CONTRACT LAW

As a rule, contracts are not subject to any particular form and oral agreements are valid. However, contracts such as real estate sales, sale promises, guarantees and non-compete agreements are invalid unless the form required by law is observed. In addition, transactions above a certain value must be proven in court by written documents.

When the debtor is in default, performance can be demanded by granting a reasonable period. If performance is still not made, the creditor may claim performance plus damages for delay, waive performance and claim compensation, or rescind the contract.

Yes. The judge may of their own motion reduce a penalty they consider excessive. However, in contracts between merchants, a penalty agreed against a debtor who is a merchant cannot be reduced on the ground that it is excessive.

If an extraordinary event unforeseeable when the contract was made has excessively disturbed the balance between the parties’ obligations, the debtor may ask the judge to adapt the contract to the new circumstances. If adaptation is not possible, rescission or, for continuing contracts, termination may be considered.

Always review the correct identification of the parties, a clear description of obligations and delivery times, payment terms, termination and penalty clauses, and the competent court or arbitration clause for disputes. Ambiguity in these provisions is the most common cause of later disputes.

The general limitation period is ten years. Rent, interest, claims arising from agency and works contracts, and certain commercial claims are subject to a five-year limitation period.