Contract claims
Contract claims can take many forms. It can be a simple enforcement of a contractual obligation — a claim, but it is often a combination of several decisive issues. Was there a breach of the contract that established the right to terminate it? What consideration do the parties owe under the terminated contract? Has one of the parties suffered damage as a result of the failure to fulfil the contractual obligation of the other party? Is this damage covered by the agreed contractual penalty?
From this cross-sectional list alone, it is clear that the key is the correct legal qualification of the whole situation in the context of the contractual relationship, already at the moment when the first problems between the parties are resolved. Many years of experience with various reasons or circumstances of disputes point out that it is not advisable to rely on the good relations of the parties at the time of signing, oral agreement or promise. The best prevention of litigation is a clearly written contract, from which the rights and obligations of the parties are clearly based, and which follows their ideas as far as possible. However, no prevention will guarantee that a dispute will not occur.
Due to the diversity of contractual relations, it is difficult to provide a comprehensive interpretation, so we mention some of the institutes that we encounter in contractual disputes:
The conclusion of the contract is preceded by the so-called negotiation, or negotiation of its content. Here it is important to pay attention to the binding nature of the offer or, for example, the pre-contractual liability, which the party may establish the right to compensation in the event that the counterparty ultimately does not conclude a contract with it.
In the event that the contracting party fails to fulfil its obligations or deviates from the agreed method of performance, it shall: contractual penalty which may constitute a so-called lump-sum compensation. However, the court has the power to reduce the amount of the contractual penalty in the context of a particular claim. In addition, it can also be arranged interest on arrears which, in the event of a futile expiration of the period, forms an accessory of the monetary claim. If the parties do not agree on the interest on default or exclude it, the pecuniary claim will be paid by the so-called statutory interest on default, which is equal to the REPO rate set by the Czech National Bank, increased by 8 percentage points.
Contracting parties in certain circumstances are subject to the law right to withdraw from the contract. In this case, the contract is treated as if it never came into existence and it is therefore necessary to return any performance of the parties, otherwise it would be an unjust enrichment. The contractual relationship can also be terminated by terminating the contract for the agreed reasons.
An arbitration clause can also be agreed upon, under which an arbitration court will be appointed to resolve disputes under the contract, which has the advantage of speeding up the settlement of the dispute.
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