Five Essential Clauses in Commercial Contracts

It must be clearly defined, with the main obligations precisely established. In the case of contracts with a complex contractual object, reference may be made to an annex setting out as clearly as possible the limits of the obligations – the clearer the contractual object, the easier it will be to determine subsequently what is covered by the price agreed by the parties.

Depending on the type of contract and the nature of the obligations, the clauses may establish either explicit or implicit deadlines. It should be noted that the term of the contract does not always coincide with the execution period, and the two should not be confused.

The price must be determined as clearly as possible: either fixed (a clearly specified sum) or determinable on the basis of elements expressly agreed by the parties.

The payment deadline must be clearly established. References to insufficiently clear conditions or to uncertain future events as regards the date on which they will occur should be avoided.

The modalities and conditions under which the parties may request or notify the termination or rescission of the contract, whether unilateral termination is permitted, and what damages or penalties are to be borne by the parties in the event of non-performance (e.g. delay penalties).