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News

How to simplify distance contracts according to the Czech Commercial Code

13.05.2020
Company: bnt attorneys-at-law s.r.o.

What are the options for distance contracts, how can you simplify the distance method of entering into contracts, and what should be agreed in the contract in this context? Conversely, what usual contractual arrangements can complicate distance contracts?

Restrictions on the free movement of people, the closure of borders and other measures taken by the state in response to the threat of a pandemic have made one of the most common things impossible in recent months: meeting in one place and concluding a contract in writing with all the parties signing the document at the same time. So, more than ever before, distance ways (among absent persons) of entering into contracts have come to the fore. In the past, the most common way, i.e. sending a document containing a contract by registered letter, was not the optimum choice at the time of an epidemic due to reasons of time.

A contract as an offer and acceptance, what can be negotiated, what can be omitted?

A written contract between absentees is regularly concluded by one party creating a written draft contract (the offer) in paper form, signing it and sending it to the other party (by post or courier), or delivering it in person. The other party signs the document (acceptance of the offer) and sends it back to the proposing party. The contract is concluded only when the other party accepts it (signs the offer).

Fortunately, the Civil Code allows us to simplify or modify this procedure.

Acceptance by signature without delivery

The simplest option is to agree that the contract is concluded remotely as soon as the other party signs the offer (acceptance of the offer), without the need to deliver the accepted offer back to whoever made the offer (the proposer). Delivering the signed offer to the proposer can be replaced, for the record, with simply sending information that the offer has been accepted and the contract has been concluded, for example by email. Unfortunately, in practice, when the distance method of concluding a large number of contracts on a daily basis is used, it often happens that the accepted (signed) offer is never returned to the proposer, and the process of concluding the contract is therefore not completed correctly. An arrangement regarding acceptance by signature without delivering the accepted offer eliminates the risk of this omission in practice and is therefore worth considering for this reason as well.

In the final provisions of a contract, it is often stated that the contract is concluded once it is signed by the last contracting party. It is difficult to assess whether there should be an adjustment to the moment that a contract is concluded if it is concluded remotely, or whether the text of this arrangement only reflects the fact that the contract will be signed by all the parties at once and delivery of the signed proposal therefore follows virtually immediately upon acceptance (each participant will immediately take the specified number of signed copies of the contract). It is therefore more appropriate to state explicitly that this is an adjustment to the method of concluding a contract and it will also apply when entering into a distance contract.

Real acceptance of an offer

In order to simplify the conclusion of distance contracts, what is known as real acceptance of an offer is also possible. The offer is accepted, and the contract is concluded by the contracting party, the addressee of the offer, acting according to the offer (especially by accepting or providing performance). For example, it may be an offer to buy a specific item. The person who offers the sale of the thing shall state in the offer that the offer can be accepted by paying a certain amount. If the addressee of the offer is interested in concluding the contract and pays the stated amount, the contract is concluded upon payment (by acting according to the offer). According to the Civil Code, it is possible to conclude a contract in this way if the parties agree, but also if it follows from the parties’ practice or if it is usual. In contracts, such a method of conclusion is often excluded, and it is not possible to use it. Therefore, rather than always excluding this method, for some types of contract it is more appropriate to count on this option and to adjust the specific conditions of its use.

Other ways of adjusting the contracting procedure

Another way to simplify the process of concluding a contract is, for example, to arrange for an offer to be accepted if one party does not respond to the offer within a certain time (acceptance by silence). This is, of course, only possible if the contracting party that is to be bound by its silence first of all agrees that its silence in a particular case will mean that it accepts the offer. It is therefore not possible to send someone a proposal for the purchase of a house without further notice and write in the offer that if you do not contact us within 14 days (you do not reject our offer), then you have concluded a contract. However, it is possible first to conclude a contract with someone in which the other party undertakes to respond to certain specific offers in a particular case by rejecting them, and if there is no rejection, the offer will be accepted at the end of the agreed period.

If a contracting party cannot be easily reached, or if there are several contracting parties, it may be appropriate to also use delivery of the accepted proposal to a certain representative (for example, a lawyer).

By when must an offer for a distance contract be accepted?

If you send a draft contract in writing, and the addressee of the offer wants to accept the offer, it must respond within the time limit specified in the offer. If, for any reason, a time limit is not specified in the offer, then by law acceptance within a reasonable period of time, given the nature of the proposed contract and the means used to send the offer, applies. The deadline will therefore be different depending on how complex the contract is, but also on whether we use a data box for delivery (more on this in the continuation of the article) or whether we use Czech Post to deliver the draft contract. In practice, it is clearly recommended to arrange a time for accepting the offer so that it is clear not only how, but also by when, it is possible to respond to the draft contract and when it is too late.

Next time we will continue with the topic of delivery, data boxes and concluding contracts by email.

 

Tags: Law |

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