Practicing lawyers are familiar with situations where certain parties decided to conclude an agreement, which led to lengthy negotiations. But by the time of this agreement they already have little idea of the order and content of cooperation, and in order to understand this and plan their steps, the parties need time. In order to prevent this from happening, a preliminary contract is officially concluded between the parties . It is intended to clearly determine the conditions of a future transaction and indicate the date of its implementation.
In the framework of this article, we will direct our attention to the specific features of such an agreement of intent. Details of its conclusion and requirements for its design, aimed at creating clarity in the relationship between the parties, can be seen in Art. 429 of the Civil Code of the Russian Federation. And the comments available to her will help clarify certain points.
Features of legal relations
The legal system of the Russian Federation includes a huge number of completely different legal branches. And one of the most significant among them is the civilian sphere. Its norms coordinate property and non-property relations between equal entities. And to enter into a relationship that is governed by civil law, can both individuals and organizations (legal entities) or the state.
It should be noted once again that the distinguishing feature of this process is the equal rights of the parties and the freedom to conclude contracts. That is, there cannot be an aspect of power and subordination here - the predetermined behavior of one side in relation to the other is excluded only by virtue of its position. In addition, it is not allowed to interfere in the process of evaluating the benefits of a contract of outsiders, which allows parties to freely set the price and other conditions. The conclusion of a preliminary contract also takes place within the framework of the predefined Civil Code of the Russian Federation.
Classic contract concept
In Art. 429 of the Civil Code of the Russian Federation provides information on agreements of a preliminary nature, the features of which will be presented later in the article.
So, the classic type of contract has a certain specificity, and, according to the provisions of Art. 420 of the Civil Code of the Russian Federation, it is a mutual agreement of several parties (two or more), which establishes, terminates or changes their rights and obligations. Moreover, the interest of each of the parties can be satisfied only if the interest of the other party is respected, which gives rise to their common interest in concluding the agreement and its proper execution.
It should also be recalled that the civil law provides for the principle of freedom of contract. Its presence allows the subjects of legal relations to accept agreements of any kind and form, unless this is expressly prohibited by applicable laws.
Thanks to this, the contract has become the most common type of transaction, but often without a preliminary agreement the implementation of the latter is simply impossible.
Art. 429 of the Civil Code of the Russian Federation “Preliminary contract”
So, having analyzed the concept of a classical agreement, we can proceed to a direct analysis of preliminary agreements. As already mentioned above, information about them is enshrined in Art. 429 of the Civil Code of the Russian Federation. It has 6 points, each of which explains their specifics. For example, paragraph 1 of Art. 429 of the Civil Code of the Russian Federation says that a preliminary agreement is an agreement according to which certain entities in the future undertake to enter into another (main) agreement, the terms of which are provided for by the preliminary agreement.
It should be noted that the object of the transaction in the future may be services, property, discounts, etc. Despite the existence of exceptional freedom in the process of concluding a preliminary contract, its parties must take into account certain requirements, which are described in Art. 429 of the Civil Code of the Russian Federation.
What provisions are required?
The legislative features of preliminary agreements determine the specifics of their conclusion. The Civil Code of Russia establishes the requirements that govern the conditions, terms and form of agreements of the type mentioned in the article. Each condition is included in a specific paragraph of Art. 429 of the Civil Code of the Russian Federation. Therefore, to highlight and study in detail such requirements, it is necessary to carry out a theoretical analysis of several parts of the legislative norm.
What should be the form of the contract
Point 2 of Art. 429 indicates that the preliminary agreement is in the same format as the future transaction will have. Thus, a contract of the type presented can be written or notarized.
The oral form of the preliminary agreement is nonsense. If you want to quickly complete the transaction, there is simply no need to sign the preliminary contract, and in other cases it should be executed. It should be noted that the form of the agreement is dictated by the norms of civil law, and if, for example, the Civil Code speaks of the need to conclude a contract in a notarial form, then the preliminary transaction will have the same peculiarity.
In paragraph 2 of Art. 429 of the Civil Code of Russia, in addition, the liability for non-compliance with the requirements for the form is also fixed. Thus, in case of neglect of these rules, the contract will be declared null and void, that is, one that does not have legal force.
Features of the terms and conditions of the preliminary agreement
An agreement of any type concerns any subject and, most importantly, the rights and obligations of the parties that have concluded it. Together, these aspects constitute the terms of the agreement. In addition, this or that contract can have both a designated term of validity and an unlimited term. In any case, these parameters are clearly stated in the agreement.
As for the preliminary contract, the points presented are secured by paragraph 3 and paragraph 4 of Art. 429 of the Civil Code of the Russian Federation. The terms of the agreement must meet the essential points of the main transaction. In other words, the preliminary contract repeats the structure of the agreement, which will be concluded in the future, and also sets its subject. This requirement exists in order to exclude any potential disputes between the parties.
The timing of the preliminary agreement is quite simple. According to the standard rule, it indicates the period obligating to conclude a transaction. In the same paragraph 4 of Art. 429 provides for an exception to the rule - in the absence of a specified deadline, the main contract is signed no more than a year after the date of conclusion of the preliminary agreement.
Legal liability in case of violation
As we understand it, the preliminary agreement contains an obligation to conclude a basic agreement in the future. Therefore, failure to do so will be considered a violation. In this case, certain legal steps provided for in paragraph 5 of Art. 429 of the Civil Code of the Russian Federation. The compulsion to conclude the main contract can be implemented within 6 months from the date of violation of this obligation. Similarly, the legislator creates a legal framework that does not allow neglecting the deadlines for fulfilling the terms of the preliminary agreement.
Of course, there are cases when, even with a preliminary contract, the parties disagree about some aspects of the main transaction. None of us are safe from this, and if they occur, the parties must go to court. Its decision will determine the terms of the main contract, which the entities are required to conclude in the future. In this case, the information provided by a special state authority is binding.
Termination of Obligations (Clause 6, Article 429 of the Civil Code of the Russian Federation)
Not always the parties to the preliminary contract in the future enter into the main. Due to various circumstances, entities may lose interest in the title agreement. And if, within the required period, all parties have not put forward requirements for the conclusion of the main contract, then the obligation to conclude it ceases altogether, as provided for in paragraph 6 of Art. 429 of the Civil Code of the Russian Federation. This can happen due to other circumstances:
- conclusion of an agreement of a basic nature;
- the impossibility of fulfilling an obligation for any objective reasons, etc.
The presented derogation points are prescribed by law due to the presence of real risks when concluding a preliminary contract. The bottom line is that this kind of agreement obliges the parties to take any action in the future. However, for various objective reasons, the main contract may lose its relevance, or the real possibility for its implementation will disappear, which cannot be ignored.
Conclusion
Thus, we have considered art. 429 of the Civil Code of the Russian Federation with comments. In conclusion, it should be noted that the existing legislative requirements for the preliminary contract are very effective in the process of regulating relations arising at the time of the conclusion of such agreements. Therefore, it remains to be hoped that in the future the specifics of this legal category will only improve.