The service of legal examination of the contract

Every agreement related to commercial affairs and entrepreneurship should be thoroughly checked. Businessmen often enter into agreements with new partners and suppliers. At first glance, they may inspire confidence, seem like a solid company with a good reputation, but in fact turn out to be a one-day company, be a non-existent organization or cash out.

Therefore, even for a single delivery, some other operation, if there are doubts about some points in the agreement, it is necessary to check the contract and the prospective partner. Verification of the contract and its price by a lawyer is necessary in order to:

  1. To understand exactly with whom the activities and cooperation are conducted, since the partner company may not be at all according to the documents – the company has no registration, but only the appearance of existence – the official website, phone number and other similar attributes).
  2. Determine whether the company conducts its activities using legal methods. Are there any violations of the law, have there been any cases before.
  3. Not to be in a situation where it is necessary to make additional amounts of tax contributions to the budget (if the employees of the Federal Tax Service during the audit record the fact of contractual relations with an unscrupulous company, then you will need to pay additional tax and plus penalties. The amounts can be quite voluminous).
  4. To protect yourself from possible risks that may be expressed in the loss of funds, as well as the costs of legal proceedings.

The literacy of the drafting of the contract, the legal purity of the transaction, the timely legal analysis of the contract (the service is provided by our lawyers) in total ensure the successful implementation of the agreements.

The service of legal examination of the contract

Lawyers pay special attention to:

  1. On the terms of the agreement. They should be formulated clearly, without the possibility of a multifaceted understanding to exclude problems in the implementation of the contract. The text should contain all the essential terms of the agreement, which are established by law. So, in the PREP, it is necessary to reach a compromise on the subject and cost. The key is a clear identification of the object of purchase and sale. If we are talking about real estate, then it is prescribed – the address of the location of the house, the apartment number, the total and residential square footage of the premises, the cadastral number. It is necessary to make sure that the following conditions are fixed in the text of the document: the subject, the amount of the contract and in what order all calculations are made, the application of fines in case of late fulfillment of conditions (penalty, penalty), the possibility of canceling agreements on the initiative of the participants.
  2. Examination of expensive property. Before you sell or purchase such property (real estate, this also includes blocks of shares, etc.), it is recommended to make sure that the agreed value is correct. To do this, you should turn to the services of such a specialist as an appraiser.
  3. The right of the company’s representative to conclude a contract. There is a circle of persons who have the right to act as representatives of the company without having a power of attorney. This information can be checked according to the Unified State Register of Legal Entities – usually the head of the company acts as it. Moreover, in the event of a change of management, all companies have an obligation to submit information to the register. If the drafting of the contract and its conclusion is on behalf of a power of attorney, it is recommended to carefully read the text of the document and double-check the validity of the papers (if such a period is not prescribed, then by law it is 1 year from the date of signing the document. If there is no such date, then the power of attorney is invalidated), whether the document specifies a specific authority to sign agreements. If the power of attorney is notarized, then its authenticity can be checked in the electronic register.
  4. Approval by the Board of Directors and by the General Meeting. The articles of association of some organizations provide for mandatory approval of major transactions by the general meeting. In this case, it is necessary to request the text of the charter from the opponent and check for such approval.
  5. Special terms of the contract governing disputable situations. To avoid misunderstandings, it is recommended to prescribe such methods of resolution in the text of the agreement – pre-trial settlement involves sending a claim to the opponent indicating the grounds of the dispute, conflict, then going to court (if it was not possible to find a compromise with a peaceful way of resolving the dispute). Here it is necessary to verify the jurisdiction specified in the contract for compliance with the current legislation, whether the possibility of applying to the arbitration court is prescribed.

In case of untimely detection of the risks of the agreement, undesirable consequences may occur – the recognition of the contract as invalid by a court decision, its cancellation, significant losses of the participant in the agreement, bringing to subsidiary liability.

The Agreement is invalidated on the following grounds:

  • essential conditions are not spelled out;
  • conditions that contradict the law are fixed (usually such a transaction is disputed, but if the interests of the state or third parties are violated, it is null and void);
  • signed by a person incapacitated or with limited legal capacity;
  • the contract is cancelled if there is evidence of the signing of the agreement by one of the parties under threats, as a result of delusion or deception.

If a contract is signed with a one-day company, then losses are guaranteed. Since the counterparty will not seek to fulfill the agreement, and it turns out to be practically impossible to get a penalty from such companies.

The contract may specify that the disputes that arise will be the subject of arbitration proceedings. It’s worth a lot of financial investment. Not every entrepreneur can afford it.

The head of the company has the right to bring to personal responsibility if he has not received the approval of the board at the conclusion of the transaction.

The indicated list of consequences is rather approximate. They may occur when signing an agreement without prior verification by a lawyer. Independent conclusion of an agreement is a rather risky business, the optimal solution for the safe conduct of business is a lawyer’s consultation.

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Leading Lawyers

Valentina Khlavich
Managing Partner
Thomas Relja
Partner
Dmitry Kofanov
Partner
Valentina Khlavich
Managing Partner

Law degree in the Russian Federation

Studied at the University of Passau, Germany

Foreign Languages: English, German

Since 2007 a lawyer in Beiten Burkhardt lawfirm

Since 2012 founder and managing partner at VALEN

Our specialists
Thomas Relja
Partner

Economics Degree

Foreign Languages: Croatian, English

5+ years as a head of Accounting and Finance in European Companies

2+ years as a SAP consultant for companies in Germany (Munich) and UAE (Dubai)

Partner at VALEN

Our specialists
Dmitry Kofanov
Partner

Certified Lawyer in the Russian Federation

Experience since 2003 – in Russian and foreign law firms

Since 2021 – partner at VALEN

Our specialists

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