Contracts
A contract is an attempt to write a relationship down in advance: a well-drafted text has already said what the parties will do when something goes wrong. This page brings together the firm's contract work across its different practice areas — from employment agreements to distribution and supply arrangements, from data processing agreements to licence and assignment documents, and from shareholders' agreements to executive incentive plans.
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Frequently Asked Questions
Do we have to sign the other side's standard contract as it is?
No. Standard contracts can be negotiated, and often should be. Terms prepared in advance and presented unilaterally by one party are subject to separate scrutiny under the law as "general terms and conditions": a term you were not informed of, or had no opportunity to review, may be deemed not to have been agreed. That protection is limited, though; the real safeguard is reading the liability, termination and penalty clauses before signing and putting them on the table.
Is a verbal agreement or an e-mail exchange a valid contract?
For most commercial contracts, yes: unless the law requires a specific form, the contract is formed as soon as the parties agree. Some contracts, however, must be in writing or in official form (for example non-compete clauses, guarantees and sales of real estate), and they are void if that form is not followed. Even where no form is required, the real issue is proof: without an orderly written text showing what was agreed, enforcing your rights in a dispute becomes very difficult.
If we include a high penalty clause, can the court reduce it?
That depends on who the debtor is. For a debtor who is not a merchant, the judge may reduce a penalty found to be excessive. A party that undertook the obligation as a merchant, however, cannot ask for the penalty to be reduced on the grounds that it is excessive. The amount should therefore be set with the parties' status in mind and in proportion to the loss realistically expected.
Can we choose which law governs a contract with a foreign company?
Where a contract has a foreign element, the parties can as a rule choose the governing law and where disputes will be resolved (courts or arbitration). If no choice is made, the governing law is determined by the conflict-of-laws rules, and the outcome is not always predictable. In areas that protect a weaker party, such as consumer and employment contracts, this freedom of choice is limited.
How often should we review our existing contracts?
Less on a fixed schedule than in response to change. When legislation changes, when the business model or product range changes, when entering a new market, or when a contract has been renewing automatically for years, it is time for a review. The most common risk we see is non-compete, exclusivity and liability clauses written years ago whose content no one remembers any more.
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