Comparative legal analysis of the categories of “abuse of rights” and “abuse of freedom of contract” (fraudulent transaction)

In the article, the author conducts a comparative legal analysis of the concepts of “abuse of rights” and “abuse of freedom of contract” within the context of fraudulent transactions in Ukraine. The study underscores the significance of examining transactions as one of the most intricate constructs in civil law theory and practice. In the contemporary era of societal digitalization and the ongoing development of democracy, there is an urgent need to establish effective mechanisms to facilitate the exercise of individuals’ subjective rights and obligations. Civil rights and obligations, including transactions, are an integral part of this process. The author identifies that, at present, individuals often engage in abuse of rights when formalizing their relationships through traditional forms, such as transactions. It is further noted that the Ukrainian legislator has yet to define the concepts of “abuse of right” or “abuse of freedom of contract”, a significant legislative gap, particularly in the context of fraudulent transactions. The article establishes that the concept of “abuse of right” in the context of fraudulent transactions in Ukraine constitutes a distinct manifestation of a breach of the principle of good faith, as enshrined in Article 3 of the Civil Code. Specifically, harm to the creditor's interests is indicative of the individual's unfair conduct. In contrast, the study demonstrates that “abuse of freedom of contract” within fraudulent transactions may constitute a criminal offense. The intentional actions of the individual who abuses the freedom of contract, alongside the underlying intent, serve as both the causes and consequences of such abuse. The author concludes that the primary distinction between the concepts of “abuse of right” and “abuse of freedom of contract” lies in the presence of a conscious purpose (goal) in cases of abuse of freedom of contract. Conversely, abuse of right occurs when an individual’s conduct exceeds the limits of their subjective rights, especially in instances where such limits are not defined by a specific prohibitive legal rule.