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The Civil Code of the Russian Federation

(with the Additions and Amendments of February 20, August 12, 1996,
October 24, 1997, July 8, December 17, 1999, April 16, May 15,
November 26, 2001, March 21, November 14, 26, 2002,
January 10, March 26, November 11, December 23, 2003)

Part II
Section IV
Chapter 42
Loans and Credits
_ 1.
Loans
_ 2.
Credit
_ 3.
Credit Against Goods and Commercial Credit

Chapter 42. Loans and Credits

_ 1. Loans


Article 807. The Loan Agreement


1. Under the loan agreement one party (the lender) shall transfer into the ownership of the other party (borrower) money or things marked by generic features, while the borrower shall undertake to return to the lender the same sum of money (the loan amount) or the equal quantity of things of the same type and quality. A loan agreement shall be deemed concluded from the moment the money or things are transferred.
2. Foreign currency and currency values may be a subject of a loan agreement on the territory of the Russian Federation with the observance of the rules of Articles 140, 141 and 317 of this Code.

Article 808. The Form of the Loan Agreement


1. A loan agreement between individuals shall be concluded in writing, if its sum of money exceeds in more than ten times the statutory minimum amount of wages or salaries and regardless of the sum of money in case where the lender is a legal entity.
2. In acknowledgment of a loan agreement and its terms and conditions the borrower's receipt or another document certifying the transfer of a definite sum of money or a certain quantity of things may be presented.

Article 809. Interest Under the Loan Agreement


1. Unless otherwise stipulated by the law or the loan agreement, the lender shall have the right to receive from the borrower interest for the sum of the loan in the amount and in the procedure, specified by the agreement. In the absence in the agreement of a clause on the amount of interest, the latter shall be determined by the rate of bank interest (the rate of refunding) in the place of residence of the lender or in the place of the location of the legal entity, if the latter is the lender, on the day of payment by the borrower of the sum of debt or its appropriate part.
2. In the absence of a different agreement interest shall be paid out every month up to the day of the return of the sum of the loan.
3. The loan agreement is supposed to be interest free, unless otherwise stipulated expressly in cases where: the agreement is concluded between individuals for the sum of money that does not exceed the five-fold amount of the statutory minimum wage or salary and is not connected with the business activity of at least of one of the parties;
under the agreement other things, marked by generic features, and not money are transferred to the borrower.

Article 810. The Borrower's Obligation to Return the Loan Agreement


1. The borrower shall be obliged to return to the lender the received loan amount in the period and in the order, prescribed by the loan agreement. In cases where the term of the return of loan amount is not fixed by or determined by the time of demand, the loan amount shall be returned by the borrower during 30 days since the day of the making by the lender of the claim, unless otherwise stipulated by the contract.
2. Unless otherwise stipulated by the loan agreement, the amount of an interest-free loan may be returned by the borrower short of the term. The loan amount given on interest may be returned short of the term with the consent of the lender.
3. Unless otherwise stipulated by the loan agreement, the loan amount shall be deemed to be returned at the time of its transfer to the lender or of the charge of corresponding pecuniary means to his bank account.

Article 811. The Consequences of Breaking the Loan Agreement by the Borrower


1. Unless otherwise stipulated by the law or the loan agreement, in cases where the borrower fails to return on time the loan amount, interest on this sum of money shall be subject to payment in amount, envisaged by Item 1 of Article 395 of this Code, from the day when it should have been returned to the day of its return to the lender, regardless of the payment of interest, specified by Item 1 of Article 809 of this Code.
2. If the loan agreement provides for the return of the loan in parts (by instalment), then with the breach by the borrower of the period, fixed for the return of the regular part of the loan, the lender shall have the right to demand the anticipatory return of the entire remaining sum of the loan together with interest due to him.

Article 812. The Contesting of a Loan Agreement


1. The borrower shall have the right to contest the loan agreement due to the lack of money by proving that money or other things have not been received by him in reality from the lender or received in lesser quantity that it was stated in the agreement.
2. If a loan agreement is to be concluded in writing (Article 808), it shall be impermissible to contest it due to the lack of money by means of witness depositions, except in cases where the agreement was concluded under the influence of fraud, violence, threat or the malicious agreement of the borrower's representative with the lender or the concurrence of hard circumstances.
3. If it is found during the process of contesting by the borrower of the loan agreement due to the lack of money that money or other things have not been received in reality from the lender, the loan agreement shall be deemed to be non-concluded. When money or things have been in fact received by the borrower from the lender in lesser quantity than it is indicated in the agreement, the latter shall be deemed to be concluded for this quantity of money or things.

Article 813. The Consequences of the Loss of the Security of the Borrower's Obligations


In case of default by the borrower on the obligations, stipulated by the loan agreement, to secure the return of the loan amount, and also in case of the loss of the security or of the deterioration of its conditions due to the circumstances for which the lender is not answerable, the lender shall have the right to demand from the borrower the anticipatory return of the loan amount and the payment of interest due to him, unless otherwise stipulated by the agreement.

