The Violation of the Principles of Fairness and Reasonableness for Transactions by the Head of the Organization on Behalf of a Business Company

The purpose of this paper is the analysis of law problems of definition and application of the principles of good faith and reasonableness which are relevant both to doctrine and to the practice as grounds for bringing to responsibility of head of the organization, as well as the related problems of the Institute of civil liability of the head of the organization. The main objectives of this study are: (a) establishing the content of principles of good faith and reasonableness in the theory of civil law; b) identification of the legal nature of the categories of good faith and reasonableness in the context of the grounds of responsibility of the head of the organization; C) the definition of a legal framework of duties of the Director to act reasonably and in good faith, and the consequences of its violation in the transaction; g) the establishment of grounds of civil liability of the head d) identification of the characteristics of liability for breach of the duty to act in accordance with the interests of the company; e) determination of peculiarities of the distribution of the burden of proof of good faith and reasonableness On the basis of the study we made the following conclusion: firstly, the legislator establishes the general principles of good faith and reasonableness, not by introducing a clear definition of these principles; secondly, the judicial practice is also faced with the intertwining of objective and subjective approach. It appears that in each case when establishing liability for Directors a set of criteria of good faith and reasonableness will be different; thirdly, it is proposed to adopt a standard of conduct that should not be in the mental attitude of the head of the organization to their actions, and in the established of distinct actions in accordance with the objective understanding of the category of integrity. The principle of reasonableness, in our opinion, must include some objective measure of expediency.