The Conflict between the Legal Form and the Economic Content of the Contract and Methods of its Resolution on the Example of a Buyout Lease Agreement

Abstract

The paper substantiates that the reason for the collision between the legal form and the economic content of the contract is the discrepancy between the real economic goals of the parties to a particular contract and the goals that the legislator had in mind when constructing the legal structure of the corresponding contract, for example, a lease payment in a buyout lease agreement includes not only payment for the use of the property, as it should be for the lease, but also the redemption value of the property. The author identifies and analyzes three ways to resolve this conflict: re-qualification of the contract as a whole or its individual conditions according to the rules on sham transactions, direct application of the general legal principle of justice and the priority of revealing the actual common will of the parties over the literal interpretation of the contract. It is substantiated that the parties to the contract have the right to use certain contractual structures to achieve uncharacteristic economic goals, if such goals are not illegal.