At least once in our lives, we were all taught by someone more experienced to read the footnotes of a contract, any paragraph written in small letters, and the explanations marked with asterisks.

Nevertheless, the clauses that seem inapplicable, which we are tempted to read between the lines are equally important.

Let’s assume a contract of tens of pages, written in a technical language, with multiple references to annexes, which can add up to those other tens of pages. As we go through the document, we understand the object, the duration, the rights and obligations of the parties, the method of termination, the penalties that can intervene, and in which cases. It seems that we ticked off everything that was important.

But this is exactly what the drafting parties are waiting for the decrease in vigilance that installs itself with the completion of a larger contract.

What chapters do we generally find after “Termination of the contract” or “Litigation and applicable legislation”?

1. Force majeure; 2. Confidentiality; 3. Protection of personal data; 4. Notices; 5. Contractual liability reductions; 6. The hardship clause; 7. Negotiated clauses, assumed by professionals; 8. The prevailing language; 9. Prevalence of the Contract over any previously signed document.

Brief considerations of the risks you assume by not paying enough attention to these lines or pages at the end of the contracts:

1. Force majeure

This chapter showed its true practical value with the Covid 19 pandemic when most contracts were affected in the long term by a truly unpredictable and insurmountable event.

First of all, it is particularly important that this clause exists in the Contract. If there is no reference to the force majeure clause, the Certificate of endorsement of the existence of the case of force majeure cannot be issued by the Chamber of Commerce and Industry.

The classic clause provides for the definition of force majeure, but sometimes even the definition is slightly different from what the Civil Code provides, so we recommend carefully reading the cases expressly provided in the Contract of what might qualify as a case of limitation or exemption from liability for each party.

It is also important to determine if we include the obligation to certify the intervention of a case of force majeure by the Chamber of Commerce and Industry – a hypothesis that involves a procedure and costs or if the parties consider sufficient a simple written notification issued by the affected party.

Even more significant: it is important to establish clearly what happens practically in each individual contract, in case of a force majeure. We do not recommend using the same general clause for all contracts, regardless of how well it is written. A loan agreement will not be affected by a landslide/epidemic in the same way as an office lease is affected.

More importantly, what is mentioned in this clause is essential because when the contractual relations grow cold, even the Certificate issued by the Chamber of Commerce does not stop the flow of penalties. This will be established by a court, based overwhelmingly on the force majeure clauses agreed by the parties when signing the contract.

2. Confidentiality

The parties can establish exhaustively or exemplarily what kind of data will be confidential and for what periods of time they cannot be used, under the penalty of paying penalties in sometimes extremely large amounts, precisely to reinforce their importance for the party that discloses them in order to fulfill the object of the contract. You can choose to keep the respective penalties already contractually established, without having been proven, or choose the safer option in which it is stipulated that the guilty party that violated the confidentiality clause will pay the entire damage determined by a competent court, by the final decision.

Sometimes, one of the parties obliges the other to enter into employment or collaboration contracts with its subordinates that expressly include confidentiality clauses. Such clauses cannot remain unimplemented, because the credibility of a company that promises such conduct and does not apply it, could hardly be rebuilt.

3. Protection of personal data

Each contract involves the processing of personal data, whether it is only the names and e-mail addresses of the administrators or representatives of the parties when signing the contract, or whether we are talking about volumes of most sensitive data.

Although it seems that the field of personal data protection has taken a step back compared to previous years, we must not overlook the importance of establishing the quality of each of the parties (are the parties independent operators, associates, or is there an operator-authorized person relationship? ), clearly noting the responsibility of each of them, their technical obligations, the protocol in case of a Data Breach, the return or destruction of data at the end of the collaboration, etc.

The fines are still very high in the field, so our recommendation is to give the necessary importance to this chapter and to have each of the obligations assumed at the declarative level transposed into practice. Do not declare that you are aligned with the ISU standards in the field if you are not, do not claim that you practice pseudonymization and anonymization of data if you do not master the respective processes, outsource the service if it exceeds your knowledge or time resources.

4. Notices

The parties have the freedom to determine how they will communicate their requests to each other during the execution of the contract. They can establish that the contact method is either the classic registered letter with advice of delivery or a simple e-mail. Broadly, any oral support must be doubled by a written one, which can constitute evidence in case of litigation.

It is important to read this article carefully both from the perspective of the valid way of transmitting the information, as well as the term in which the notifications are considered to have been transmitted and of which it is thus taken into account. When time is of the essence of the performance of the contract, it is important to know whether the party has to take an action on the day of receiving the notification, the next day, or in the next five days after receiving it.

