The main source of law that applies to the sale of goods is the Russian Civil Code. Depending on the particular type of good, other legislation may apply. For example, the Federal Law on Nuclear Energy Use applies to the export of certain equipment for the nuclear industry.

The remedies for unfair contract terms are set out in the Civil Code and further developed by case law.

Rights under the Civil Code cannot be exercised to restrict competition or abuse a dominant market position.

Russia is a party to a number of international treaties regulating the international sale of goods, including the:

Parties to international sale of goods contracts often choose to use the standard International Chamber of Commerce (ICC) International Commercial Terms (Incoterms®). Other standard contractual terms that are not very commonly used include the:

To create a legally binding contract, one party must send the other an offer and the other must unconditionally accept the offer (acceptance). Consideration is not necessary for entering into a contract.

An offer is a statement addressed to a certain person that is clearly stated and expresses the intention of the offeror to enter into the contract. Acceptance is the answer given to the person making the offer, which must be full and unconditional.

The parties must also agree on all the material terms and conditions of the agreement, the list of which depends on the type of agreement. The contract must comply with any formal requirements imposed by law.

Generally, contracts between legal entities must be in written form.

Under the Civil Code, failure to comply with the writing requirement means that a party will not be able to use witness evidence to prove that the contract was concluded and to confirm the contract terms and conditions. By contrast, the written form is mandatory for tax, customs and currency control regulation purposes.

Contracts in electronic form (for example, by exchange of e-mail messages) are also legally enforceable. When presenting digital material in court, securing evidence through a notary is required.

Parties often use a bilingual format for international contracts (Russian and English). This is not a requirement for the contract to be valid. Translation into the Russian language is not required. However, the Russian language is the official language used by the state authorities and the courts. Therefore, translation is required when applying to the state authorities and state courts.

Consideration is not a requirement for creating a legally binding obligation (see Question 2). Price is also not an essential term for international sale of goods contracts.If price provisions are not agreed by the parties, the buyer must pay the price that is usually paid in comparable circumstances for equivalent goods.

However, it is essential for cross-border contracts to indicate the price for customs purposes. If the contract does not specify the price, the parties will face difficulties for determining the customs value of imported goods.

If a contract is silent on the time of payment, the buyer must pay for the goods in full just before or just after the seller performed their obligation to supply the goods.

Generally, the law does not impose any restrictions on the method of payment for goods. Therefore, the parties can choose any method of payment, including letter of credit, bill of exchange, promissory note, or funds transfer.

If a contract is silent on the method of payment, payments must be made by payment orders.

Generally, either party has a right to set-off unless one of the parties is not Russian or the contract provides otherwise.

If an international sale of goods contract involves a foreign party, the parties can determine their obligations in any currency and make payments in a foreign currency. However, there are certain currency control requirements applicable to Russian entities, such as repatriation requirement and obligation to use Russian banks.

Generally, all expenses and costs arising from the performance of an obligation are borne by the party that must fulfil that obligation.

Parties to the contract can choose any type of security mechanism, as Russian law does not provide an exhaustive list of security mechanisms. Unless otherwise agreed by the parties, if a sales contract provides for a credit payment (that is, the obligation to pay the price can be performed after the obligation to transfer the goods), the goods are deemed pledged until the price is paid.

It is commonplace for the parties to rely on Incoterms® to allocate certain expenses, such as transportation and insurance, to either the buyer or the seller. The parties can also agree on other terms for the allocation of expenses.

Generally, the seller must transfer the goods as well as accessories and related documents, such as:

The seller must deliver the goods within the term provided for in the contract. If the term is not established, the obligation to deliver the goods must be performed within seven days from the date of demand, unless otherwise provided in the contract.

If the contract is silent on the method of delivery, the seller can choose any method of delivery.

Unless otherwise specified by the contract, the seller is deemed to have performed its obligation to transfer the goods to the buyer from any of the following:

The buyer must undertake all necessary actions to ensure acceptance of the goods delivered under the contract. The buyer must inspect the delivered goods within the term established by the law, contract or within customary terms. Within this term, the buyer must also check the quality and quantity of the delivered goods and immediately notify the seller in writing of any issues.

Generally, the seller must transfer the goods to the buyer in packaging that is customary for the type of goods in question. The seller must ensure that packaging comply with any applicable mandatory requirements.

Under Russian law, a sale of goods contract creates obligations to transfer the goods and to pay the price. Therefore, the mere conclusion of the contract does not affect the seller's title.

Generally, title to the goods passes to the buyer on transfer of the goods (see Question 4), unless otherwise provided by the contract or the law.

Parties usually incorporate retention of title clauses into their contracts. Retention of title clauses are not subject to formal or registration requirements. There is no well-developed court practice on retention of title clauses. However, the prevailing position is that if the goods are sold to a third party, the seller does not have the right to claim these goods from a bona fide buyer. If the goods are mixed, the seller also does not have the right to claim these goods. In these cases, the seller can sue the buyer for damages.

If the buyer enters a bankruptcy procedure, the seller will retain title to the goods.

Unless otherwise provided by the contract, the risk in relation to the goods passes to the buyer when the seller is deemed to have performed its obligation to deliver the goods in accordance with the contract and the law (Article 459, Civil Code) (see Question 4, Duty of the Seller to Deliver the Goods).

Parties are free to depart from this rule. In particular, they can rely on Incoterms® to govern the passing of risk.

The seller has an implied obligation to deliver goods the quality of which complies with the terms of the contract. In the absence of any specific clause, the seller must deliver goods that are suitable for the purposes for which the goods are usually used. Parties to a contract can establish higher standards of quality. The same applies to sales of second-hand goods.

