Business ideas become reality and generate profit, largely through the conclusion of contracts. In order to produce and sell a finished product, it is necessary to sign a supply contract for raw materials or components needed for its assembly. To deliver the product to the end customer, a transportation contract must be concluded with a carrier. Even with the buyer of the product, a contract must be signed.
However, there are cases when parties rely on so-called “gentlemen’s agreements” due to personal relationships or the specific nature of their work and do not formalize their agreements in writing. When misunderstandings arise, it becomes quite difficult to prove, in the midst of a dispute, what each party originally intended and what outcome they expected. In such cases, the role of lawyers is to gather evidence and substantiate all relevant circumstances.
The approval of a transaction can take various forms. It may occur explicitly if the represented party has provided written confirmation, or implicitly through conclusive actions that indicate acceptance of the transaction (such as making a payment to a counterparty, receiving or transferring property, etc.).
In our legal practice, we frequently encounter situations where contracts are signed without a thorough analysis of their terms. As a result, the final signed agreement—legally binding for both parties—may significantly differ from the terms originally discussed during negotiations. It is not uncommon for one party, typically large corporations or holding companies, to insist on using their own version of the contract, which places the other party at a disadvantage. They justify this by citing the complexity and duration of their internal approval processes for contract amendments, while verbally assuring the other party that the unfavorable provisions will not be enforced.
However, when a conflict arises—especially in the case of litigation—the signed contract and all of its provisions, including the unfavorable ones, are applied. This often leads to situations where agreements that were expected to generate millions in profit instead result in substantial financial losses due to the lack of professional legal review.
Beyond these issues with counterparties, it is also crucial to assess the tax risks associated with specific agreements. Hidden tax risks can not only negate the anticipated economic benefits but may also result in the contract being deemed invalid or void by tax authorities (e.g., as a sham, fictitious, or non-genuine transaction). In some cases, they can even lead to criminal liability for the individuals involved in concluding the agreement.
To avoid such risks and complications, it is essential to involve highly qualified legal professionals in contract drafting and negotiation. Experienced lawyers will not only conduct a comprehensive analysis of the transaction and select the most effective contractual framework but also assess the agreement for potential tax risks, ensuring its legal and financial viability.
Contract Support by WinnerLex Law Firm includes a wide range of services, including:
- Legal consulting on issues arising in the course of contract work within the company;
- Participation in pre-contract negotiations on behalf of the client;
- Drafting contracts and international trade agreements, both customized and standard templates that clients can use for future similar transactions (including purchase and sale, supply, contracting, lease, transportation, service provision, loan agreements, pledge agreements, surety agreements, and international trade contracts);
- Legal risk assessment of contract drafts and international agreements provided by the client or their counterparty;
- Support in contract amendments or termination procedures.
Practice experience: 19 years
Specialization: litigation support, tax, customs and antitrust practices, agricultural law, IT and M&A
Practice experience: 21 years Specialization: support of economic, civil, labor and administrative disputes, energy
Practice experience: 11 years Specialization: tax, customs and corporate disputes, support of inspections, contractual activities
Practice experience: 6 years
Specialisation: business and civil law, tax and customs practice, corporate law, registration and reorganisation of business
Practice experience: 11 years Specialization: support of economic, civil, labor and administrative disputes, inspections
Contracts with foreign partners must take into account both international standards, such as Incoterms, and the interaction between Ukrainian national legislation and the laws of your counterparty’s country. These legal differences can significantly impact the regulation of currency transactions, taxation, customs procedures, and other key aspects, potentially leading to serious issues during the execution of an international trade contract.
Certain types of contracts, such as leases of state property, land leases, supply of natural gas to household consumers, and electricity supply to consumers, have standard forms approved by relevant regulatory acts. Therefore, these contracts must comply with the established standard forms.
The parties have the right to conclude a contract that combines elements of different types of agreements—a mixed contract (e.g., a sales and warehousing contract or a supply and service contract). The legal provisions governing each type of contract included in the mixed agreement apply to the respective parts of the parties’ relationship unless otherwise stipulated in the contract or implied by its nature.
In government bodies and budgetary institutions, specific provisions regarding the procedure for contract management are often adopted through relevant orders, which establish certain specifics for the conclusion and performance of contracts with these entities. The Civil Code and the Commercial Code of Ukraine also set out certain nuances regarding the content of contracts (quality requirements, penalties), their execution, modification, and termination, where one of the parties is a state-owned enterprise or where the performance of the obligations is financed from the State Budget of Ukraine or through state credit.
Disputes arising from the conclusion of commercial contracts under state orders, or contracts that are mandatory by law and in other cases specified by law, are considered by the court. Other pre-contractual disputes may be subject to judicial review if provided for by the parties’ agreement or if the parties are obligated to conclude a specific commercial contract based on a preliminary agreement entered into between them.
As a general rule, a commercial contract is executed as a single document signed by both parties. However, contracts may also be concluded in a simplified manner—through an exchange of letters, faxes, telegrams, or telephone messages, as well as by confirming the acceptance of orders for execution—unless specific legal requirements for the form and procedure of concluding such contracts are established by law.
As a general rule, if the parties fail to reach an agreement on all essential terms of a commercial contract, the contract is considered not concluded (i.e., it has not come into effect).
However, if the contract is being concluded under a state order, refusal to enter into the contract constitutes a violation of commercial law and entails liability as provided by legislation. Disputes related to the conclusion of a state order contract, including cases where one or both parties evade signing it, are resolved through judicial proceedings.
Unilateral amendment or termination of contracts is not permitted, unless otherwise provided by law or the contract.
