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Section 1. Civil law
Bilan Аlexander Petrovich, Postgraduate Student of a Ph.D., Koretsky Institute of State and Law of National Academy of Sciences of Ukraine, Kyiv, Ukraine E-mail: obilan1974@gmail.com
RESTRICTIONS ON THE FREEDOM OF CONTRACT BY CATEGORIES "INTERESTS OF THE STATE AND SOCIETY" AND "MORAL FOUNDATIONS OF SOCIETY" IN THE CIVIL LEGISLATION OF UKRAINE
Abstract: Restrictions on the principle of freedom of contract with the purpose of protection of state interests and standards of public morality are common for many continental civil orders. At the same time, such restrictions raise many questions both in the theory of civil law and in the practice of their legal enforcement, considering the evaluative nature of the categories "interests of the state and society" and "moral foundations of society". The purpose of this article is to identify the main approaches to identifying agreements the content of which violates the interests of the state and society and its moral foundations in the civil legislation of Ukraine.
Keywords: civil law, agreements, interests of the state, public morality.
The overwhelming majority of the continen- Ukraine establish that the content of an agreement tal civil laws are aware of the statutory concepts of may not conflict with this Code, other acts of civil restrictions on the freedom of contractual activity legislation, as well as the interests of the state and with the purpose of protection of the interests of society and its moral principles. According to Art. the state or the standards of public morality. In par- 228 of the Civil Code of Ukraine, such agreements ticular, these may include the provisions of Art. 6 of may be declared in a judicial proceeding as invalid. the French Civil Code that prohibit departing from The given group of agreements received the name the laws relating to public order by the conclusion of antisocial and, accordingly, anti-moral in the civil of separate agreements. Paragraph 138 of the Ger- legislation of Ukraine.
man Civil Code states that an agreement that vio- The practical application of the civil law provi-lates good intentions is null and void. Article 169 of sions on anti-social agreements raises many ques-the Civil Code of the Russian Federation according tions that are (primarily) connected with the uncer-to which an agreement concluded with the purpose tainty of the content of the legal categories "interests that knowingly conflicts with the principles of law of the state and society" and "moral foundations of and order is null and void. In its turn, the Civil Law society". In particular, the current civil legislation of of Ukraine also contains relevant provisions, name- Ukraine does not contain a specific legal definition ly, the provisions of Art. 203 of the Civil Code of of the above categories, therefore the content of the
latter is filled in depending on how they are interpreted by the parties to civil transactions and judicial practice.
Problematic issues regarding the restriction of the freedom of contract by the interests of the state and society and its moral foundations have repeatedly been the subject of scientific research. In particular, such native scholars as Dzera O. V., Kuznetsova N. S., Bychkova S. S., and others dedicated their works to these issues.
Thus, during his investigation of the legal consequences of the conclusion of anti-social agreements, Dzera O. V. drew attention to the imbalance of civil legislation provisions which determine the list of agreements that violate public order and establish legal consequences of agreements the content of which conflicts with the interests of the state and society and its moral principles. In connection with this, the scientist suggested to carry out a legislative review of the relevant rules in order to harmonize them and introduce specific types of violations into their text [1, p. 96].
During her investigation of anti-social agreements and the consequences of their conclusion, Kuznetsova N. S. also concluded that the relevant provisions of the civil legislation of Ukraine were not balanced and noted that the provisions of Art. 228 of the Civil Code of Ukraine raise many questions not only in terms of the content but also from the perspective of legal writing [2, p. 67].
In her turn, during her investigation of the consequences of conclusion of agreements with the purpose that conflicts with the interests of the state and society, Bychkova S. S. drew attention to the various consequences of conclusion of an agreement that violates public order (restitution) and an agreement that violates the interests of the state and society (confiscation). In particular, according to the scholar, there should be established identical legal consequences for an agreement that violates public order as well as for an act that conflicts with the interests of the state and society and its moral principles [3].
However, despite the existence of the above scientific researches, as of today the topic of anti-social and anti-moral agreements remains relevant.
