Drafting Contracts in Cyprus
Cypriot Contract Law is based on the principles of freedom of contract, meaning that parties are free to enter into any contract they choose, provided it is not contrary to public policy or law. For contracts – agreements to be enforceable, it must be in writing and signed by the parties and must contain all the essential elements of a contract, including offer, acceptance and consideration.
In some cases and especially in Cyprus under provisions of Equity law, in some cases even verbal promises can be considered as a verbal contact and still be enforceable. The main legislation on Contract Law in Cyprus is the Contract Law Act, CAP 149.
According to Cypriot law, an Offer is an expression of willingness to enter into a contract on specific terms and must be final and unconditional. Acceptance is a clear and unequivocal expression of assent to the terms of the offer. Consideration is something of value given in exchange for something else and can be either a promise to do something or a promise not to do something.
An important aspect of Cypriot contract law is the concept of good faith, which requires parties to act honestly and reasonably in their dealings with each other. This means that the parties must not take advantage of each other or engage in any conduct that is likely to mislead or deceive the other party.
For that reason the terms of a contract shall be fair for both parties, providing rights and obligation on an equal scale. We suggest you contact us first if you are considering to sign any contract and ask for our expert legal opinion on Contract Law in Cyprus.
Breach of Contract:
Another important concept in Cypriot contract law is that of breach of contract, which occurs when a party fails to fulfill its obligations under the contract.
When a breach of contract occurs, the non-breaching party may be entitled to seek damages or other remedies such as special enforcement and/or specific performance, which require the party to fulfill its obligations under the contract, after Court issues an Order.
Different Types of Contracts - Agreements in Cyprus
In Cyprus, contract law recognizes various contract types, which include express, implied, and quasi-contracts. Express contracts involve terms explicitly stated by the parties, whether written or spoken. Implied contracts, on the other hand, are based on the actions and conduct of the parties.
In situations where one party receives a benefit at the expense of another without any intention of creating a contract, quasi-contracts come into play. Moreover, Cypriot law has specific provisions that apply to particular contract types, such as contracts of employment, contracts for the sale of goods, and contracts for services.
The principles of freedom of contract and good faith form the basis of Cypriot contract law. Parties must enter into written and consideration agreements and are obligated to fulfill their obligations under the contract. If one party breaches the contract, the other party may seek damages or other remedies. It is essential to understand the specific provisions of Cypriot law that apply to different contract types to ensure compliance and avoid legal conflicts.
Employment Contracts - Agreements in Cyprus
Employment contracts are legally enforceable agreements between an employer and an employee in Cyprus. These contracts specify the terms and circumstances of employment, such as job responsibilities, working hours, remuneration, benefits, and termination restrictions.
Employment contracts in Cyprus can be written or oral, although it is usually preferable to have a formal agreement in place to avoid misunderstandings or disagreements.
The contract must meet the basic standards of several Employment Laws which regulates matters such as:
- Minimum wage
- Οrganization of the workplace
- Αnnual leaves
- Working Hours
- Health and Safety
- Maternity and Paternity Rights
- Equal Rights of Men and Women
- Social Insurance Contributions
- General Health System Contributions
It is highly recommended to engage the services of a contract lawyer to draft or review your agreement prior to executing it.
Rental Agreements in Cyprus
The Rent Control Law of 1983, as modified, governs rental agreements in Cyprus. This Act establishes the legal basis for renting agreements, covering both landlords’ and renters’ rights and duties. A rental agreement must be in written and signed by both parties, according to the law.
It should also include vital information such as the rent to be paid, the frequency of payments, the length of the lease, and any terms and conditions relevant to the rental property. Landlords must send a copy of the contract to renters within one month of the commencement of the tenancy, and both parties are required to follow the provisions of the agreement.
The Rent Control Court in Cyprus has jurisdiction over landlord-tenant issues and can issue orders for rent increases, reductions, or tenancy termination, among other remedies.
It is very important to get a Lawyer in Cyprus to verify that your rental agreement conforms with Cyprus’s Rent Control Law and any other applicable legislation.
Private Bonds Agreements
It is governed by Article 78 of Contract Law CAP. 149 It is called a “bond in customary form” and it’s a written promise made by one person to another in the presence of at least two witnesses who are capable of making contracts. It states that the person will pay a certain amount of money with interest (up to 9%) on demand or at a fixed date. The bond also covers any legal costs related to the agreement. The consideration for the bond is also mentioned in the document.
