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INFORMATION LETTER OF THE SUPREME ECONOMIC COURT OF UKRAINE

of April 7, 2008 No. 01-8/211

About some questions of practice of application of regulations of Civil and Economic codes of Ukraine

The Supreme Economic Court of Ukraine performed generalization of the questions which are brought up by economic courts concerning application of regulations of the Civil code of Ukraine (further - the Civil Code of Ukraine) and the Economic code of Ukraine (further - HK of Ukraine) and considers to bring expedient answers to the specified questions to the attention of economic courts.

1. Whether the Civil Code of Ukraine and HK of Ukraine as the general and special laws correspond? What regulations of the code are subject to overwhelming application?

In case of the solution of the matter it is necessary to recognize that in case of law enforcement the law as the regulatory legal act, and the corresponding precept of law or its part by which content it is determined whether this regulation (its part) is special or general is applied not in general.

So, for example, by the general rule of article 293 HK of Ukraine under the agreement of exchange (barter) each of the parties undertakes to transfer to the second party to the possession, complete economic vedaniye or operational management certain goods in exchange for other goods. However, the Civil Code of Ukraine contains special regulations about special type of exchange (barter) which are subject to overwhelming application before article 293 HK of Ukraine. In particular, Article 715 of Civil Code of Ukraine allows exchange of goods for works, services, and Article 716 of Civil Code of Ukraine provides features of legal regulation of the relations which arise based on such agreements.

According to part one of Article 1 of Civil Code of Ukraine the civil legislation governs the personal non-property and property relations (the civil relations) based on legal equality, free declaration of will, property independence of their participants. According to part two of Article 9 of Civil Code of Ukraine features of regulation of the property relations which are reflected as the property relations in the field of housekeeping here can be provided by the law.

According to part one of article 4 HK of Ukraine are not subject of regulation of this Code, in particular, the property and personal non-property relations which are governed by the Civil code of Ukraine, at the same time according to part one of Article 4 of Civil Code of Ukraine of feature of regulation of the property relations of subjects of housekeeping are determined by this Code.

Therefore special regulations of Civil Code of Ukraine which establish features of regulation of the property relations of subjects of housekeeping are subject to overwhelming application before those regulations of Civil Code of Ukraine which contain the corresponding general regulation. For example, rules of part one of Article 232 of Civil Code of Ukraine according to which damages are paid in the part which is not covered with penalties (test penalty) are subject to overwhelming application before rules of part one of Article 624 of Civil Code of Ukraine according to which the penalty is subject to collection in complete size, irrespective of indemnification (penal sum).

At the same time it is necessary to consider that according to part two of Article 4 of Civil Code of Ukraine the main act of the civil legislation of Ukraine is the Civil code of Ukraine. Therefore if regulations of Civil Code of Ukraine do not contain features of regulation of the property relations of subjects of housekeeping, and establish general rules which are not approved with the corresponding rules of Civil Code of Ukraine, it is necessary to apply the rules established by the Civil Code of Ukraine.

2. How to understand the concept "business customs" which contains in Article 7 of Civil Code of Ukraine?

Proceeding from content of part one of Article 7 of Civil Code of Ukraine, business custom is the rule of conduct which is not established by acts of the civil legislation, but is established in the field of business conduct.

The civil code of Ukraine contains the reference to business customs, in particular in such Articles: 529, 531, Item 2 of Article 538, 627, 654, 668, 682, 687, 689, 691, 846, 857, 938, 1014, 1021, 1059, 1068, 1088, 1089, 1099 and so forth.

If the custom is acknowledged as economic court well-known based on part one of article 35 HPK of Ukraine, it does not need proof. In other case in certain sphere of the civil relations, in certain territory and so forth according to Article 33 GPK of Ukraine the party which refers to custom as on the basis of the requirements and objections shall prove custom availability, its application.

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