Mar 3

When making business contracts, you need to be extra careful about these things

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Do you negotiate with your business partners about making contracts in person?
Is it customary for you to make contracts at such face-to-face negotiations verbally or even implicitly, such as by a handshake?
And you say there were no problems with it before?

In the following paragraphs, we would like to present a little-known institute which can be found in Act No. 89/2012 Coll., the Civil Code, and which is called a “contract confirmation letter“. There is only one section in the Civil Code on this subject, Section 1757, based on which contracting parties may, having entered into a contract in other than written form, confirm the content of the contract made between them in writing.
When a confirmation letter written by either party fairly captures the content of a contract made verbally, deviations in the confirmation letter from the verbal contract are only insignificant and the other contracting party who receives the confirmation letter does not refuse the letter immediately, then it is conclusively presumed that the contract made between the parties has the content as specified in the confirmation letter.
If you negotiate with your business partner verbally, either face-to-face or by phone (e.g. if you make an individual contract or order for delivery of specific products under a framework agreement already made), it is advisable to confirm the verbal contract in writing, to be on the safe side.

You can confirm it by e-mail, summarizing the key points of your verbal agreement.

You should make the written confirmation as soon as possible after making the verbal contract, when the content of the verbal contract is still fresh in the contracting parties’ minds and the parties are able to check that the confirmation letter is congruent with the contract.
The confirmation letter will be a definite proof in case of a potential future dispute about the content of verbal agreement.
Please be careful also when you are in the opposite situation, i.e. when you make a verbal business agreement and the other party sends you a letter of confirmation of the verbal agreement. It is in your interest to pay utmost attention to the confirmation letter immediately.
If you see that the confirmation letter is not congruent with the content of your verbal agreement and it contains several deviations, you need to refuse the content specified in the confirmation letter. Your refusal should be conclusive, i.e. in written form (e.g. via e-mail); no point in objecting by phone that you have not agreed on that. The refusal must be given without undue delay, as soon as you were able to read the confirmation letter.
In the case of refusal of a confirmation letter, it is conclusively presumed that the contract has been validly made with its original content, i.e. as it was made between you and your business partner verbally (or implicitly).
Finally, please note that if you remain silent or if you do not reply to the confirmation letter delivered to you by the other party, it is conclusively presumed that you agree with the confirmation letter and the contract is made in the version outlined in the letter.
Are you not sure about the right course of action in your specific case?
Do you want to be absolutely certain that in your business relationships, you do everything what the law offers and you make use of all protection available?
Or perhaps you have already got into a dispute about performance under a contract and you do not know what the most effective actions to protect your rights are?

You can contact us at info@advokatky.cz or call 224 498 345-6, we are ready to help in any situation.

Mgr. Lenka Slámová, attorney-at-law
Pajerová Sedláčková ADVOKÁTKY s.r.o.
10 February 2022