ABSTRACT
A contract in Russia is deemed to serve the foundation for business activities. Article 420 of the Russian Civil Code says that the contract shall be understood as an agreement between two or several parties on establishing, modifying, or terminating civil rights and obligations. The key principle underlying contractual relations in Russia is the principle of contractual freedom. A great variety of contracts are currently concluded in the Russian Federation. Despite significant differences between them, they could nevertheless be classified by various grounds. The counterparty of a corporate entity shall be the opposite party to the contract. A corporate entity's interaction with other entities that does not give rise to contractual relations shall not qualify the entities as counterparties. It is necessary to check the potential counterparty, because choosing an improper counterparty can have negative consequences. That is why due diligence is an integral aspect of selecting the counterparty to a contract. The contract shall be considered concluded if both parties manage to reach an agreement on all essential terms of the contract in the form required in appropriate instances. There is a widespread sense that the contract includes three groups of terms: essential, ordinary, and accidental. Contractual legislation consists of imperative legal norms that do not imply any chance of changing them and dispositive norms that can be changed by the parties while in contract negotiation. The procedure of preparing a contract includes several stages, with every stage being highly relevant for further proper implementation of contractual terms and conditions. When concluding a contract with a foreign counterparty, two important aspects must be taken into account: applicable law and working language. Business entities are subject to mandatory requirements for making major and related-party deals (transactions). They have to be approved by the supreme body of the corporation. Violation of the prescribed approval procedure may make any completed deals invalid. However, the approach to this issue stipulated in the Russian law is not formalistic: lack of consent to the deal does not automatically entail its invalidity, which provides the stability of contractual entrepreneurial relations. While establishing or performing an obligation and after its termination, the parties shall act take into account the rights and legal interests of each other, providing mutual support in achieving the goal of an obligation, as well as providing each other with the relevant information. Unilateral refusal to fulfill an obligation, as well as unilateral amendments of its terms and provisions, is prohibited except in cases specified in the Russian Civil Code, other laws, or other regulatory acts. Proper fulfillment of the contract includes not only compliance with the terms of an obligation and established requirements, but also scrupulous fulfillment, inability to arbitrarily abandon them, or willfully change them. In some situations a contract can be declared invalid. Contract modification and termination are possible by agreement of the parties unless otherwise specified in the Russian Civil Code, other laws, or the contract. If the parties fail to reach an agreement, they can file a lawsuit. The grounds for the lawsuit are essential violation of a contract by the other party and essential change of circumstances. A demand concerning contract modification or termination may be brought to the court only upon receipt of the counterparty's refusal to agree to the proposal to modify or terminate the contract or nonreceipt of any reply within the period specified in the proposal or established by law or by contract, and in the absence thereof, within a period of 30 days. The most common types of business contracts in the Russian Federation are retail contract, sale of real estate, good delivery, lease of transport and real estate, contractor contract, and contract for compensated rendering of services. Each of them has its own specifics. But at the same time the Russian Civil Code regulates the other types of business contracts, it is also possible to conclude contracts that are not mentioned in the Russian Civil Code.