As mentioned above, the main problem of legal enforcement of the categories "interests of the state and society" and "moral foundations of society" in the context of the invalidity of agreements is their legislative uncertainty. In particular, the civil legislation of Ukraine lacks provisions that would allow to find out what is covered by the categories "interests of the state and society" and "moral foundations of society". We believe that in this case, it is necessary to pay attention to the provisions of Part 1 of Art. 203 of the Civil Code of Ukraine, according to which the content of the agreement may not conflict with: (1) the Civil Code and other acts of civil legislation; (2) the interests of the state and society; (3) its moral principles. Based on the complex legal analysis of the aforementioned regulation it appears that the legislator does not identify the provisions of civil legislation, the interests of the state and society, and the social morality with each other. Accordingly, the question arises whether the interests of the state and society and its moral principles are covered by legislative regulations or not?
While answering the above question it is necessary to pay attention to the Decision of the Constitutional Court of Ukraine as ofApril 08, 1999, No. 3-rp/99 in the case concerning the representation of the interests of the state in the arbitration court by the Prosecutor's Office of Ukraine. In particular, in the mentioned decision (paragraph 3), the Constitutional Court specified that: public interests are interests related to the need for the implementation of nation-wide actions, programs aimed at protecting sovereignty, territorial integrity, and state control of Ukraine, guaranteeing its state, economic, informational, and ecological safety, protection of land as national wealth, protection of the rights of all subjects of property rights and economic management, etc. [4].
In its turn, the retrospective analysis of the category "interests of the state and society" indicates that
the latter was first secured in the Civil Code of the Ukrainian Soviet Socialist Republic in 1963. Thus, the provisions of Art. 49 of the Central Committee of the Ukrainian SSR established the invalidity of an agreement concluded with the purpose that conflicts with the interests of the state and society. At the same time, Art. 49 of the Central Committee of the Ukrainian SSR did not define anti-social agreements, but only established the consequences arising as a result of the conclusion of such agreements. While determining such agreements, it was necessary to focus on judicial practice. In particular, in paragraph 6 of the Resolution of the Plenum of the Supreme Court of Ukraine "On judicial practice in cases on invalidation of agreements" as ofApril 28, 1978, it was stated that the action ofArt. 49 of the Central Committee of the USSR is applicable to the agreements that violate the general principles of the existing social order. These include, in particular, agreements aimed at using collective, state or private property with a mercenary motive and notwithstanding the law, receiving by the citizens of unearned income, using property owned or used by them against the interests of society, illegal alienation of land or illegal land use, and disposition or acquisition against the established rules of items withdrawn from circulation or limited in circulation. When satisfying the claim in such a case, the court should indicate in the decision what exactly was knowingly contrary to the interests of the state and society about the purpose of the conclusion of the agreement and which of its participants had the intention to achieve this purpose [5]. Later on, the list of anti-social agreements contained in the resolution was expanded, in particular, the agreements on tax avoidance were added to the latter [6].
Consequently, based on the above mentioned it appears that the interests of the state and society are actually covered by public interests and the violation of the latter allows talking about the anti-sociality of an agreement. The above mentioned gives grounds for asserting the identity of the categories "public order" and "interests of the state and society". After all,
based on the aforementioned juridical practice, it appears that the main objective of consolidation in the civil legislation of Ukraine of the category "interests of the state and society" is the protection of public interests. Accordingly, the violation of the interests of the state and society is an action that simultaneously violates public order. This is confirmed by the judicial practice that proceeds from the fact that a contract concluded with the purpose that knowingly conflicts with the interests of the state and society is at the same time one that violates public order, and, therefore, is null and void [7].
Taking into consideration the above, it appears that under agreements the content of which conflicts the interests of the state and society in the sense of Part 1 of Art. 203 of the Civil Code of Ukraine it is necessary to understand those that violate public interests. That said it is necessary to proceed from the fact that the violation of the interests of the state and society is at the same time the violation of "public order". In our opinion, this viewpoint is logical in the context of the provisions of Part 1 ofArt. 203 of the Civil Code of Ukraine that restrict the freedom of contractual activity by the requirements of private law. Such a wording leaves beyond the cited article in the cases when the content of the agreement conflicts with the public interests enshrined primarily in the provisions of public law. In particular, we believe that the provisions ofArt. 203 of the Civil Code of Ukraine regarding the interests of the state and society should apply to the cases when the rules of public law condemn one or other agreement without establishing its nullity. Obviously, in most cases, such agreements would be instruments for committing a criminal offence or administrative violation.
