Do you know the last time you made a contract? Most likely today or yesterday. And you didn’t even have to sign anything. It could have been just by getting on a tram or going to a bar for a drink. We’ve looked at the different types of contracts and the process of signing them in detail in our article.
Contracts are part of our everyday lives – from the common ones, such as a purchase or lease agreement, to specific types, such as a commission agreement, exchange agreement or share transfer agreement. For example, distance contracts are commonly concluded when buying goods over the internet. An accommodation contract regulates the relationship between the accommodation provider and the guest. A volunteer contract sets out the rights and obligations of volunteers.
A contract is far from being just a document drawn up by lawyers and bearing the certified signatures of both parties. In fact, concluding a contract can be an extremely simple task that anyone can do. It requires two or more parties and their expression of intent to bind each other and to be bound by the content of the contract.
You can never enter into a contract only unilaterally and, conversely, you cannot make a unilateral act a contract. So if someone tells you that they have entered into a “termination of employment by agreement”, that is inaccurate to say the least. On the other hand, a gift agreement is indeed a contract, even though it may seem to you that the donee is not significantly active.
In certain situations, it may be necessary to conclude a contract in advance through a so-called forward contract, which serves to define obligations in advance. As far as commercial contracts are concerned, these are often complex documents that regulate the relationship between business people.
In practice, a contract is concluded when one of the parties makes an offer to the other, which, apart from the content itself, makes it clear who has made it and to whom. If the other party accepts the offer in time, there is an agreement on its content and therefore a contract is concluded.
The offer may take various forms and need not be formal. If the waiter asks you, “Would you like a beer?” and you nod, a contract has been formed. And if he asks, “Would you like another?” and you say yes: “Yes, but only a small one,” the contract is also formed, since a reply with an amendment or a deviation from the original proposal is admissible for the formation of a contract if the other party accepts it.
At other times, the offer may be in the same form whatever the counterparty. The law speaks in this context of a contract of adhesion. It is typically encountered in entities such as banks, operators or energy suppliers that conclude thousands or hundreds of thousands of contracts and need to simplify the process as much as possible. They offer their clients a uniform form, often with reference to their terms and conditions, and the other party has the option of either accepting its content without further ado or going to a competitor (which usually has a very similar proposal). As a client, you can of course choose a mobile tariff or apply for a mortgage of a certain amount, but to discuss payment options other than the prescribed ones, for example, is rather naive.
As this makes clients the weaker party with little influence on the content of the contract, the law protects them with special provisions. For example, if the contract refers to extensive terms and conditions, the other party must be informed of them in advance. If the bank relies on your poor eyesight or laziness and writes the essential terms and conditions on page ten in tiny print, this miniature content will be valid if it has been sufficiently explained to you or if it does not cause you any harm.
Even though you know you cannot change anything about the contract, it is not a good idea to resign yourself to reading its contents. On the contrary, ignorance of possible penalties, contractual fines or deadlines can backfire badly. Often overlooked is the so-called contract extension, which indicates for fixed-term contracts how long the contract will extend beyond the original expiry date.
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Nowadays it is not a problem to conclude a contract remotely. Although you live in Aš, you can buy goods from the Ostrava e-shop via the Internet. Similarly, you can also place an order by phone or choose from a catalogue.
Such contracts are called distance contracts. As this is most often the case with consumer contracts concluded by a business, the weaker party is also protected by special provisions. The entrepreneur must provide relevant information in advance (e.g. about the obligation to pay a deposit, the costs of returning the goods in the event of withdrawal, etc.) and that the consumer may withdraw from the contract within 14 days.
Tip: We have covered online shopping and withdrawal options in a recent article.
In some cases, it can be expected that agreeing the content of the contract will be legally complex and lengthy, or that at the time the parties decide to enter into the contract they do not yet know all the details that the contract should contain (e.g. details of the mortgage in the case of a contract for the sale of a property). However, in order to ensure that both parties have some insurance for their further actions (applying for a mortgage, insuring the apartment to be purchased), a contract for a future contract is concluded in such cases.
