LEGAL CONSEQUENCES OF INVALIDITY OF TRANSACTIONS IN THE CIVIL LAW OF UKRAINE: PROBLEMS AND PROSPECTS

Abstract

The article examines the legal consequences of voidance of transactions under the provisions of Ukrainian civil law with due regard to European experience. The authors analyze the main provisions of the Civil Code of Ukraine regulating the issues of void and contested transactions, as well as the court practice of their invalidation. Special attention is paid to the mechanism of restitution, compensation for damages and the possibility of introducing an out-of-court procedure for challenging transactions. The article highlights the efficiency of the existing legal mechanisms for invalidation of transactions, in particular, the complexity of proof, the length of court procedures and the overload of the judicial system. The study uses comparative legal, formal legal and systemic methods of analysis. The authors examine the approaches of Germany and the Netherlands, which provide for an out-of-court method of challenging invalid transactions, which facilitates the prompt and efficient resolution of litigation. The authors of the article define two main categories of contested transactions in Ukrainian law: voidable and contested agreements. While voidable transactions are considered invalid from the outset, contested transactions require judicial intervention to annul them. However, even in cases where the illegality is obvious, litigation is often required, leading to lengthy dispute resolution. Instead, Germany and the Netherlands have introduced out-of-court mechanisms that allow certain contracts to be canceled without court intervention, which greatly simplifies litigation. The study highlights the challenges faced by Ukraine’s judicial system in dealing with contract termination cases, including difficulties with evidence, lengthy court procedures, and unclear rules on restitution and compensation. The study concludes that the introduction of out-of-court mechanisms for resolving contractual disputes in Ukraine could ease the judicial burden and improve legal predictability. In addition, a clearer distinction between restitution and compensation mechanisms would strengthen the protection of the parties’ rights. The findings suggest that harmonizing Ukrainian legislation with European standards would contribute to a more efficient legal system by providing alternative dispute resolution mechanisms. Areas for future research include further analysis of the feasibility of out-of-court dispute resolution in Ukraine, legislative proposals to improve restitution procedures, and an in-depth study of damages models applicable to void transactions.