Sanctions and their influence on contractual obligations in comparative law perspective

Abstract

The article analyzes the problems of sanctions restrictions and prohibitions and their influence on contractual obligations. Sanctions objectively and by their nature affect the economy as a whole and therefore influence on contracts concluded by private persons. However today the study of this issue is carried out mainly in the context of public law but not private law. In English law the problem of legislative restrictions and prohibitions and their influence on the dynamics of a contract has been analysed for more than a century in the context of the doctrine of frustration of purpose of contract. And English law provides the termination of the contract due to its frustration because of the imposed sanctions. The English courts carefully apply this approach and use it only when under the influence of legislative restrictions and prohibitions the very sense of contract changes. It can’t be applicable when just the motives of the party to enter into the contract are not realized. This allows, on the one hand, to protect the interested parties to the contract and on the other hand not to destabilize the civil circulation. In Russian law the article 451 of the Civil Code of the Russian Federation is to decide the problem of the influence of sanctions on contractual obligations. However throughout all the time of existence of this rule Russian courts demonstrate a negative attitude towards it and don’t apply it when it is an adequate regulator of the relations of the parties. Today the Russian law enforcement practice allows the party of the contract only to be released from liability for violation of its obligation on the basis of paragraph 3 of art. 401 of the Civil Code of the Russian Federation in the case when such breach occurred due to the enforcement of sanctions restrictions and prohibitions. At the same time, it is worth to mention that this approach of courts is not unambiguous: often courts refuse to recognize sanctions as a force majeure. And this doesn’t contribute to clarity to the law enforcement the practice of application the rules of paragraph 3 of frt. 401 of the Civil Code of the Russian Federation and protecting the parties to the contract from the influence of external circumstances that they can’t either control or prevent.