The business sphere is sustained by the relationships between all the agents that participate in the market. These are the suppliers, companies and customers who reach agreements through the commercial contracts. Such commercial contracts, therefore, are intended to embody an agreement of private wills between independent agents, in which rights and obligations arise for all parties. But what happens when one of the parties fails to fulfil its obligations? When signing a commercial contract, it is essential to know the legal formulas that exist to protect you against the non-fulfilment of the obligations of commercial contracts by the other party.
What is a breach of commercial contract?
Breach of contract can be considered to be the greatest risk faced by the parties concerned when entering into a commercial contract. This situation occurs when one of the parties fails to fulfil the agreed obligations. The key to business relations is to establish contracts that meet the legally required conditions, so that the debtor assumes the agreed obligations.
Default prevention measures before signing a contract.
- First of all, it is essential to call in legal professionals to properly study all the clauses that make up our contract before signing it.
- It is essential to obtain the exact details of the parties to the agreement, whether they are natural persons or legal entities. It is essential to obtain the details of the company's commercial register and to be aware of its solvency.
- In our contract, it is important to establish written clauses that protect us against this risk, such as establishing penalties for the defaulting party. This is the key point in which it must be specified that the debtor must not only pay the agreed payment, but must also pay compensation for late payment.
Ways of enforcing a contract:
At the point where it becomes necessary to demand performance of the contract from the obligor, there are several ways to do so.
- Extra-judicial enforcement of the contract: before going to court, an amicable claim is established. This is usually done by means of a written document: the burofax. This document is then used as evidence in a court case. The purpose of this procedure is to send the debtor a document that proves the non-payment in an unquestionable way, demanding the fulfilment of the debt.
- Before going so far as to file a lawsuit, there is another option for seeking resolution of the conflict, which is through a mediator. Its aim is to seek a new agreement between the parties.
- To enforce the contract judicially: At this point, a lawsuit is filed against the debtor. In this case it is necessary to assess what kind of default has occurred.
Procedures for the judicial claim of a contract:
- Oral proceedingsThe court proceedings are applied when the debts are less than €6,000 and more than €2,000. A trial is held after questioning and presentation of evidence by both parties.
- Ordinary procedure: apply when the amount is more than €6,000. The trial is held after the Preliminary Hearing where the parties present their evidence.
At Martinez-Sanz Lawyers, we are lawyers in commercial law specialising in trade contracts. Enquiries by e-mail (info@martinezsanzabogados.com) and telephone (+ 34 964 83 16 60 / + 34 911 92 20 12).
If you need our help and legal advice, do not hesitate to contact us.
