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News

Negotiations via videoconference – the legal practitioner’s point of view in the Czech Republic

2.11.2020
Company: bnt attorneys-at-law s.r.o.

In recent days, we have again reverted to frequent communication (and negotiation) via videoconference. But what are the legal aspects of this way of communicating?

In recent days, face-to-face conversations in meeting rooms have again been replaced by conversations over the phone or – more frequently – in the form of video conferences. It is not uncommon for contracts to be negotiated remotely in this manner. Of course, negotiations via videoconference have their own legal aspects. The following article presents some of them, and suggests rules and best practices.

Who am I really talking to?

The matters discussed during video conferences are often confidential or part of the business secret, or must otherwise be protected from ending up in the hands of unauthorized third parties, so that participants won’t suffer loss or harm. If the topic of the talk is sensitive, it is essential that everyone follows the basic rule of carefully protecting access data (link, access codes, dial-in PINs) so that only the intended participants are (virtually) "in the room". Participants who cannot be seen may be asked to turn on their camera so that their identity can be verified via video. Those who underestimate data and privacy protection in video conferences may naturally be held responsible for unwarranted disclosures and leaks.

To record or not to record?

With most apps and other software for conducting video conferences, recording the conversation is child’s play, and may take place without the other participants’ knowledge. Is it legal to produce such footage if the participants did not first agree on recordings and give their consent? Principally, audio and video recordings of people and their expressions of a personal character may only be made and used with their prior consent. Even so, numerous instances can be found among the Supreme Court and Constitutional Court case law of the past twenty years in which recordings were made in a commercial or professional context without the knowledge and consent of the participants, but were nonetheless found legal and admitted by the courts as evidence in civil-law proceedings or criminal proceedings. This is because of the courts’ general tendency to deny that recordings of business negotiations or professional conversations are an "expression of personal character". Consequently, the participants in videoconferences should assume that their conversation may be recorded and used without their knowledge and consent. If someone is against making such recordings, they should explicitly say so at the outset, and give their reasons if needed. Among other things, the creation of such footage (especially if it is then stored out of reach of some of the parties) increases the risk that facts become disclosed which the participants talked about at the videoconference but which form a part of their business secret.

What if a contract is to be negotiated?

Contracts may be concluded during a videoconference just as easily as during a personal meeting, as long as the law does not prescribe the written form (or another qualified form of contracting) as mandatory. It suffices that all participants to the talks reach an understanding as to the contents of the contract which is to be made between them. In any case, it is advisable to then prepare an audiovisual record of the teleconference to capture the fact of the conclusion of the contract as well as its contents. This record should then be safely stored.

If either party insists on the written form but the law itself does not prescribe a written contract, then that party’s reservation should be made manifest before entering into negotiations: according to earlier decisions by the Supreme Court, submitting a written offer to contract does not in and by itself imply that the participants (or one or some of them) will only want to enter into a written contract.

Even if one reserves the written form, and the contract is not formed simply by reaching a consensus during the oral (remote) negotiations, video footage of these negotiations can still be used as a piece of evidence by either party for its own benefit. For instance, it could be cited as a guideline of interpretation for ambiguous contractual provisions (i.e., it could demonstrate what intentions the parties pursued by including a specific provision in their contract). However, this rule of interpretation may be excluded by the parties in advance, by including a clause to such effect.

Such a recording could also e.g. be used to show that certain provisions of the contract, or certain schedules and annexes, were brought to the attention of the other party, or that their contents or meaning was explained to them. (This is required by law under certain circumstances for a contractual provision to be valid and enforceable.) Finally, the recording of negotiations via video conference may be used as evidence even if the contract is never made – namely, to show that the negotiations had advanced to a stage in which the decision by one party to walk away from the deal qualifies as a breach of honest business dealings, giving rise to precontractual liability for damage. The above examples should be reason enough to clarify in advance among the parties whether or not to make a recording, and who gets to store it, and where.

Source:
Act No. 89/2012 Sb., Civil Code as amended

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Tags: Law | Business Development |

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