Commercial contracts

Commercial contracts are rooted in civil law and thereby intertwined with large areas of jurisprudence. Contracts involve the reciprocal rights and obligations between the parties. Even if verbal contracts are just as binding as written ones, it is always safer and more secure to document a contract’s origin, application and interpretation in writing.

KBM help you by offering advice on the negotiation and preparation of all types of commercial contracts. This also applies to shareholder, partnership and confidentiality agreements and various forms of distribution agreement.

Once we had sat down and discussed matters it was quite clear to both parties. “We will set up a company together, you will do this and I will do that, and we know how we will divide the profits or losses etc. Why do we need to have something in writing when we agree?” It is a good question, but it is important to distinguish between private and business matters.

A company is usually run by two or more people together. In this case, it is important to draw up a partnership agreement. The agreement that is drawn up must regulate the relationships between the parties and prevent any disputes that could arise in the future. What would happen if one of the parties had a serious accident and could no longer work in the company? What would happen if someone died? Who can then take over/buy their shares? What would happen if one partner no longer wanted to be a partner in the company? Many questions need to be regulated before and not afterwards, so that all parties know where they stand.

The best thing is to discuss the important questions before starting up the company, but of course, this can also be done as the company grows. The way one party sees the relationship today might not match how that party will see it in the future.

A CEO is not generally covered by the Employment Protection Act. A CEO should therefore have a contract that is especially well drafted. In principle, the company and the CEO can negotiate any terms they like within the employment relationship. However, the CEO contract must be supported by the provisions of contract law and it must not conflict with any other law, such as discrimination law.

Points that should be included are the role and form of employment, location, salary, pension benefits, external contracts or secondary jobs, termination and notice period, confidentiality and competition.

We can assist with either drafting a CEO contract from scratch or reviewing an existing contract to see if it needs to be modified.