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Insights · Business and company law

Termination of a commercial contract: how to protect yourself

4 min read

A contract is binding on its parties: Article 230 of the Code of Obligations and Contracts (DOC) sets out this principle. In principle, one party cannot free itself from its commitments alone, unless the contract or the law allows it.

Reread the contract

  • Duration, renewal and termination terms.
  • Notice clause.
  • Termination clause and penalty clause.
  • Jurisdiction clause or arbitration clause.

The formal notice

Before acting, the party suffering the breach sends a written, precise and dated formal notice. It sets a deadline for performance and is often a condition for obtaining damages.

Legal options

The creditor can ask for enforced performance of the obligation or for termination of the contract, with damages in both cases (Article 259 DOC). Between traders, the commercial court has jurisdiction in principle, unless there is an arbitration clause.

Prevent rather than litigate

Clear terms and conditions, signed purchase orders and kept written exchanges make proof much simpler on the day a dispute arises.

The firm's view

A well-drafted formal notice settles a good share of commercial disputes on its own.

Maître Malak Elimani advises companies on drafting their contracts and represents them before the commercial court. This article provides general information and is not a substitute for legal advice.

The information on this website is general and does not replace legal advice. Every situation requires an analysis of its own facts and documents.

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