Framework Agreements in 2025 and the New Civil Code

What is a framework agreement and when is it beneficial for you?

From a legal perspective, this is a so-called innominate (unnamed) contract under Section 1746 of the Czech Civil Code (hereinafter the "CC"). This means it is not explicitly regulated in the law as a separate contract type, which gives the parties considerable flexibility in setting their mutual rights and obligations.

In practice, framework agreements are most often used for repeated deliveries of goods between a manufacturer and a distributor, for the regular provision of services such as IT support or marketing, or in complex construction projects divided into multiple phases. Their key benefits for business are efficiency, legal certainty, and flexibility, which allows for a quick response to current needs through simple orders.

At ARROWS, we daily assist clients from various sectors, from technology firms to manufacturing companies, in structuring framework agreements to precisely match their operational needs while minimizing legal risks.

Framework Agreement vs. Terms and Conditions: Why they are not the same, even if courts sometimes think so

Although both instruments are used to regulate recurring relationships, their legal nature is fundamentally different. A framework agreement is the result of bilateral negotiation and consensus, i.e., a separate contract signed by both parties. In contrast, terms and conditions, regulated in Section 1751 of the CC, are typically a unilaterally prepared document that becomes part of the contract by mere reference.

However, this distinction is blurred by a controversial view of the Czech Supreme Court (NS). In several key decisions (e.g., file no. 23 Cdo 1888/2007 or file no. 29 ICdo 26/2012), it stated that a framework agreement is "nothing more than" a type of terms and conditions and that it does not in itself establish a binding relationship. This position represents a hidden risk for businesses.

If courts were to apply this interpretation literally, they could also apply the special protective rules applicable to terms and conditions to the framework agreement. One of these is the ineffectiveness of so-called surprising clauses (Section 1753 of the CC), i.e., provisions that the other party could not reasonably have expected.

This could lead to a situation where a key, albeit unusual, provision in your framework agreement is declared ineffective, even though you explicitly negotiated it with your partner.

The legal expert community criticizes this view of the Supreme Court because parties enter into a framework agreement with the clear intention of being bound by it. A framework agreement is binding – its obligation lies in the duty of the parties to follow its rules when concluding future implementing contracts. Moreover, it can contain independently effective obligations, such as a confidentiality or exclusivity clause, which are valid even without the conclusion of a single implementing contract.

We understand this legal duality. Our Prague-based legal team drafts contracts to withstand even the strictest judicial interpretation. We ensure that the parties' intention to be bound by the contract is perfectly clear from the text, thereby minimizing the risk of key provisions being challenged later.

The Architecture of a Bulletproof Framework Agreement: Key Points You Must Not Forget

A well-drafted framework agreement is the foundation for smooth and long-term cooperation. Below are the most important points that should not be missing.

1. Identification of the parties and the subject of cooperation

The basis of every contract is the precise identification of the contracting parties and a clear definition of the general framework of cooperation – i.e., what it will concern.

2. Mechanism for concluding implementing contracts

This is a critical point where most disputes arise. It is necessary to precisely define how individual orders are placed (e.g., by email, via an internal system) and how they are accepted, which creates a binding implementing contract.

3. Pricing and payment terms

The agreement must clearly state how the price for individual performance will be determined – whether it will be a fixed price list, an hourly rate, or an individual calculation. For long-term contracts, it is crucial to consider protection against market changes. A fixed price agreed upon at the beginning can become ruinous for the supplier after several years due to inflation.

Therefore, it is essential to incorporate a price adjustment mechanism into the contract, for example, in the form of a price or inflation clause linked to the official consumer price index published by the Czech Statistical Office (ČSÚ). Naturally, it should also regulate invoice due dates and penalties for late payment.

4. Rights and obligations (Delivery terms, liability, confidentiality)

This section should detail the quality specifications of the performance, delivery terms, the acceptance process, and the claims procedure. A precise clause on the protection of confidential information and trade secrets (Section 504 of the CC), which protects your know-how, is extremely important.

