The Mechanism for Convalidation of a Contract entered into due to Misrepresentation, with the Consent of the Counterparty to Maintain its Force

The paper scrutinizes the mechanism for a contract convalidation, enshrined in paragraph 4 of Article 178 of the Civil Code of the Russian Federation, which has a wide scope of application and is a manifestation of the principles of good faith and stability of contract. Particular attention is given to the study of a controversial issue as to legal and factual basis for the convalidation of a contract concluded due to misrepresentation, when the counterparty of the person in representation expresses their consent to maintain the validity of the contract under the changed terms. The author proceeds from the grounds that the interpretation of the rehabilitation mechanism as contractual is unfounded (clause 4 of Article 178 of the Civil Code of the Russian Federation is devoted to changing the terms of a contract under the control and with the assistance of the court; this, however, does not exclude the possibility of extrajudicial revision of contractual provisions by agreement of the parties). The rationality of the retroactivity of the updated terms of the contract is proven, but as a general, not an exclusive rule (according to the author, it would be justified to recognize the court’s ability to extend the effect of the transformative decision in whole or in part to the future). The study of the issue of the conjugation of the provisions of paragraph 4 of Article 178 and Article 157.1 of the Civil Code of the Russian Federation ends with the conclusion that it is inappropriate to qualify the consent of the counterparty of the mistaken party as a type of approval (in the sense of Article 157.1 of the Civil Code of the Russian Federation).

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