Dra. Mariana Caporale

Corporate Department Manager

When the parties of a business reach an agreement, a contract is born.

The contract is an agreement by which the parties assume reciprocal obligations and establish their scope and conditions of compliance, as well as establish the framework within which the contract must be executed.

This agreement can be verbal or written, but the complexity, speed and distance with which modern business is carried out makes the old “gentlemen’s agreement” ineffective, and it is essential that any type of arrangement be put on paper to guarantee its proper execution. execution.

It is often said that contracts are made to be boxed on a desk. That is true, as long as things are going well, because it is evident that no one plans a business thinking that they will not be able to honor their obligations.

But no one can predict the future and that is the lawyer’s task: to get ahead of the game and go beyond what the parties think when closing a deal. Because when differences between them begin and the dialogue suffers, the contract is revealed as what it really is: the law between the parties, and as such, the fundamental tool to resolve any conflict.

Furthermore, in the event that it is necessary to resort to justice, the contract will be the most effective instrument for the third parties called to intervene – to whom its interpretation and application corresponds (lawyers, judges, arbitrators) – and will ensure that any process that must be conducted is shorter, simpler and less burdensome for the parties.

Therefore, before signing a contract, it is important to review some central aspects:

• Know what type of contract is being signed, under the premise that the contract is not an end in itself but rather a vehicle or tool at the service of the business you want to carry out.
• That the obligations of the parties are described as clearly as possible, ambiguities can generate unintended consequences.
• Check that the price and payment methods are clearly established.
• That the term and conditions of exit (unilateral termination) are determined precisely.
• Know if penalties and/or fines are established.
• If Annexes are added, sign them together with the contract, and make it clear that they are an integral part of the contract and binding on the parties.
• Determine the way in which conflicts will be resolved.
• And last but not least, read before signing and if in doubt, get advice.