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Publication date: 17.05.2024
Conclusion of the contract is an important part of any contractual relationship.
ТекстIn Ukraine, the culture of contractual relations plays a significant role in ensuring legal certainty and protecting the interests of the parties. Below are the main reasons why a contract is necessary:
Reasons for concluding a contract.
- 1. Legal certainty: The agreement / contract is an official document that clearly defines the rights and obligations of each of the parties. This helps to avoid misunderstandings and disputes in the future.
2. Protection of rights: In the event of a dispute or non-fulfillment of obligations, the presence of a written contract gives the opportunity to go to court to protect one's rights.
3. Documentary evidence: The contract serves as proof of the agreements between the parties, which is especially important in cases of financial or commercial relations.
4. Regulation of liability: The contract defines the conditions and consequences in case of breach of obligations. This includes fines, damages, etc.
5. Planning and risk management: Due to the clearly defined terms of the contract, the parties can better plan their actions and manage possible risks.
The main elements of the contract. Drafting a contract / contratc development.
- 1. Subject of the contract: Description of what is the object of contractual relations (goods, service, work, etc.).
2. Rights and obligations of the parties: Specific actions to be performed by each of the parties and their responsibilities.
3. Terms of fulfillment of obligations: Terms, order of fulfillment and other important terms.
4. Cost and settlement procedure: Contract price, methods and terms of payment.
5. Liability for non-fulfilment: Fines, penalties and other measures of influence in case of violation of the terms of the contract.
6. Force majeure: Conditions under which the parties are released from responsibility for non-fulfillment of obligations due to circumstances of force majeure.
7. Term of validity of the contract: The period during which the contract remains valid.
The conclusion of a contract is a necessary and useful tool in contractual relations, as it provides legal certainty, protection of the rights of the parties, documentary confirmation of agreements, regulation of liability and effective risk management.
For the successful conduct of business or personal relations, it is important to properly draw up contractual relations and ensure their implementation in accordance with the law.
Today, there are different approaches to understanding the contract. Each of them reflects a certain aspect or function that the contract performs in society and the legal system. Here are the main approaches to understanding the contract:
1. Classical (traditional) approach.
- This approach considers a contract as an agreement between two or more parties aimed at achieving a certain legal result. The main features of the classical approach:
Freedom of contract: The parties have the right to independently determine the content of the contract.
Equality of parties: Absence of coercion, the contract is concluded on a voluntary basis.
Respect for the will of the parties: The contract is considered valid only if there is mutual consent.
2. Institutional approach.
- This approach emphasizes the importance of the contract as an institution of civil law, which has a certain structure and a set of standard elements:
Regulatory function: The contract acts as a tool for regulating the rights and obligations of the parties.
Formalism: Compliance with certain formal requirements for the content and form of the contract.
Stability: The contract ensures the stability of legal relations.
3. Socio-economic approach.
- This approach considers the contract in terms of its impact on social and economic relations:
Social function: The contract contributes to the stability and development of social relations.
Economic efficiency: The contract contributes to the efficient allocation of resources and the achievement of economic goals.
Protection of weaker parties: The importance of ensuring fairness and protecting the interests of weaker parties in contractual relationships.
4. Psychological approach.
- This approach emphasizes the psychological aspects of contractual relations:
Motivation of the parties: Understanding the internal motives and expectations of the parties when concluding the contract.
Trust: The importance of trust between the parties for the successful performance of the contract.
Communication: The role of communication in achieving mutual understanding and agreement.
5. Behavioral approach
- The behavioral approach studies how real behavioral aspects and practices influence the conclusion and performance of contracts:
Real practices: Analysis of the parties' actual actions when concluding and executing contracts.
Context: Influence of external factors, such as the economic environment, culture, social norms.
Different approaches to understanding the contract reflect its multifacetedness and multifunctionality in the legal system and society. The choice of approach depends on the specific situation, goals and context of contractual relations. Each of the approaches has its advantages and can be useful for a deeper understanding and effective application of contract law.
Checking the contract is a critical stage that ensures the protection of the interests of the parties and prevents possible problems in the future. Here are the main aspects to pay attention to when checking the contract:
1. General structure and form of the contract.
- Name of the contract: Corresponds to the essence of the agreements.
Date and place of conclusion: Clearly indicated.
Parties to the contract: Full names of legal entities or names of individuals, their details.