Generally, product liability is governed by the law chosen by the parties as the governing law of their contract. If Russian law is applicable, the parties' liability is governed by the Civil Code.

The default statutory remedies for delivering defective products are the following:

In the event of a material breach (for example, a fatal defect), the buyer can either:

Product recall is required if the goods:

Remedies available for breach of a sale of goods contract under Russian law are:

The law provides for the principle of full compensation of losses. Therefore, a person can claim for real damages and lost profit.

Additionally, the law provides for compensation of future losses. The buyer can claim the difference between the price of the purchased goods and the price of the terminated contract if both:

The same rules also apply in the case of the buyer's fault.

The amount of damages must be determined with a reasonable degree of credibility. The court cannot refuse to satisfy the claim solely on the basis that the amount of damages could not be determined with a reasonable degree of credibility. The amount of damages is determined by the court considering all the circumstances of the case on the basis of the principles of equity and proportionality.

Generally, the court is bound by the statement of the claim lodged by the claimant. The court will interpret the contract on the basis of the literal meaning of its terms. In cases of uncertainty (for example, mistakes or typos), the court examines other clauses and the whole meaning of the contract. If this does not solve the issue, the court examines the intention of the parties considering the aim of the contract.

Given the general principle of good faith, the parties to a contract must mitigate their losses.

Generally, the court is bound by the statement of claim lodged by the claimant. Therefore, when a buyer claims specific performance, a court cannot award damages instead, and vice versa.

However, the courts can only order specific performance if performance is objectively possible. Therefore, to compel the seller to transfer the goods, the buyer should prove that the goods are in the seller's possession.

When the seller fails to deliver the goods in the quantity agreed by the parties, the buyer can purchase the goods from third parties and claim from the seller all necessary and reasonable costs suffered as a result of this purchase.

Contracts normally provide for penalties and the right of the buyer to terminate the contract for non-delivery of the goods.

In the case of repeatedly late delivery, the buyer has the right to terminate the contract. Additionally, the contract usually provides for penalties for late delivery.

In the case of late delivery, a buyer is entitled to contractual penalties accrued until the goods are delivered and/or damages even if they accept the goods.

See Question 8.

In all cases, the buyer can claim damages from the seller, unless otherwise established by the contract.

A buyer is not entitled to remedies for breach of terms regarding quality in the following cases:

In the case of repeatedly late payment, the seller can terminate the contract. Additionally, statutory interest is accrued on the defaulted monetary obligation (which is equal to the average interest rate for deposits of natural persons). Contracts also usually provide for penalties for late payment.

In all cases, the seller can also claim damages from the buyer, unless otherwise established by the contract.

Additionally, the goods are pledged until the price is paid in full, unless the contract provides otherwise (see Question 3).

Generally, under the principle of freedom of contract, the parties to a contract can exclude or limit their liability (for example, provide for caps or exclude remedies). However, total exclusion of liability is not generally allowed.

Additionally, the parties cannot limit or exclude:

The local courts recognise a choice of foreign law in sale of goods contracts. However, there are rules of direct effect that are applicable regardless of the choice of law.

The law provides for rules of direct applicability that apply regardless of the choice of law. These rules only apply if they contain express wording that they will apply regardless of the choice of law/jurisdiction or they are of special significance. Restrictions under anti-monopoly laws are usually regarded as examples of such rules.

Foreign laws that contradict Russian public policy are not applicable in Russia. For example, a provision in the contract stating that, if the contract is declared void, only one party must return all property and proceeds received under the contract to the other party, will contradict Russian public policy as it would effectively amount to confiscation of property.

If the parties do not make a choice of law, a contract is governed by the law of the seller's main place of business. However, if the contract is obviously closely connected with a certain country, the law of this country applies.

The courts recognise a choice of foreign jurisdiction in a sale of goods contract.

The Civil Code also contains certain rules that apply despite a choice of foreign jurisdiction (see Question 13).

If the parties do not make a choice of jurisdiction, any dispute arising from the contract can be resolved by the Russian state commercial courts if any of the following apply:

The parties can agree to submit to domestic or international arbitration before or after the dispute arises. Arbitration clauses are commonly included in sale of goods contracts. The parties sometimes choose to submit their disputes to Russian courts or foreign courts.

The local courts recognise and enforce arbitral awards made in Russia and in foreign jurisdictions. The courts can refuse to enforce arbitral awards in certain cases (for example, for contravention of public policy).

Russia is a party to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention).

The law provides that the following types of document can be issued by a warehouse:

The main difference between a warehouse receipt and a double warehouse receipt is that the latter consists of two parts:

A warehouse receipt and a double warehouse receipt allow their holders to pledge the stored goods.

Warehouse receipts and double warehouse receipts are negotiable documents of title, meaning that they grant the right to dispose of the stored goods. A warehouse certificate only confirms that the respective goods were transferred to the warehouse for storage.

Warehouse receipts and double warehouse receipts must contain the following information:

A document that does not comply with these requirements is not regarded as a warehouse receipt or double warehouse receipt. It merely serves as evidence of a transfer of certain goods for storage.

Warehouse receipts do not require authorisation from any regulatory agencies and cannot be registered with any authorities.

The owner of the goods can pledge them regardless of whether the goods are stored in a particular warehouse.The owner of the goods is also entitled to all income deriving from the goods received by the warehouse during storage.

A warehouse can sell stored goods after written notice to the owner if the latter fails to collect the goods on expiration of the contract.

There are no impending developments or proposals for reform of national legislation affecting sale of goods contracts or storage of goods.