The parties agree at least on the general content of the future contract and on the obligation to enter into such a contract upon request. The obligation to conclude the contract upon request may also be enforced in court in the event of the other party’s insistence.
As we have indicated above, you do not need any formalities to conclude a large number of contracts.
The most common form of contract is oral, where the parties verbally define between themselves what rights and obligations they have (“I lend you CZK 10,000 and you pay me back within a month”).
An oral contract is therefore acceptable in terms of form, but it goes without saying that it is better to insist on a written contract in more serious situations in terms of security. In the event of any ambiguity or even dispute between the parties to the contract, the short answer is ‘what is written is given’.
On the other hand, for some cases, the written form of the contract is even mandatory – this applies in particular to real estate contracts (typically a real estate purchase contract). Moreover, in the case of the transfer of real estate, registration in the Land Registry is also required, as it is only through registration that the right of ownership is created.
Sometimes, however, you do not even need to speak for a change to enter into a contract, as long as the intention of the parties is clear from the circumstances. In that case, the conclusion is made by implication, by the very conduct of the parties to the contract. The public transport ride mentioned in the introduction already implies an implied consent to the terms and conditions of carriage and the contract of carriage. You do not have to contact the transport company.
When concluding contracts with a selected group of entities, such as municipalities, regions, the Czech Republic or a public university, the contracts are recorded in the Register of Contracts maintained by the Ministry of the Interior.
The Register of Contracts is used to record contracts concluded by public institutions, which increases transparency in the use of public funds. The Register of Contracts records not only the main contracts but also amendments to contracts.
Subsequent amendments to contracts, if necessary, are usually also concluded in the agreed form. The law establishes a rebuttable legal presumption that the parties do not wish to be bound if this form is not followed.
The above rules apply to contracts in general. In addition, there are a number of individual types of contract, which have special requirements and rights and obligations arising from their conclusion.
The commission contract is popular in situations where the commission agent acts on behalf of the principal but on his own account. Innominate contracts or unnamed contracts allow the parties to enter into an agreement that is not expressly provided for in the Civil Code. Contract prolongation or extension is common in lease or insurance contracts, where the contract is automatically renewed at the end of the initial term. Adhesion contracts, typically offered by banks or operators, often contain fixed terms.
Common types of contracts are:
In addition to the types of contracts defined by law, you can also conclude a different contract, where you can adjust the rights and obligations at your own discretion and need. Your relationship will be governed primarily by the agreed content and only in matters where nothing has been agreed will the provisions for the nearest contract type or the general provisions on contracts apply by analogy. Such contracts are referred to as innominate or unnamed contracts. Such contracts include, for example, a volunteer contract or a reservation contract.
It is precisely in view of the lack of legal regulation in such cases that you should take particular care in the wording of the contract and consider consulting a specialist in the case of contracts of a more substantial impact (such as a property reservation).
Hint: We have also covered borrowing and lending agreements in the article Are you lending money to someone? Write a contract about it.
If we have different ideas about the agreed rights and obligations, or if the other party acknowledges them but does not fulfil them, we usually go to court. An exception is the possibility of going to an arbitrator or arbitration court if we have concluded an arbitration agreement that establishes their jurisdiction.
Model contracts can be found on the internet, but many refer to earlier legislation and in general it is not advisable to consult a professional. Particularly for contracts of a more fundamental nature (such as a real estate purchase, a works contract, a commercial contract, a contract for the transfer of a business share, etc.), a general model cannot cover all the details and individual variations of your particular case.
Contracts are part of everyday life and can be concluded without a formal signature, for example orally or by implication (negotiation). The valid conclusion of a contract always requires the consent of two or more parties and their expressions of intent. Unilateral legal acts cannot be considered as contracts. Some contracts, such as those for real estate, require a written form and registration in the Land Registry. Distance contracts, such as internet purchases, have specific rules and allow consumers to withdraw from the contract within 14 days. Adhesion contracts, typically for banks or operators, protect the weaker party with legal provisions. For long-term planning, a forward contract can be concluded which precedes the main contract and can be enforced in court. Reading the contents of the contract, including the terms and conditions, is crucial to avoid overlooking important provisions such as prolongation or liquidated damages.
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