5. Duration and termination of cooperation

The agreement should clearly state whether it is concluded for a fixed or indefinite term. It is also key to define the grounds for termination and the length of the notice period to allow for the proper termination of an unfavorable cooperation.

6. Dispute resolution

A well-chosen prorogation clause (agreement on the local jurisdiction of a court) or an arbitration clause can save considerable costs and time in the event of a dispute.

When drafting or reviewing contracts for our clients, we emphasize all these points. Our goal is to create a document that is not only legally bulletproof but also practical and understandable for your business team.

The New Civil Code in Practice: How It Strengthened the Importance of Framework Agreements

With the advent of the new Czech Civil Code in 2014, the importance of framework agreements grew significantly. The New Civil Code (NOZ) assigned them a new, strong role as a key means of evidence. Under Section 1726 of the CC, even if the parties do not agree on a certain essential element in the contract (such as the purchase price), such a contract can still be valid if the circumstances indicate their will to conclude the contract.

Practical example – saving a deal without an agreed price

Imagine this situation: your salesperson hastily confirms an order by email, which mistakenly omits the price. The partner delivers the goods and then invoices an amount you do not agree with. Was a valid purchase agreement even formed?

Under the old legislation, such a contract would most likely have been invalid. Thanks to the New Civil Code (NOZ) , the solution is different:

1. Your existing framework agreement serves as strong evidence (Section 1726 of the CC) that you and your partner had a long-term intention to conclude valid deals.

2. This fact activates the "safety net" in Section 2085 of the CC, which states that if the parties had the will to conclude a contract without determining the price, the price for which comparable goods are usually sold under similar conditions applies.

3. The result is that the framework agreement helped save the validity of the individual contract and provided an objective criterion for determining the price, thereby preventing a costly dispute over the invalidity of the entire transaction.

Framework agreements with an international element: Ready for global trade?

As soon as your business partner is based abroad, other variables come into play. It is absolutely crucial to proactively address the issue of the governing law (which legal system governs the contract) and the jurisdiction of the court (where any dispute will be resolved). If you fail to do so, you expose yourself to considerable uncertainty.

The UN Convention on Contracts for the International Sale of Goods (CISG) may automatically apply to your implementing contracts for the sale of goods unless you explicitly exclude it in the contract. This can lead to a dual legal regime – while your framework agreement is governed by Czech law, the rules of the CISG apply to individual orders. In the event of a dispute, this creates immense legal uncertainty and complexity, which increases costs and the unpredictability of the outcome.

To regulate delivery terms, such as the transfer of costs and risks associated with the transport of goods, it is standard practice in international trade to use the international INCOTERMS clauses. Their correct selection and precise inclusion in the contract are essential for the smooth running of the business.

Thanks to our ARROWS International network, built over ten years, we handle cases with an international element on a daily basis. We have deep experience in setting up contracts to protect our clients' interests in a global environment, whether it involves the choice of law, the exclusion of the CISG, or representation in international arbitrations.

Conclusion: Build your business relationships on solid foundations

A framework agreement is a strategic tool, not just a formality. A correctly drafted one brings efficiency and security; a poorly drafted one is a source of costly disputes and risks. An investment in quality legal preparation always pays off in the long run.

At ARROWS, we rely on experience from long-term cooperation with our clients. Our portfolio includes more than 150 joint-stock companies, 250 limited liability companies (s.r.o.), and 51 municipalities and regions. We know what companies need in practice, and we pride ourselves on speed and high-quality services.

Whether you need to draft a new framework agreement, review an existing one, or resolve a dispute, we are here for you. We can help you with:

• drafting internal guidelines,

• preparing documentation that protects against fines and penalties,

• drafting or reviewing contracts,

• representation before courts and administrative authorities,

• expert training for your employees.

We are more than just lawyers. We enjoy connecting our clients when we see interesting investment or business opportunities. Do not hesitate to contact us not only with a legal problem but also with an interesting business idea. Contact us, and we will ensure that your contracts are your support, not a source of problems.