Contract analysis

May, 18 2021

Contents:

In accordance with the Civil Code of the Russian Federation, an agreement between two or more persons on the establishment, modification or termination of civil rights and obligations is recognized as a contract.

The scope and content of the contract are within the competence of civil law, where all the essential features are fully determined and its various types are listed.

Contracts are divided into different types based on the objects and subjects of legal relations covered by them. For example: purchase and sale contract, lease contract, gift contract, etc. There is also a mixed type of contract. The relations of the parties to a mixed contract are subject to legal norms in the relevant parts of the rules on contracts, the elements of which are contained in the mixed contract.

When choosing the type of contract, it is necessary to understand that there is no single legal basis for dividing contracts into types in the legislation.

Competent analysis of contracts concerning various activities of the company and business areas is an essential factor for successful business today.

Whatever goals are set for the parties to the contractual relationship, the conclusion of the transaction must be preceded by certain preparation procedures.

Stages of contract analysis

The first step in analyzing the contract is to determine the final result or the nature of the actions performed, which will have to be achieved by agreement of the parties.

After establishing the purpose of the contract, it is necessary to conduct a legal analysis of the contract for compliance with the law. It is important that the legal norms are in force at the time of the conclusion of the contract (there are legal norms that have lost their force, and there are legal norms that have not yet entered into it). This requires an analysis of the ever-changing legislative framework.

After the legal analysis procedure, the specialist makes a written or oral conclusion.

The essence of the contract analysis

Significant details of the legal analysis of the contract are the following actions:

  1. The establishment of legality, which assumes that the contract does not violate laws of the country.
  2. Examine of judicial practice and analysis of judicial decisions on homogeneous disputes.
  3. Clarification of the meaning of the terms and conditions included in the contract from the point of view of law.
  4. Identification of the contract rules that infringe on the interests of the requesting party, and those that may create other problems for the participant, including subsequent compliance with the rules.
  5. Inclusion of clauses establishing additional measures to protect the interests of the client as an interested party.

In general, the analysis of the contract is a responsible process that requires special attention, since the contract is a document that regulates the rights and obligations of the parties in the framework of the implementation of civil rights and obligations.

The result of expert work

Very often, fraudsters take advantage of the carelessness of the person entering into the contract, attracting professional lawyers with knowledge in the field of concluding contracts. The types and forms of deception can be different, as fraudsters are constantly looking for new ways to gain benefits, using many uncertainties in the texts of laws. 

A contract between equal parties is a transaction and, at the same time, a promise made by a party to others. In addition to legality, there is also the concept of reputation, which can suffer despite the favorable decision for the party in the dispute.

The analysis of the agreement allows you to detect the risk of the following circumstances:

  • The absence of conditions in the contract that are essential for the recognition of the conclusion of the transaction as valid.
  • Non-compliance of the contract with the legislation. If the contract is contrary to the law, such a contract is considered null and void and all the consequences that were committed under this contract are recognized as invalid. If the transaction is invalid, each of the parties is obliged to return to the other all received under the transaction, and if it is impossible to return the received in nature (including when the received is expressed in the use of property, work performed or services provided), to reimburse its value, unless other consequences of the invalidity of the transaction are provided by the law.
  • Usually, the reason is not deliberate intent, but a lack of awareness of the creator of contract or signatory. And sometimes ignorance is not conscious, because the cause may be conflicts of law, which are difficult to detect timely.
  • Some contracts are subject to mandatory state registration and / or notarization. This can be critical, for example, if the deadlines for fulfilling obligations are very small.
  • The person does not have the right to act as a party to the contract (lack of a power of attorney, incapacity, etc.)
  • The presence of provisions that put the client at a disadvantage. A common method is the presence of wording: “The party refuses to make claims in cases…”. The contract contains ambiguous wording, the provisions are not specific, all these make it possible to challenge the contract.
  • Other risks.

Of course, it is better to identify possible risks even before the conditions will be created for their occurrence.

Author of the article
Contract analysis
Valentina Khlavich
Managing Partner
Send Request
By clicking on the button "Submit", you give your consent to the processing of your personal data and agree to the privacy policy.