Article 814. Special-purpose Loan


1. If a loan agreement is concluded with the proviso of using by the borrower the received pecuniary means for certain purposes (special-purpose loan), the borrower shall be obliged to ensure the possibility of exercising control by the lender over the special-purpose use of the loan sum.
2. If the borrower fails to fulfil the clause of the loan agreement on the special-purpose use of the loan, and also if he breaks the obligations, provided for by Item 1 of this Article, the lender shall have the right to demand from the borrower the anticipatory return of the loan sum and the payment of interest due to him, unless otherwise stipulated by the agreement.

Article 815. The Bill


In cases where in accordance with the agreement of the parties the borrower has passed the bill certifying the obligation of the drawer of a bill, not stipulated by anything (promissory note), or of any payer, indicated in the bill (bill of exchange), to pay out the pecuniary sums borrowed at maturity, specified by the bill, the relations of the parties under the bill shall be regulated by the law on the promissory note and the bill of exchange.
Since the time of the issue of a bill the rules of this paragraph may be applied to these relations inasmuch as they do not contradict the law on the bill of exchange or the promissory note.

Article 816. The Bond


In cases envisaged by the law or other legal acts the loan agreement may be concluded by means of the issue and sale of bonds.
A bond shall be recognized the security that certifies the right of its holder to receive the nominal value of the bond or any other property equivalent from the person, who has issued the bond, in the period specified by it. The bond shall also give to its holder the right to receive the interest fixed in it of the nominal value of the obligation or any other property rights.
The rules of this paragraph shall apply to the relations between the person who has issued the bond and its holder inasmuch as unless otherwise stipulated by the law or in the order established by it.

Article 817. The State Loan Agreement


1. Under the state loan agreement the role of the borrower shall be played by the Russian Federation or its subject, while that of the lender shall be played by an individual or a legal entity.
2. State loans shall be voluntary.
3. A state loan agreement shall be concluded through the acquisition by the lender of the issued state bonds or other government securities certifying the right of the lender to receive from the borrower the pecuniary means lent to him or, depending on the loan terms, other property, fixed interest or other property rights within the periods of time, specified by the terms of the floated loan.
4. It shall be impermissible to change the terms of a floated loan.
5. The rules for the state loan agreement shall be applied accordingly to the loans issued by a municipal body.

Article 818. Novation of a Debt by Its Acknowledgment


1. Under the agreement of the parties the debt which has arisen from purchase and sale, the lease of property or on any other ground may be replaced by the acknowledgment of the debt.
2. The novation of the debt by its acknowledgment shall be carried out with the observance of the requirements for novation (Article 414) and shall be done in the form, specified for the conclusion of a loan agreement (Article 808).

_ 2. Credit


Article 819. The Credit Agreement


1. Under the credit agreement the bank or any other credit organization (creditor) shall undertake to grant monetary means (credit) to a borrower in the amount and on the terms, stipulated by the agreement, while the borrower shall undertake to return the received sum of money and pay interest on it.
2. The rules specified by the first paragraph of this Chapter shall be applied to the relations covered by the credit agreement, unless otherwise stipulated by the rules of paragraph one of the present Chapter and unless the contrary follows from the substance of the credit agreement.

Article 820. The Form of the Credit Agreement


A credit agreement shall be concluded in writing.
The non-observance of the written form shall invalidate the credit agreement. Such agreement shall be deemed to be null and void.

Article 821. The Refusal to Grant or Receive Credit


1. The creditor shall have the right to refuse to grant to the borrower a credit in full or in part, as envisaged by the credit agreement in the presence of circumstances which expressly testify to the fact that the sum of money given to the borrower will not be returned in due time.
2. The borrower shall have the right to refuse to receive credit in full or in part by notifying the creditor about this until the time fixed by the agreement, unless otherwise stipulated by the law, other legal acts or the credit agreement.
3. If the borrower contravenes the obligation of a special-purpose use of credit (Article 814), provided for by the credit agreement, the creditor shall also have the right waive the further crediting of the borrower under the agreement.

_ 3. Credit Against Goods and Commercial Credit


Article 822. Credit Against Goods


The parties may conclude a contract providing for the obligation of one party to give to the other party things defined by generic features (the agreement on credit against goods). The rules of the second paragraph of this Chapter shall be applicable to such agreement, unless otherwise stipulated by such agreement and unless the contrary follows from the substance of the obligation.
The conditions on the quantity, assortment, completeness, quality, tare and/or packing of given things shall be implemented in accordance with the rules governing the contract of sale (Articles 465-485), unless otherwise stipulated by the agreement on credit against goods.

Article 823. Commercial Credit


1. Contracts whose execution is associated with the transfer to the other party of sums of money or other things, defined by generic features, may provide for the granting of credit, including that in the form of advance, prepayment, deferment or instalment payment for goods, works or services (commercial credit), unless otherwise stipulated by the law.
2. The rules of this Chapter shall be applicable to commercial credit, unless otherwise stipulated by the rules on the agreement which has given rise to the appropriate obligation and unless this contradicts the substance of such obligation.

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