agreement, then it may include provisions on insurance, transportation, storage and others. This does not require the drawing up of separate agreements, but at the same time does not apply to single obligations under the contract.
Guarantees
In addition to the information that the principle of freedom of civil contract means, it is important to highlight another. So, the agreement is secured by providing guarantees. This is expressed in the following points:
- Recognition of transactions as invalid if it is established that they were concluded through deception, threats or the use of violence.
- The establishment of special measures aimed at protecting the freedom of contract by antitrust rules.
- The onset of criminal liability for acts of a monopolistic nature.
Limits
Limitations also have their limits. In paragraph 2 of paragraph 2 of Article 1 of the Civil Code of the Russian Federation, it is indicated that rights, including freedom of contract, may be limited by law, and only to the extent that the foundations of legislative and social norms must be protected.
Risks and Costs
Due to the fact that the principle of freedom of contract means the possibility of establishing conditions, the parties develop the most appropriate rules. But you should consider the following:
- The court uses restrictions based on general provisions. In order not to encounter unnecessary problems, it is advisable to analyze the judicial practice regarding controversial situations.
- The interpretation of the conditions is not related to what intentions the parties to the contract have. So, if in the agreement their will was stated unclearly, the court may not interpret it properly.
Conclusion
Although the principle of freedom of contract means the right of the parties to choose the most suitable conditions, it is necessary to take into account the general provisions that are enshrined in the Civil Code. This should be especially carefully considered in cases where the terms of the agreement are not typical. Direct prohibitions and certain general provisions applied by courts in controversial situations must be taken into account.
However, despite the limitations, it must be acknowledged that the freedom of contract in the current legislation has expanded compared to the situation that took place earlier. Thus, citizens and legal entities have more opportunities to exercise their rights.