Changes to executing agreements from 2014

12. prosinec 2013  |  Ondřej Mikula

The new Civil Code, which took effect on 1 January 2014, has significantly changed the process of concluding an agreement. Let’s look at some of the major changes.

The main features of concluding an agreement have not changed – it will still be necessary to submit a proposal or offer and the proposal will have to be accepted. But unlike before, acceptance may be in the form of an answer with an amendment or deviation from the original wording, which used to be considered a refusal of the offer. It must be noted, however, that only “insignificant” changes can be made.

Whether a change is considered significant or not will always have to be assessed based on the specific circumstances. Most likely the provisions defining a significant breach will be looked at first. Significant changes include any change that the author could reasonably expect the party making the proposal to reject.

The proposing party, however, may be able to avoid any potential negative consequences by expressly excluding any “deviating” acceptance beforehand or at least immediately after it is received.

Advertising, catalogues and displays

The new Civil Code newly considers a proposal to deliver goods or provide a service made through advertising, in a catalogue or a display as an offer to conclude an agreement, subject to availability or the party’s inability to render performance. If acceptance becomes effective after the goods have been sold out, no agreement will likely be concluded and the proposing party will not be obligated to obtain and deliver the goods. A similar situation can occur when a business is no longer capable of rendering performance, for example due to pending insolvency proceedings.

Confirmation letters

One crucial change is the regulation of what is termed “post-confirmation”. If parties do not enter into an agreement in writing, for example if they do so orally, and subsequently one of the parties sends a confirmation letter to the other party, the agreement is considered concluded based on the contents of the confirmation, including any potential deviations from the original agreement. Such deviations, however, must not be significant and should be of a character a reasonable business would be willing to accept. In practice, however, this course of action is not advisable since it would be difficult to prove the original contents of the agreement and whether it significantly deviates from the original. The recipient of a confirmation letter will be allowed to expressly reject it in legal proceedings vis-à-vis the other party. As such, any potential problems should be eliminated. Nevertheless, the regulation means that businesses will have to pay due attention to the contents of documents sent by their customers and contractual partners.

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