Clients often come to us after signing an unfavorable agreement. Many attorneys in such situations say: “You should have read it more carefully.” We take a different view — there is always a solution.
The Principle of Binding Force of Contracts
The Latin principle Pacta sunt servanda (“agreements must be kept”), inherited from Roman law, remains in full force today. Articles 309–310 of the Civil Code of the Russian Federation (GK RF) guarantee the performance of obligations. However, courts do not always uphold agreements that are defective in form, substance, or consent.
Grounds for Challenging a Contract
Contracts fall into two categories: void (invalid from the moment of conclusion, without any court proceeding required) and voidable (requiring a court declaration of invalidity). The general presumption is that a contract is voidable unless the law specifies otherwise.
For contracts declared invalid, a court generally applies bilateral restitution: each party returns what it received. If in-kind restitution is not possible, monetary compensation is awarded.
Case 1. Challenging a Private Security Company’s Insurance Contract
A private security company had insured its civil liability. We challenged that contract on the basis of Article 932 of the Civil Code: liability insurance for contractual breaches is permitted only in cases expressly provided by law.
The law governing private security activities did not grant such a right — the insurance contract was void. The client recovered two years’ worth of insurance premiums and was awarded reimbursement of litigation costs.
Case 2. Challenging the Sale of a Municipal Excavator
An excavator had been donated to a municipal enterprise by the Governor of Chelyabinsk Oblast for use in carrying out the enterprise’s statutory functions. The enterprise transferred it in satisfaction of private debts.
The court declared the transaction invalid: property received for the purpose of carrying out public functions may not be disposed of in favor of private creditors — this violates the asset’s intended purpose and the municipal enterprise’s obligations to its founder.
Recommendations
- Consult an attorney before filing a claim — a court may deny it if the grounds are insufficient
- Choose a specialist with specific experience in contract disputes — not all attorneys successfully litigate such matters
- Preserve all correspondence — courts recognize unsigned email exchanges as evidence of a contract’s formation
Case numbers are intentionally omitted to protect client confidentiality.
If you have signed a contract on unfavorable terms, do not rush to perform it. Contact us — we will assess the prospects for challenging the agreement and propose a strategy to protect your interests.