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Commercial Agreements

Alterlaw’s professionals are fully aware that contract language differs significantly from the use of terms in everyday life. Even the slightest detail in the contract may modify your legal status under commercial transaction contracts.

As all legally binding agreements, commercial contracts may have their own hidden meanings and pitfalls. After conclusion, you may have not realized that the terms that you have agreed upon are actually disadvantageous or unfavorable for your business’ position. This is why legal advice should be sought at all contract stages, from negotiations to execution and termination. Alterlaw’s extensive experience in drafting and negotiating commercial contracts manages to safeguard the interests of your business and protect you from misleading contract interpretations.

Definition of commercial agreements

A commercial agreement is usually a contract between two business entities (business-to-business, or B2B) and covers the terms of transactions between them. They differ from the business-to-consumer (B2C) contracts in the fact that B2B contracts have fewer protective or “escape” clauses than B2C. In other words, while in B2C transactions the consumer is legally recognized as the weaker party, in B2B the law assumes that the business entities are fully informed about their legal obligations and can resolve their disputes based on the contract means.

Such commercial agreements may include different types of contracts, such as purchasing agreements (regulating the buying and selling of goods instead of services between seller and buyer), rental agreements (regulating the relationship between landlord and tenant on a month-to-month basis), and lease agreements (referring to longer rental periods, usually for six months or more).

Commercial agreements content

Concluding a commercial contract may take the form of a written or oral agreement, or even if implied in a formal or informal way. These forms are all enforceable, unless law specifically requires a written agreement, such as in the case of sale of real estate or sale of particular goods. In general, contract law assists in the identification of each party’s intentions to agree and be bound by a valid and enforceable commercial contract.

No matter what their form and content may be, commercial contracts are regulated by the general principles of contract law, in order to be legally enforceable. Therefore, the object of the transaction should be something of value for both parties and their intention to offer and accept should be clearly stated. The content of the contract should comply with the requirements of the national law, including the legal purpose of the transaction and the capability of the parties to enter into contract.

It is essential that a commercial agreement explicitly states the identities of the parties, defines terms that may be special for the specific transaction, and explain in detail the elements of the transaction, i.e. description of the products or services offered, duration of the contract, delivery times etc. Legal advice is particularly important in the execution part of the contract, including warranties, consequences of nonperformance, liquidated damages and termination terms.