Legal conditions for concluding contracts

Concluding contracts is an important step in establishing legal relations between the parties. How exactly the agreement will be drawn up and what essential terms are included in it directly affects its legal force and potential consequences. In this article, we will consider the key legal terms of concluding a contract and provide practical advice for the correct execution of the agreement.

What is concluding a contract?

A contract is an agreement between two or more parties that establishes legal obligations. According to Ukrainian law, a contract can be concluded either orally or in writing (simple or notarized). However, a written form is more reliable for minimizing risks and clearly fixing the terms of the agreement. Concluding a contract means reaching an agreement between the parties, which becomes the basis for establishing legal obligations. The contract comes into force only after all essential terms have been agreed upon between the parties.

Essential terms of the contract

In order for a contract to be legally valid, the parties must reach an agreement on its essential terms. “These are the terms of concluding transactions, without which the contract will not be considered concluded," - says lawyer Alina Parhuta. In particular, essential terms include:

• The subject of the contract is what is the purpose of the agreement (for example, goods in a sales contract or a service in a service contract).
• Price - determines the cost of the obligations performed, if this is provided for by the agreement.
• The term of the contract is an important point for many agreements, because without a clear indication of the term of the agreement, it is impossible to correctly regulate relations between the parties.
• Other terms that determine the essence of the agreement are additional points that may be important for a specific type of agreement.

The moment of conclusion of the agreement

It is important to know when exactly the agreement is considered concluded. This depends on the type of contract:

• For real contracts - the contract is concluded when the subject of the contract (for example, goods or money) is transferred.
• For consensual contracts - the contract is considered concluded from the moment of reaching an agreement between the parties and provided that they have expressed their will in a clear form (for example, signing the contract).
• For contracts that require notarization - the agreement enters into force only after notarization.

Main legal terms

• Consent of the parties
  In order for a contract to be concluded, it is important that all parties reach agreement on the key terms of the agreement. Consent must be voluntary, without any external pressure or deception. If one of the parties signs a contract without understanding its terms or under pressure, the agreement may be declared invalid.
• Subject matter of the contract
  The subject matter of the contract must be clearly defined and real. If the subject matter of the contract is described vaguely or not specified at all, the contract may be declared invalid due to the uncertainty of what exactly it is aimed at.
• Methods and conditions of performance of obligations
  The contract must clearly state how the parties will perform their obligations. This includes determining the terms, place of performance and, of course, liability for breach of obligations. Without these details, the contract will not be sufficiently specific.
• Legal personality and authority of the parties
  The parties must have the legal right to conclude agreements. Therefore, it is important to check the legal personality of the counterparty and the authority of the person signing the agreement. For example, the company director has the right to sign contracts only within the limits of his powers, defined by the company’s Charter.
• Legality of the terms of the contract
  All terms of the contract must comply with the requirements of current legislation. If the agreement contains terms that contradict the law or are illegal, its invalidation does not require additional court decisions - such a contract will be considered null and void and will automatically lose its force.

How to avoid mistakes 

1. Check the legal personality of the counterparties. Make sure that the counterparty has all the necessary documents and the signatory has the right to sign the agreements.
2. A clear description of the terms of the contract. Avoid vague wording. Write down all terms in detail to avoid misunderstandings.
3. Involve a lawyer. If you have any doubts about the terms of the contract, engage a lawyer for verification and legal analysis.

Lawgic https://lawgic.com.ua/ provides professional legal support, ensuring the accuracy and legality of each agreement that is concluded.

Conclusion 

Concluding a contract is an important stage in establishing legal relations. Proper execution of the agreement, clear definition of essential terms and attention to detail allow you to avoid legal problems in the future.