2. Subject of the contract.
- Clear description of the subject: Clear and unambiguous definition of the object of the contract (goods, services, works).
Quantitative and qualitative characteristics: Specific indicators by which the performance of the contract is evaluated.
3. Rights and obligations of the parties.
- Comprehensive list of obligations: The obligations of each party are clearly defined.
Rights of the parties: Opportunities that are provided to each party within the framework of the contract.
4. Terms of performance of the contract.
- Terms of performance: Specific dates or periods of performance of obligations.
Execution Procedure: A detailed description of the execution process, including steps and sequence of actions.
5. Cost and settlement procedure.
- Contract price: Total amount, currency of payment.
Payment procedure: Method, terms and conditions of making payments.
Additional expenses: Expenses that are not included in the basic price, but are subject to payment.
6. Liability of the parties.
- Penalties: Conditions under which fines are imposed for non-fulfillment or improper fulfillment of obligations.
Compensation for damages: A mechanism for compensation for damages caused by a breach of contract.
Terms of termination of the contract: Grounds for unilateral termination of the contract and consequences of such termination.
7. Terms of dispute resolution.
- Venue for Disputes: Jurisdiction of a court or arbitration.
Dispute resolution procedures: Mediation, negotiations, arbitration.
8. Force majeure.
- Definition of force majeure circumstances: Circumstances exempting the parties from responsibility.Procedure in case of force majeure: Notification, evidence, deadlines for fulfilling obligations after the end of force majeure circumstances.
9. Confidentiality.
- Confidentiality Obligations: Types of information subject to protection, scope and duration of confidentiality.
Liability for disclosure: Penalties for breach of confidentiality.
10. Other provisions.
- Changes and additions: Conditions under which changes to the contract are possible and the procedure for making them.
Annexes to the contract: All annexes, specifications, additional agreements, which are an integral part of the contract.
Legal details and signatures of the parties: Presence of signatures of authorized persons and seals (if necessary).
Verification of the contract requires careful analysis of all its provisions. A careful study of each item allows you to avoid legal risks and ensure proper fulfillment of obligations by the parties. Involvement of a lawyer in the contract review process can significantly improve the quality of its analysis and legal security.
Professional analysis of contracts is important for preventing legal risks and ensuring compliance of the terms of the contract with legislation and the interests of the parties. Here are the types of contracts that especially require professional analysis:
1. Commercial contracts.
- Sales contracts: Especially important for large deals involving large sums or specific goods.
Supply contracts: Include complex terms regarding terms, product quality, and sanctions for breach of terms.
Lease agreements: Both real estate and movable property, in particular with long-term obligations and significant financial obligations.
2. Construction contracts.
- Subcontracts: Have complex conditions regarding the performance of works, technical documentation, performance schedules, liability for delays and defects.
General contracting and subcontracting contracts: Involve relationships between different parties to the project, which can be quite complex.
3. Financial contracts.
- Loan agreements: Usually contain complex terms regarding interest rates, repayment terms, penalties for late payments.
Guarantee and suretyship agreements: Have significant legal consequences for guarantors and guarantors in the event of default.
4. Corporate contracts.
- Founding agreements: Establishment of legal entities, in particular joint-stock companies, associations, partnerships.
Agreements on mergers and acquisitions: include conditions for the transfer of assets, liabilities, due diligence.
5. Intellectual property.
- License agreements: Include conditions regarding the use of copyrights, patents, and trademarks.
Agreements on the transfer of intellectual property rights: Related to the purchase and sale of rights that have long-term consequences.
6. Employment contracts.
- Key Employee Contracts: Compensation, Bonuses, Stock Options, Confidentiality and Non-Competition Terms.Collective agreements: Determine working conditions, social guarantees for a significant number of employees.
7. Real estate contracts.
- Real estate purchase and sale contracts: Include terms regarding ownership, encumbrances, and legal defects.
Mortgage contracts: Include conditions regarding real estate pledge, rights and obligations of the parties.
8. International agreements.
- Foreign economic contracts: Include conditions regarding customs, tax obligations, currency control.
International license agreements: Include terms regarding the cross-border use of intellectual property.
Professional analysis of contracts allows you to avoid legal risks, ensure compliance with the law and protect the interests of the parties. The above types of contracts especially need to be scrutinized due to their complexity, financial and legal implications. Involvement of a lawyer or an expert in the analysis of such contracts is advisable and recommended to minimize risks and ensure legal security.