In legal proceedings, the content of the bond serves as undeniable evidence of the facts stated in it. If the signature of the debtor or other signatory is not genuine, or the bond was issued under duress or fraud, these are valid defenses in court. To protect your rights, it is essential to ensure that any bonds you sign are legitimate and not obtained through illegal means.
Franchise Agreements in Cyprus
The franchise agreement is essentially a license agreement, though the term “franchise” has evolved to have a different meaning than its Anglo-French origins suggest. The franchisor-franchisee relationship is governed by typical contract law principles and supplemented by statutory rights and obligations as applicable.
It is essential to keep in mind, however, that there is presently no regulation governing franchise agreements.
To comply with Cypriot competition law, contract law, and intellectual property law, all franchise agreements must meet certain requirements. Regarding the applicable law for a franchise contract, the EU Regulation (EC) No 593/2008 on the Law Applicable to Contractual Obligations (“Rome I”) Article 4 states that in the absence of choice, the law of the country where the franchisee resides governs the agreement.
Franchise agreements are classified as vertical agreements, which fall under the scope of competition law block exemptions granted under Section 5(1) of the Protection of Competition Law of 2008 (13(I)/2008), amended by Law (41(I)/2014). The Council of Ministers may issue an appropriate order under this law.
For example, with an order issued in 1998, defines a franchise agreement as “the total of intellectual property rights related to trademarks and trade names, shop signs, standards, designs, copyrights, know-how, or patents for the resale use of products or services to end-users.”
If you are interested in hiring a Contract Lawyer to draft or review a Franchise Agreement for your business and your Intellectual Property, you need to contact us.
Agreements on Share Purchase and Shareholders
If two companies wish to merge their activities by having one company purchase the other, the recommended approach is to use a share purchase agreement. This agreement involves the surviving firm buying most, if not all, of the shares of the target company, thereby becoming its legal owner.
However, this type of transaction requires thorough due diligence since the surviving company will assume responsibility for all of the target company’s assets, employees, rights, obligations, and existing debts.
Terms and Conditions for Websites
Terms and conditions are vital for a website since they provide the rules and standards for using the website, including any liability restrictions and the user’s duties while using the website.
They also safeguard the website owner from future legal problems by outlining the user’s responsibilities and obligations. Terms and conditions may also include information on the website’s privacy policy, payment and delivery terms, and any disclaimers or warranties regarding the website’s content or services.
Overall, having clear and thorough terms and conditions may assist build confidence with consumers while also lowering the chance of legal complications for the website owner.
It is typically recommended that website terms and conditions be created or reviewed by a lawyer. This is due to attorneys’ competence in understanding and interpreting the applicable laws and regulations that apply to website terms and conditions, and they may assist in ensuring that the terms are legally binding and enforceable.
Furthermore, a lawyer may assist in ensuring that the terms and conditions are adapted to the needs of the website and the sort of business being performed. They may also help ensure that the terms and conditions are in accordance with applicable laws and regulations, which may differ depending on the jurisdiction in where the website is located.
Sale and Purchase of Real Estate Contract
The Sales and Purchase Agreement needs to correspond to your specific case needs and the peculiarities of the property and the factors governing the sale.
The purpose of this Agreement is to ensure the rights of the seller over the property. Once the Contract is drafted and signed between the seller and the buyer, we undertake to register it at the Land Registry Department. In order to register it at the Land Registry Department, the Contract must first be validated by the Department of Internal Revenue and stamped beforehand. Once the Contract is validated, it can then be registered at the Land Registry Department.
After sealing and recording the Contract in the Land Registry system, the buyer secures ownership rights until an independent ownership title is issued.
With the deposit of the Contract, the Agreement is now “locked” and the buyer acquires legal rights over the property, while the seller/owner loses the right to transfer the property to another person.
If any of the contracting parties (buyer or seller) are abroad, the process can be completed by appointing the Lawyer by signing a Power of Attorney document.
Contact us
If you require additional information on matters related to Contract Law, don't hesitate to contact us. Our team is here to answer your questions and provide any necessary assistance. Our experienced Contract Law Attorneys are skilled at drafting tailored contracts to suit your specific needs. Contact us today to learn more.
A WELL DRAFTED CONTRACT IS A POWERFUL WEAPON
Make sure you always sign contracts which ensure your rights and your benefit.