There are often situations in which customers meticulously list and record the terms of the framework agreement, but after the start of cooperation they forget to document all the essential terms that were not previously reflected. That is, in essence, they do not have a main agreement with the counterparty.
What are the possible consequences? Since the framework agreement is rather declarative in nature, i.e. it does not contain the exhaustive terms of the contract, its signing implies subsequent correction (clause 1 of Article 432 of the Civil Code of the Russian Federation). Thus, all further work on coordination will be unproductive if it is not planned to draw up the main contract. After all, in the absence of documentary recording of the terms, volumes and cost of actions, it will be difficult to present claims to the counterparty.
Mistakes when concluding a framework agreement
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It is annoying when all additional conditions job seekers data package are specified and agreed upon, but the paperwork was not done properly. Taking advantage of this loophole, an unscrupulous partner, in case of a breach of the contract terms, can refuse to pay a penalty, citing the fact that the delivery of a specific batch of goods was not carried out under the current framework agreement, which means that its terms do not apply to this specific shipment.
The other party (the customer) may well take advantage of the negligence of the execution. For example, having presented the supplier with claims regarding the quality of the goods, the buyer, who is in fact the violator himself, refuses to make the payment.
A framework agreement was drawn up and signed instead of a preliminary agreement
Sometimes businessmen believe that the conclusion of a framework agreement guarantees the drafting of the main contract and gives the right to force the counterparty to fulfill obligations in the event of a breach of the agreed terms in court. Some entrepreneurs even include in the text of the framework agreement a clause on the conclusion of the main agreement within a certain period of time.
Consequences. The very status of the framework agreement excludes the possibility of defending one's position in court. There are no prospects of winning the case. During the proceedings, only the presence of a preliminary agreement is taken into account (Article 429 of the Civil Code of the Russian Federation).
What is the difference between this document and the other? The most important feature is the content of all essential terms of the contract that are planned to be concluded in the future. In other words, if the contract does not clearly state the cost, volumes of supply, etc., it will be considered a framework contract. The maximum that can be claimed in court is the payment of a fine by the partner for refusing to approve and sign the main agreement. And only if such a provision is contained in the text of the contract.
Frequently asked questions about the framework agreement
So, a framework agreement is a document drawn up by commercial entities, which defines the contours of future cooperation. Its conclusion is justified in cases where common points of contact have been found, but all the nuances of the interaction are not fully known, for example, delivery dates, volumes of goods, assortment, etc. have not been determined.
All these conditions are specified and recorded in a set of additional agreements that the counterparties will sign in the future.