As mentioned above, Part 1 ofArt. 203 of the Civil Code of Ukraine restricts the freedom of contractual activity by such a civil law category as "moral foundations of society". It should be noted that in the Civil Code of Ukraine the moral foundations of society are limited to the exercise of civil rights, the principle of the freedom of contract, property rights, the right to
self-defence, publication of works, terms and provisions of the will, etc. However, despite such a repeated recourse by the legislator to the category "moral foundations of society", he does not provide a specific definition of the latter. The only definition of public morality is given in Art. 1 of the Law of Ukraine "On Protection of Public Morality", according to which public morality is a system of ethical standards and rules of conduct that prevail in a society on the basis of traditional spiritual and cultural values, concepts of goodness, honour, dignity, public duty, conscience, and justice. At the same time, it should be considered that the above definition ofpublic morality is given in the context of the aforementioned law, the scope of which is rather narrow and does not apply to all legal relations without exception.
In scientific and practical comments to Art. 203 of the Civil Code of Ukraine it is stated that the provision of the latter on the obligatory compliance of the content of the agreement with the moral foundations of society cannot be called successful since it will constantly receive different interpretations both in science and in judicial practice. Indeed, in this case, the category of moral foundations of society does not contain sufficient legal characteristics for its unambiguous understanding [8, p. 157]. In view of the above, it is necessary to avoid broad interpretation of the category "moral foundations of society" as this may lead to the arbitrary invalidation of an agreement in which the conduct of its participants does not contain any signs of significant danger to the public. In such circumstances, an agreement that conflicts with the moral foundations of a society should be considered invalid if these moral principles have expressly or generally found their normative consolidation, for example, as stipulated in the Constitution of Ukraine, the Law of Ukraine "On Protection of Public Morality" [9].
Thus, in civil law there is an item in which it is proposed to restrict the category "moral foundations of society" solely by legislative regulations. In our opinion, such an approach cannot be justified,
because in this case, the question arises: why did the legislator separate the category "moral foundations of society" along with the provisions of civil legislation in Part 1 of Art. 203 of the Civil Code of Ukraine? As a matter of fact, if we proceed from the viewpoint of identifying the moral foundations of society with the civil law regulations, then there is no sense in separating the standards of social morality into a separate category. Under such conditions, the legislative regulations alone are sufficient for restriction of the freedom of contractual activity. Obviously, under the standards of morality, the legislator understands something different from the provisions of civil law. To a certain extent, the Constitutional Court of Ukraine answered this question in its decision as of November 02, 2004 in the case No. 1-33/2004 on the constitutional petition of the Supreme Court of Ukraine regarding the compliance of the Constitution of Ukraine (constitutionality) with the provisions ofArt. 69 of the Criminal Code of Ukraine (case on the appointment by a court of a lenient punishment). In particular, the Court drew attention to the fact that one of the manifestations of the supremacy of law is the unrestrictedness of the law by the legislation alone as one of its forms, but it also includes other social regulators, in particular, standards of morality, traditions, customs, etc., which are legitimated by the society and based on the historically achieved cultural level. All these elements of the law are united by a quality that corresponds to the ideology of justice and the idea of the law that to a large extent has found its reflection in the Constitution of Ukraine [10].
Based on the above we can make a conclusion that the civil law is not restricted only to legislative regulations, but also includes other social regulators, in particular, standards of morality, traditions, customs, etc. Accordingly, the standards of morality are understood by the Constitutional Court of Ukraine as a separate category, not identical to the current legislation.
In our opinion, the category "moral foundations of society" includes: (l) moral and ethical provi-
sions that are enshrined in the civil legislation of Ukraine in the form of civil and legal rules; (2) the rules of public morality, which are enshrined in the civil law in the form of civil and legal provisions; (3) the standards of social morality that exist in the society, but have not yet undergone the procedure of consolidation in the civil legislation of Ukraine. In its turn, such a division can become the basis for the identification of agreements the content of which violates the moral foundations of society, namely.
