Framework contracts and the new Civil Code

A framework contract is a specific instrument used primarily in commercial relationships where the basic rules for future specific contracts need to be established. This agreement is not a classic contract, but rather a "superagreement" that sets the framework for further, more detailed contracts. The Supreme Court has repeatedly confirmed that a framework contract does not create a contractual relationship or the claims and obligations of the parties. However, in the new Civil Code, the framework contract acquires an important role as a means of proof, which increases its importance in legal practice. This article discusses its function and legal implications in detail.

Author of the article: ARROWS (JUDr. Jakub Dohnal, Ph.D., LL.M., office@arws.cz, +420 245 007 740)

A framework agreement is not actually a contract

A framework contract is used to negotiate the basic rules that will govern future specific (so-called performance) contracts, unless otherwise agreed in a specific contract.

Rules for the formation of a performance contract

At the inception of a performance contract (e.g. a purchase contract) concluded on the basis of a framework contract, the rules agreed in the framework contract become part of the content of the performance contract. This applies unless the parties agree otherwise in the implementation contract. This means that the framework contract acts as a kind of 'super-agreement' on how individual deliveries or contracts will be carried out.

The position of the Supreme Court

The Supreme Court has repeatedly held that a framework agreement does not create mutual rights and obligations. According to the Supreme Court, a framework agreement does not create a contractual relationship and therefore the claims and obligations of the parties do not arise from it. The importance of the framework agreement lies in the fact that it lays down the basic rules for all specific (so-called implementation) contracts that will be concluded on its basis in the future, unless otherwise agreed in the implementation contract.

What is the function of a framework agreement?

A framework contract therefore has no other meaning than to set out the contractual terms and conditions for the specific implementation contracts to be concluded subsequently, thereby predetermining their content.

The framework agreement as terms and conditions

According to the Supreme Court, a framework agreement is essentially a type of general terms and conditions within the meaning of section 1751 of the Civil Code (CC). This concept is not optimal, because the will of both parties is to be bound by the contract due to the intended causality of the mutual relationship.

The meaning of framework contracts in the Civil Code

With the advent of the new Civil Code, the importance of framework contracts has increased. If a framework contract is not a contract stricto sensu, it must be viewed at least in the light of Article 1726 CC as a means of proof.

Evidence and manifestation of intent

If the parties consider the contract to have been concluded even though they did not in fact agree on a detail which they should have agreed in the contract (e.g. the purchase price), the expression of their will is regarded as a concluded contract if it can be assumed that they would have concluded the contract even without this detail.

Burden of proof and contracts of sale

The biggest problem with this provision is the issue of the burden of proof. If the parties conclude a framework contract for the supply of moulds without fixing a purchase price, the price will only be determined by the market situation. The party claiming that the contract was concluded even without fixing a price must bear the burden of proof. The law takes into account in particular the subsequent conduct of the parties, but may also take into account previous conduct, which may include the framework contract as evidence.

The validity of a contract of sale according to case law

According to previous case law, a contract of sale would not be valid in a similar case (23 Cdo 298/2009). The Supreme Court argues that the parties did not agree to enter into a contract of sale without fixing a price, which is a mistaken approach. It is clear from the contractual agreement that the parties intend to conclude a purchase contract with price determination, but only after they agree on the price. If they do not agree, the contract will not be concluded. In my view, this approach is wrong.

Conclusion

The framework contract, although it does not in itself create direct rights and obligations, plays a key role in commercial relationships. It lays down the ground rules for future implementation contracts, thereby facilitating and speeding up their conclusion. Thanks to the new Civil Code, it also gains importance as a means of proof, which increases its relevance. Understanding the function and legal implications of the framework agreement is therefore essential for the effective management of long-term business relationships.