What is a contract?
The contract is an essential institution of commercial traffic which, in addition to serving as a channel for organization and collaboration , is the legal instrument on which the circulation of goods and services is based.
However, our legal system does not regulate – except in bankruptcy law – legal transactions and contracts concerning the company.
This leads to atypical contracts.
What are atypical contracts?
They are those in which the parties, using their autonomy of will, regulate their relationships in a new and “unknown” way by the legal system, not adhering to any pre-established contract model.
Its main purpose is the constitution of an obligatory bond with the force of law ( art. 1091 CC )).
Consequently, the parties can use the most well-known contractual formulas or their own acts.
These contracts may derive from agreements, clauses and conditions established by the parties in the exercise of contractual freedom.
Either by the combination of various contractual types or different benefits (mixed contracts) or by those that lack any type of regulation.
Another example of a contract could be a commercial representation contract.
The service provision contract
Definition of the service provision contract
A service contract is one in which one person undertakes to perform an activity or work independently for another in exchange for a fixed price . A service contract is defined in Article 1544 of the Civil Code: “In a contract for works or services, one party undertakes to perform a work or provide a service to the other for a fixed price”; and it is regulated in Articles 1583 to 1587 of the Civil Code.
Characteristics of the service provision contract
- This contract is perfected by the mere consent of the parties (art. 1258 CC).
- A specific form is not required -with exceptions-.
- It is bilateral by producing obligations for both parties (reciprocal and synallagmatic).
- It is also onerous and commutative.
- And temporary.
This contract regulates its purpose , duration , and remuneration or price.
In addition to pointing out clauses such as:
- Business independence.
- Right to information.
- Industrial and intellectual property.
- Data provision and professional secrecy.
- Protection of personal data.
- Of responsibility.
- Of jurisdiction and regulations.
- Compensation in case of non-compliance by any of the parties.
Failure to comply with a service contract
In a service contract, the contracting parties are obliged to comply with contractual obligations.
Therefore, if there were a defective performance by one of the parties, there would be just cause to terminate the contract.
Article 1.124 CC provides that "the power to resolve obligations is understood to be implicit in reciprocal obligations, in the event that one of the obligated parties does not fulfill what is incumbent upon him/her."
The injured party may choose between demanding compliance or resolution of the obligation, with compensation for damages and payment of interest in both cases.
You may also request the resolution, even after having opted for compliance, when this proves impossible.
The Court will decree the resolution that is claimed, unless there are justified causes that authorize it to set a deadline.
In other words, once the breach has occurred, the injured party is given the option of choosing between demanding forced performance or the termination of the obligation.
Although if you initially opt for compliance and this is not possible, the resolution may be of interest later.
In both cases, if damages have occurred, compensation will proceed.
The right to terminate a contract expires after 5 years, in accordance with the amended art. 1.964 CC.
The period begins when the breach occurs, as indicated in the AP ruling. Madrid, Sec. 8, of 07-30-2010 (SP/SENT/521488).
For the resolution action to be viable, the following requirements must meet:
- Existence of a contractual link between those who arranged it.
- Reciprocity and enforceability of the benefits stipulated therein.
- Serious breach of the defendant.
However, a penalty clause may be incorporated into the contract, which, according to article 1152 CC :
“It will replace compensation for damages and the payment of interest in the event of non-compliance, if nothing else has been agreed upon.”
Model contract for the provision of services
Below you can see a sample service provision contract.
If you want it in PDF or Word format, write to us at [email protected]
Contract of service
In (City), on (day), of (month), of (year)
TOGETHER
On the one hand, (INDICATE COMPANY), with NIF (Nº), registered office at (ADDRESS), represented in this act by (INDICATE NAME), of legal age, with DNI (Nº), in her capacity as sole Administrator, and with domicile for the purposes of this agreement in the aforementioned.
And on the other hand, (INDICATE COMPANY NAME AND ITS DATA), hereinafter CUSTOMER.
Who recognize the necessary capacity in law to be bound, which they do by common agreement through this document and for this purpose:
EXPOSE
1st.- That (COMPANY NAME) is a company dedicated to providing services of (indicate).
2nd.- That the CLIENT is interested in acquiring the services of (COMPANY), for which he/she agrees to establish the terms of their business relationship.
CLAUSES
First.- The entity ( NAME ) contracts the services of ( COMPANY ) to ( DESCRIBE SERVICES ). The CLIENT will receive ( DESCRIBE DELIVERABLES AND THEIR FORMAT ).
Second.- The duration of this contract will be ( Number ) months, starting from the day after its signing. The project will be completed ( INDICATE WHEN ).
Third.- The CLIENT ( INDICATE NAME ) will pay the amount of ( INDICATE PRICE ), as follows (indicate conditions). Thus, the CLIENT will pay to account number (X) the amount of (INDICATE PRICE), during the X days of each month, counting (indicate month) as the first month.
Fourth.- The price does not include the investment in ( SPECIFY ). Likewise, any additional service not included will be quoted separately, and must always be approved in advance by the CLIENT.
Fifth. The CLIENT shall provide ( COMPANY ) with all data deemed necessary for the provision of the service. ( COMPANY ), for its part, undertakes to protect this data under a duty of confidentiality. This data will be incorporated into ( COMPANY's ) customer file , which undertakes to protect it under a duty of confidentiality in accordance with Organic Law 3/2018 on Data Protection.
Sixth. – This agreement shall be governed by Spanish law, which shall also apply to its interpretation, validity, and performance. For any dispute or litigation arising from this agreement, the parties, expressly waiving any other jurisdiction that may apply, expressly submit to the jurisdiction and competence of the Courts of (INDICATE CITY).
And to be fulfilled in good faith, they sign this document in duplicate and for a single effect in the city and date indicated at the beginning.
Price of a service provision contract
The cost a lawyer charges for drafting or reviewing a service agreement can vary widely depending on several factors:
- Complexity of the contract.
- Geographic location.
- Experience and reputation of the lawyer.
- Scope of legal services required.
Lawyers generally use different fee structures for this type of work.
Some of the common fee structures we might encounter include:
Hourly rate
The cost per hour varies depending on experience and geographic location, but can range from a few hundred euros per hour to more than a thousand euros per hour, especially in metropolitan areas.
Fixed rate
This fee is agreed upon in advance and does not change, regardless of how long the job takes.
Value Based Fee
In some cases, attorneys may set their fee based on the value of the contract or transaction.
This means that the higher the value of the contract, the higher the legal fee.
Hybrid rates
Some attorneys may use a combination of hourly rates and flat rates, depending on the nature of the work and the needs of the client.
It is important to openly and transparently discuss with the attorney their fees and how the fees will be structured before retaining their services.
Additionally, it is advisable to obtain a written estimate to avoid financial surprises.
The exact fee that a lawyer will charge for drafting a contract for the provision of services will vary depending on the factors mentioned above.
At RRYP Global we always offer a fixed price, ask us without obligation.
RRYP Global , lawyers specializing in commercial and corporate law.