The first group of anti-moral agreements may include those the content of which is aimed at violating the requirements of the Law of Ukraine "On Protection of Public Morality". In particular, these may be the agreements the subject of which is a promotion in the electronic and other media of the cult of violence, cruelty, the spread of pornography, etc. (Article 5 of the Law).
The second group of anti-moral agreements may include those the content of which is aimed at the violation of civil law principles. In particular, these are the agreements the terms of which violate the moral and legal principles of justice, good faith and reasonableness, enshrined in Art. 3 of the Civil Code of Ukraine.
The third group of anti-moral contracts may include those the content of which violates the standards of morality that exist in society and are not yet enshrined in civil legislation. It is hardly possible to give specific examples of such violations. In
particular, these are those provisions of morality to which the court applies, provided that there is an obvious violation and that there are no relevant legal provisions that would resolve the legal relationship in dispute. Thus, Parts 9, 10 of Art. 10 of the Civil Procedure Code of Ukraine provides for the right of the court in cases where the relationship in dispute is not regulated by the law to apply the law that regulates relations with similar content (analogy of statute) and in the absence of such - to proceed from the general principles of the legislation (analogy of law). That said, the procedural legislation prohibits the court to deny petitions on the grounds of absence, incompleteness, unclearness, and inconsistency of the legislation that regulates relationships in dispute. In such conditions, the category "moral foundations of society" may serve as the provision of "final instance" to which courts resort to in the last turn, provided that there is an absence or impossibility of the application of others.
To sum up, attention should be paid to the fact that the cases of the application by the courts of the provisions of Art. 203, 228 of the Civil Code of Ukraine concerning the invalidity of agreements the content of which conflicts with the interests of the state and society are almost absolutely absent in the court practice. This circumstance indicates the need for new, additional research on anti-social and anti-moral agreements. In particular, the development of identifying features that would allow to invalidate them.
References:
1. Dzera A. V. Some Issues of Civil Confiscation Under the Legislation of Ukraine. Almanac of Civil Law: Collection of articles. Issue 4 / Eds. A. Maydanik.- K.: Alerta; TsUL, 2011.- 430 p.
2. Kuznetsova N. S. Invalidity of Contracts (on the issue of anti-social contracts and the consequences of their conclusion). Almanac of Civil Law: Collection of articles. Issue 4 / Eds. R. A. Maidanik.- K.: Alerta; TsUL, 2011.- 430 p.
3. Bychkova S. S. Legal Consequences of Making the Transaction with the Purpose that Conflicts with the Interests of the state and Society / S. S. Bychkova / Private Law and Entrepreneurship. 2016.- Issue 15.- P. 29-34.- URL: http://nbuv.gov.ua/UJRN/Ppip_2016_15_9
4. Decision of the Constitutional Court of Ukraine as of April 8, 1999.- No. 3-rp/99.- URL: https://zakon. rada.gov.ua/laws/show/v003p710-99
5. Resolution of the Plenum of the Supreme Court of Ukraine «On judicial practice in cases on invalidation of agreements» dated April 28, 1978.- URL: https://zakon.rada.gov.ua/laws/show/v0003700-78
6. Explanation of the Supreme Arbitration Court of Ukraine «On certain issues of the practice of resolution of disputes related to the invalidation of agreements» dated 12.03.1999.- No. 02-5 / 111.- URL: https://zakon.rada.gov.ua/laws/show/v_111800-99
7. Decision of the Supreme Administrative Court of Ukraine as of November 25, 2010 No. K-6248/07.-URL : http://www.reyestr.court.gov.ua/Review/13330755
8. The Civil Code of Ukraine: Scientific and Practical Commentary / eds. developers of the project of the Civil Code of Ukraine.- K.: Istina.- 928 p.
9. Scientific and Practical Commentary to Art. 203 of the Civil Code of Ukraine. Writing team of the commentary on the Civil Code of Ukraine. LIGA all-Ukrainian network: ZAKON. URL: http://www. ligazakon.ua
10. Decision of the Constitutional Court of Ukraine as of November 2, 2004.- No. 1-33/2004.- URL: https://zakon.rada.gov.ua/laws/show/v015p710-04
