Entering into a contract

A contract can be entered into orally, in writing, or in any other form, if the law does not provide a mandatory form of the contract.

In order to enter into a contract, mutual declarations of intent must be exchanged. The contract is considered to have been entered into once the material terms of the contract have been agreed upon. In legal jargon, declarations of intention are an offer and its acceptance.

An offer is a proposal to enter into a contract; its content and material terms must be sufficiently defined, and it must be presented to a specified range of people. One example of an offer would be a signed project for a cable television contract that has been sent to the home address of a particular person. If the customer signs (accepts) such a document and sends it back to the cable television company, the contract has been entered into. A request made to a salesperson in a shop to get a specific product from behind the counter can also be regarded as an offer.

An acceptance is the affirmative reply to an offer, the approval for entry into a contract. For the contract to be entered into, the acceptance must correspond to the offer with regard to content. With the receipt of acceptance, the contract is considered as entered into and the parties obtain the right to demand the fulfilment of contractual obligations. If the declaration of intention sent in response to an offer contains substantially different terms compared to the initial offer, it is no longer an acceptance but a new offer, which the other party to the negotiations must in turn accept for the contract to be entered into.

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Compiled by: Ministry of Justice