Contract without legal consequences: problems of the consequences of invalid transactionsand the exerсise of Civil Rights in the Republic of Kazakhstan

Abstract

The article examines a key problem of modern civil law of the Republic of Kazakhstan - the phenomenon of the “contract without legal consequences”, which arises from the application of legal rules governing the invalidity of transactions and the consequences thereof. The paper analyzes the classical model of bilateral restitution established in the Civil Code of the Republic of Kazakhstan, under which an invalid transaction is deemed not to produce legal consequences and everything received under such transaction is subject to return. It is argued that the dogmatic application of this model, aimed at abstract restoration of the parties’ original position, generates systemic contradictions in the conditions of modern property turnover and impedes the effective exercise of civil rights. It is established that, in practice, the institution of the “contract without legal consequences” often conflicts with the principle of good faith, fails to ensure adequate protection of bona fide purchasers and participants in commercial relations, and creates legal opportunities for abuse of rights by allowing parties to evade performance of economically disadvantageous contracts that have already been partially or fully executed. The article provides a comparative legal analysis of alternative approaches to determining the consequences of invalid transactions developed in foreign legal systems. On this basis, the need for conceptual reform of the relevant legal institution in Kazakh law is substantiated - a transition from the formal annulment model (“contract without legal consequences”) to a substantive model based on the principles of corrective and balancing justice, proportionality, and priority protection of good faith conduct. Specific recommendations are formulated for improving legislation and law enforcement practice aimed at overcoming the problem of the “contract without legal consequences”, increasing predictability and stability of civil circulation, and ensuring the unobstructed exercise of civil rights.