A bilateral transaction is a transaction in which two parties are involved. It is understood that both parties have mutual rights and obligations with respect to each other. These rights and obligations are prescribed in a special document - an agreement. In this case, the contract can be drawn up both in writing and orally.
What types of deals exist
In addition to bilateral transactions, there are unilateral and multilateral. They differ from bilateral not only in the number of participants, but also in the terms of the contract. So, when concluding unilateral transactions, only one party is liable. For example, the conclusion of transactions for the purchase / sale of securities or currency on the stock exchange. In this case, the responsibility for the result of the transaction lies entirely with the trader, and not with the brokerage company. A brokerage company is not a participating party, it only represents market access and related instruments.
In multilateral transactions involved more than three people. Responsibility for violation of the terms of the contract applies either to all at once, or alternately, if certain conditions arise. For example, if one of the participants in a transaction cannot make a payment, another participant pays for it.
Deal Classification
Unilateral and bilateral transactions are divided into the following types:
- paid and gratuitous;
- real and consensus;
- casual and abstract;
- fiduciary and not fiduciary.
All types of transactions listed above are divided by term of execution into urgent and unlimited. In urgent terms, the period during which the contract is valid is clearly stated That is, during this time, one of the parties must fulfill the terms of the transaction prescribed in the contract. If the contract does not specify the terms and conditions, then the transaction is considered to be unlimited. This means that the deadline is unlimited. However, the agreement implies that it will be completed within a reasonable time.
Paid and gratuitous transactions
Reimbursable bilateral transactions are ordinary transactions when one party is obliged to pay the other or to provide part of the property or service in exchange for services and goods provided. In this case, both parties are responsible. One side is for the quality of the goods provided, the other for timely payment.
Gratuitous bilateral transactions - this is when one transfers the property to another side or provides a service, but does not receive any values in return. In this case, the party providing the property or service bears full responsibility for its quality. For example, when transferring medicines free of charge to someone, the transferring party is responsible for the consequences of their use.
Real and consensus transactions
A consensus transaction is a transfer or exchange under a predefined agreement. Moreover, the rights and obligations of the parties arise immediately after the conclusion of the contract, regardless of whether the subject of the transaction is received or not. An example of a bilateral transaction of this kind can be a contract for the supply of goods to the store. Between the entrepreneur and the supplier, trade relations, rights and obligations appear, regardless of when the first batch of goods was or will be delivered or not.
Actual transactions differ from consensus transactions in that rights and obligations arise not at the time of the execution of the agreement, but immediately after the transfer of the subject of the transaction (money, goods, service) to the other party has been completed and payment has been received. Mutual obligations arise automatically, regardless of whether a contract has been drawn up or not. For example, when buying equipment with warranty service, which takes effect as soon as the purchase is completed.
Casual and abstract deals
Casual is a type of bilateral transactions made with a specific purpose. The purpose of the subject of the transaction and its further use depends on whether it will be recognized as legal or illegal. For example, when buying a firearm. To make such a purchase, it is necessary to collect and provide a package of documents in order to obtain permission. If it turns out that some documents were fake or the weapons were not properly stored and used, then the transaction will be declared illegal.
An abstract transaction is a transaction without reason, when one party only promises the benefits of the transaction, but at the same time a positive or negative result is obtained - it is not known. For example, issuing a bill, payment order. The transaction will be completed only when a certain condition appears. If it does not arise, then the agreement will be canceled.
Fiduciary deals
A fiduciary transaction is a transaction based on a trusting relationship between participants. The advantage of this type of agreement is that the parties can terminate the contract at any time as soon as this becomes necessary. In this case, none of the parties will incur as a result of the termination of any obligations or sanctions. An example of a bilateral transaction of this kind can be called a power of attorney for driving a vehicle.
The basis for canceling the agreement may be the loss of trust or the achievement (loss) of the purpose for which the contract was created. For example, the transfer of property in trust for subsequent sale to third parties. After the property is sold, the contract loses its legal force. The participants in fiduciary bilateral transactions are most often relatives, friends, business partners.
Bilateral transactions between individuals
Private individuals have the right not to draw up written agreements between themselves. But experience shows that it is better to conclude a contract in writing. This will help not only to identify important points, but also to make a transaction safe.
Private individuals are not entitled to draw up transactions on a contractual basis, for example, for the supply of raw materials and materials for production purposes. The amount of the transaction may not exceed 10 minimum wages. Larger transactions must be certified by a notary.
Bilateral transactions between legal entities and individual entrepreneurs
The transaction between legal entities must be necessarily fixed by the contract in writing. The contract should indicate:
- details of the participants;
- rights and obligations of the parties;
- terms of termination or invalidation of the transaction.
Each transaction must be documented, as these documents are used in accounting and tax accounting. A feature of this kind of bilateral transactions is that money is transferred not in cash, but from one current account to another. Contracts are drawn up in the form of strict reporting. If the document is not drawn up correctly, then the transaction may be invalidated. Therefore, entrepreneurs most often use standard forms for this purpose.
Bilateral transactions between banks
A two-way transaction between two banks and between banks and their customers should be distinguished. In the first case, they are no different from transactions between legal entities. Even if operations are conducted between banks of different levels. For example, between commercial and central banks.
When servicing customers, banks draw up special agreements that are different from those that they make in interbank transactions. Such a bilateral banking transaction by the client is not equal in nature. This is due to the fact that the client does not always have sufficient knowledge and skills to manage capital, and banking operations are limited by a small amount of capital.
Legal regulation
The definition of transactions, the procedure for their execution and recognition, as well as a description of cases when and under what conditions they can be accepted as insignificant or terminated, are prescribed in the Civil Code of the Russian Federation. They are covered in articles 153, 162, 169, 170, 171 and 172 of the Civil Code of the Russian Federation.
An invalid transaction does not create any legal consequences. There are two types of such transactions in total - they are disputable and void. It is necessary to distinguish between void and void transactions.
An insignificant bilateral transaction is invalid due to its non-compliance with the rules and laws adopted in the country. Therefore, such a transaction may be terminated in pre-trial order. One or both parties have the right not to comply with the provisions of the agreement, while not bearing any responsibility.
The following is a list of cases in which a transaction can be declared null and void:
- The form and content of the agreement does not comply with Russian law (Article 168 of the Civil Code).
- A bilateral transaction may harm the rule of law and morality (Article 169 of the Civil Code), violate the constitutional rights of another party to the contract.
- An imaginary and feigned transaction (Article 170 of the Civil Code), where the difference between the imaginary and the feigned lies in the fact that the first is done for the sake of the species, the second - to hide the other transaction and get profit from it. As a result, the transaction will be declared invalid, and the lost funds or lost property will be returned.
- A transaction, one of the participants of which is recognized as legally incompetent or juvenile.
However, in some cases, a void transaction may be deemed valid. For example, one party is legally incompetent, but the guardian or relatives may demand that they be recognized if its execution would benefit their ward.
Consequences of invalidation of transactions
The consequence of an invalid bilateral transaction is its termination and reimbursement to the affected party of losses. Damage is compensated in the form of property lost as a result of the agreement or in cash. If both parties have committed an illegal transaction, they will have to indemnify the state if it was damaged as a result. For example, if transactions were made in order to evade taxes or get help from the state illegally. In addition to the lost amount, the guilty party must pay a fine or penalty in the amount specified in the contract.