Drafting and negotiating contracts

Contract – concept / Negotiating the contract / The real effects of a concluded contract / How we can help you

Contract – concept

The contract is the agreement of wills from several natural/legal persons, expressed with a view to producing legal consequences (e.g. sale of an asset, loan of a sum of money, rental of an asset, lease of agricultural land, association to carry out a commercial activity, etc.).

In Romania there are two types of contracts: (i) named contracts and (ii) unnamed contracts.

The named contracts are contracts whose legal form (e.g. manner of conclusion, clauses, effects, modes of termination, etc.) are regulated by various normative acts (e.g. sales contracts, donation contracts, loan contracts, transport contracts, leasing contracts, rental contracts, maintenance contracts, etc.).

In the case of named contracts, it is the law that governs their content, which may be supplemented by the contracting parties in accordance with the law.

Non-nominated contracts are contracts whose legal form is not regulated by various legal acts, but the law allows them to be concluded subject to certain general conditions imposed by law (e.g. contracts by which the parties determine how they will associate in a future company and how they will collaborate in order to make a profit, contracts by which the parties agree to respect certain rights and honour certain obligations as neighbouring owners, etc.).

The major difference between named and unnamed contracts is the content of the contract, where the content of named contracts is predominantly regulated by the law, whereas the content of unnamed contracts is predominantly regulated by the parties to the contract.

Contract negotiation

According to the law, a contract can be concluded either by accepting without reservation an offer to contract or by negotiation.

The negotiation may concern both the nature of the contract (e.g. sale instead of donation) and its terms (e.g. the date and manner of transfer of ownership, the person bearing the risk of the contract, the manner of termination of the contract, the level of damages due in case of breach of contractual obligations, etc.).

Contract negotiation is an extremely important pre-contractual stage because it is here that the parties can obtain the desired effects from the future act to be concluded.

Also, the way in which negotiations on a contract are conducted may be a mechanism by which the terms of the contract can later be interpreted.

In certain situations provided for by law, failure to negotiate may lead to certain legal effects (e.g. in the case of adhesion contracts, questionable clauses are interpreted against the party who proposed them, in the case of contracts concluded with consumers, they are interpreted in their favour, etc.).

Often, the correct negotiation of a contract may require advanced specialist knowledge (e.g. technical, economic or legal), in which case it is advisable to obtain specialist assistance.

The real effects of a concluded contract

At first sight, a contract only produces the legal effects resulting from its terms.

However, there are a number of issues required by law.

In Romanian law, the law gives precedence to the internal will of the parties (what the parties really wanted to contract) over the meaning of the words used (what the parties inserted in the contract).

In other words, where certain terms in a contract are open to different interpretations, in order to clarify their exact content, the internal will of the parties (what the parties wished to establish) will be taken as the starting point, irrespective of the content of the terms used (sometimes even against incorrectly used terms).

Another point worth noting is that a contract, regardless of its type, named or unnamed, will always be supplemented by the relevant legal rules.

This means that a contract, in addition to the effects resulting from its written terms, will also have all the effects that the law recognises, depending on the circumstances.

There are many examples: the fact that a contract for the sale of a property does not mention that it can be terminated in the event of non-payment of the price is supplemented by the legal rules entitling the contract to be terminated in the event of non-payment of the price, the fact that a lease contract does not mention anything about tacit relocation is supplemented by the legal rules on how tacit relocation can operate, the fact that a certain contract mentions that it is an enforceable title is supplemented by the legal rules specifying exactly which acts are enforceable titles, etc.

A final very important point concerns the ineffectiveness of certain contractual clauses because they are prohibited by law.

Depending on the type of contract concluded, the law may impose certain restrictions on certain contractual terms. In these cases, even if the clauses are inserted in the contract and agreed by the parties, they will not produce any legal effects (they will be deemed not to exist in the contract).

How we can help you

Our team of lawyers can give you legal advice on any type of contract:

• legal advice on the nature and effects of the contract you want to conclude;
• legal advice on each contractual clause;
• legal assistance in contract negotiation procedures;
• legal assistance when the contract is concluded.
• Further information on drawing up and negotiating contracts

Additional information on drafting and negotiating contracts