Commercial contracts

Agreements and contracts. Both words are used interchangeably and are interchangeable in the civil law tradition. This is not the case in other legal systems, see for example the Anglo-Saxon legal system.

Contracts in an international setting

Companies do business all over the world. Most contracts are in writing. What types of contracts and contractual systems are used in international trade in goods and services?

In principle, there are two main systems of contract law. The first system is the Anglo-Saxon legal system, which is mainly used in the US, Canada, the UK and the Commonwealth countries. The second legal system is civil law, which is mainly used in countries with a Latin influence, for example in continental and Eastern Europe, South America and some countries in Africa and Asia. The concepts of agreements, contracts and stipulations are in principle used interchangeably in the civil law system.

An agreement under Anglo-Saxon law is a broader concept. All contracts are agreements, but all agreements are not necessarily contracts. Agreements under Anglo-Saxon law are rather exemplary contracts and as soon as both parties execute the agreement, the agreement becomes an enforceable contract.

Oral and written contracts

Is it really necessary to have a written contract? In both legal systems, an oral agreement may be legally binding in the given circumstances. Under Anglo-Saxon law, oral agreements and oral contracts are generally valid and legally binding as long as they are reasonable, fair and agreed in good faith. According to the civil law system, a verbal agreement can even be a contract, as long as it can be effectively demonstrated as such.

The weakness of oral agreements in both legal systems is that it is difficult to prove their existence and that it is difficult to enforce them. Contracts that are clearly written and executed are easier to present as evidence in court than the testimonies of the contracting parties.

Contract process

In most companies, the contracting process can be slow and bureaucratic. Increasing speed, reliability and agility has a direct effect on turnover. Shorter sales cycles are crucial for better cash flow. Our “close deals faster” program allows us to streamline the legal part of your sales process, resulting in a shorter sales cycle, with a direct impact on your revenue.