Recognition of a contract as invalid and not concluded

According to the Civil Code, a contract can be declared invalid if it contains clauses that contradict Ukrainian legislation.

• they violate the rights of one of the parties;
• were entered into by incapacitated persons;
• were drafted incorrectly (the standard form of the contract was not observed).

When a contract, in the opinion of one of the parties that concluded it, is invalid, but this fact is not established by any normative act, then such a document is voidable. A voidable contract, unlike a void one, requires that its invalidity be confirmed by a court.

Voidable contracts are considered invalid if they:

• were signed under pressure from a party (by any violent, deceptive or other fraudulent methods);
• were concluded by minors, legally incapacitated persons, or persons who were deceived or who could not comprehend the nature of their actions.

All the grounds listed above immediately lead to the inevitable recognition of the transaction as invalid (not concluded). The consequences after a contract is declared invalid can vary. For example, when a court issues a decision declaring a transaction invalid, then, in accordance with the judgment, one of the parties to the previously concluded contract must return to the other party everything it received after fulfilling its obligations. Thus, the recognition of a transaction as invalid, for example a loan agreement, will result for the borrower in the reimbursement of the loan debt, possibly including interest and other penalties. If it is not possible to make such a return, for example in situations when the person on whom certain obligations under the contract were imposed provided some services or performed certain work, then reimbursement will be made in the form of compensation. The amount of such compensation will be calculated according to the prices in the specific service sector that exist at the time of reimbursement.

Filing a claim to declare a contract invalid

The Civil Code states that recognition of a contract as invalid is carried out not in full, but only partially. In other words, the court may annul only certain provisions of the document. In addition, the statute of limitations should be taken into account. A contract can be declared invalid within three years. An exception is when the person who entered into the transaction was subjected to violence. In such cases, a claim to declare the contract invalid can be filed within five years.

As court practice shows, such cases have many nuances and specifics that only a qualified attorney and lawyer can take into account and clarify. Therefore, if you need truly experienced legal specialists, then you should not waste time searching for them, because you can immediately contact the “Nakaz” company in Kyiv.

Recognition of a founding agreement as invalid and not concluded

Moreover, sometimes many disputed situations arise with contracts in the commercial sphere, for example, when a particular person needs to be excluded from the composition of the founders of a certain company. It’s fairly easy to remove a founder who does not care about the company’s affairs. It is much more difficult when such a person begins to take actions that may harm the company. In such a situation, the other founders have the right to go to court to lawfully remove such a person. For this case, an experienced attorney is definitely required, who will be able to gather the necessary evidence base, as well as prove the defendant’s fault during the court hearing.

Things are quite different when the founder’s actions are lawful, although his activity in the company contradicts the law. In this situation, one can find evidence that at the time of the company’s foundation and the signing of the agreement the person who needs to be excluded was incapacitated, could not be accountable for their actions, and was admitted to the founders’ composition illegally. In such cases, there is nothing left to do but to recognize the founding agreement as invalid or not concluded.

As mentioned earlier, recognition of a contract as not concluded or invalid is carried out not fully, but partially. In other words, one can, for example, declare a clause of the contract invalid that concerns a specific founder of the company. For this, a qualified lawyer is required who will competently draft and file a claim to recognize the contract as not concluded, as well as an experienced attorney who will be able to prove in court the need to exclude one of the parties from the founders’ composition.

In such cases, there is often confusion between recognizing part of the founding agreement as invalid and the procedure for excluding one of the participants from the founders’ composition. Sorting out such issues on your own is rather difficult. Therefore you can turn to the help of experienced lawyers from our company, who are always ready to provide legal support in your case.