Also, do not forget to notify your co-contractors every time there is a change in headquarters, e-mail addresses, or persons responsible for the contract, otherwise, the notifications sent by them will be valid and the deadlines will run, regardless of whether you received them or not.

5. Contractual disclaimers

You will often come across phrases like “x is not responsible for the loss of profit” in contracts. The loss of profit, lucrum cessans, together with the damage actually suffered, completely describes the damage that can be repaired. And although we are tempted to decide upon signing a contract not to modify this clause, in some situations, it could make a colossal difference between what damages we can prove in court that has already been suffered and accounted for, versus this loss of profit, which is sometimes overwhelming bigger. A construction team can be stuck in a contract where payments have been suspended due to the beneficiary’s inability to pay or simply bad faith, during which time they can miss the project of the year, even though they would have qualified and could have been the biggest cashing since its establishment. So here’s an example of how a single phrase can make the difference between the continuation of a business and bankruptcy.

6. The hardship clause

According to the Civil Code, the parties are required to perform their obligations, even if their performance has become more onerous, either due to the increase in the costs of performing their own obligation, or due to the decrease in the value of the consideration. However, if the execution of the contract has become excessively onerous due to an exceptional change in circumstances that would make the debtor obligation obviously unfair, the court can order either the adaptation of the contract, in order to fairly distribute the resulting losses and benefits between the parties from the change of circumstances, or the termination of the contract.

However, what is very important to mention is that the court can take these measures ONLY IF the debtor has not assumed the risk of changing circumstances. If the contractual debtor of the obligation declares that he renounces the invocation of the hardship clause, the court will not be able to admit such a request.

7. Negotiated clauses, assumed by professionals

The translation of a clause formulated, for example, as follows: “The parties confirm that this Contract was negotiated and concluded between professionals” is that the parties, and here we generally refer to the party with a lower contractual position, acknowledge that there have been negotiations and compromises on both sides and that they understand exactly their obligations and the risks associated with the object of the contract.

Often, in practice, we witness what is called adhesion contracts. The clauses are not negotiable, or so few changes are accepted that they do not affect the essence of the contract. The client either accepts the contract in the proposed form or turns to another service provider/contractor. However, the respective contracts pressure the clients to affirm that they were negotiated and that the clauses were not imposed on them.

According to the law, the standard clauses (which provide for the benefit of the one who proposes them the limitation of liability, the right to unilaterally denounce the contract, to suspend the execution of obligations, or which provide to the detriment of the other party the forfeiture of rights or the benefit of the term, the limitation of the right to oppose exceptions, the restriction of the freedom to contract with other persons, the tacit renewal of the contract, the applicable law, compromise clauses or by which they derogate from the rules regarding the jurisdiction of the courts) do not produce effects unless they are expressly accepted, in writing, by the other side.

For your protection, and as far as possible, state in the contracts only what actually happens.

8. The prevailing language

In bilingual contracts, we recommend that you read this clause as well, because even if the contract is signed between Romanian legal entities, on the territory of Romania, the language that prevails may be other than Romanian, and the text must be checked for compliance and with due attention given to the expressions specific to each language and linguistic nuances.

It is also important to realize that sometimes there is no parity between the legal systems, the legal remedies, the rights of the parties in other countries, and the clauses that provide such mechanisms without applicability in Romania could be considered null or unwritten and you will not enjoy them even if you rely on their effects. A consultation request to a lawyer specialized in contract law can be of real use in such cases.

9. Prevalence of the Contract over any previously signed document

The contract represents the entire will of the parties and it is important that all the details established during the negotiations to be expressly present in the contract and in its annexes. What is not included in the contract and its annexes will not represent an obligation for any of the parties and you should not expect any other behavior from your co-contractor. So we recommend that all your expectations, requirements, and specifications be explicitly transposed in the contract and not to rely on pre-agreed conditions, nor on promises, hope, friendship, and other concepts that have no place in a contractual context.

Our manifesto for the care that must be affirmed with the signing of any contract comes from the practical situations we face daily in the activity of supporting our clients. We will always support the examination of a contract made by a specialist before signing, because it is infinitely simpler to manage a contract assumed in full understanding of its clauses, negotiated in favour of the respective party, than the subsequent attempt to remedy a relationship which started on the wrong foot.

Author: Atty. Lavinia Rusu