Who we help
- Companies with frequent contracts with customers and suppliers that want their own terms and not the other party’s.
- Business owners about to sign an important contract, such as an exclusive distribution, an agency or a franchise, who want to know what they are committing to.
- Companies that receive a contract drafted by the other party, for example by a large customer, and need to review and negotiate it.
- Companies with international partners or associates, that need contracts with a clear governing law and, where useful, a bilingual version.
What it is and when it makes sense
A commercial contract is one entered into by businesses in the course of their activity. It is governed by what the parties agree and, where that is silent, by the Commercial Code, special laws and the general rules of ordinary law (article 50 of the Spanish Commercial Code). It is valid whatever the form and language in which it is made, as long as its existence can be proved (article 51), and it must be performed in good faith, according to the terms in which it was drafted (article 57). The parties may agree whatever clauses they wish provided they are not contrary to the law, morality or public order (article 1255 of the Civil Code). That freedom is what makes it important to draft them well.
The most common are these:
- Services between businesses.
- Sale and supply of goods.
- Distribution, with or without exclusivity, which has no law of its own: its effects, above all when it ends, depend on what is agreed.
- Agency, which does have a specific law, Law 12/1992: the agent promotes commercial transactions on behalf of someone else on a continuing basis in return for remuneration (article 1).
- Franchise, business cooperation and joint ventures.
- Confidentiality (NDA), to share sensitive information with a third party.
When it makes sense
- Before signing, especially if the contract is long-term, includes exclusivity or commits the company to significant amounts.
- When the other party presents its own template and the clauses favour it more than they favour you.
- When the company signs the same type of contract many times and would benefit from its own standard contract.
- When information or technology is going to be shared and needs protecting.
When it does not
- For minor or standard contracts on non-negotiable terms, such as a general-use service, an individual review is not normally worthwhile. It is more useful for us to help you decide which ones deserve that attention.
- If the contract has already been breached, the priority is not to draft another one but to analyse what the existing one says and what options there are. A party that suffers a breach can demand performance or terminate the contract and, in both cases, claim damages and interest (article 1124 of the Civil Code).
That is why, before proposing any work, we check whether there is a simpler and less costly solution; if there is, we will tell you.
When it makes sense
- You are about to sign a distribution, agency or franchise contract and want to know what happens to the exclusivity, the customers and the stock when it ends.
- A customer proposes its contract and you do not know which clauses to accept.
- You want your own standard contract for your customers or suppliers.
- You are going to share confidential information with a possible partner or supplier and need a confidentiality agreement.
- The other party is in breach and you want to know your options before acting.
What the engagement can include
- Drafting tailor-made contracts: services, supply, distribution, agency, franchise, cooperation and confidentiality.
- Reviewing and negotiating the other party’s contracts: exclusivity, duration and termination, liability, penalties, price and payment, and governing law and jurisdiction.
- Standard contracts and general terms for the company’s repeated transactions.
- International contracts: governing law, language and bilingual versions.
- Analysing breaches: which clauses cover them and what routes the company has.
- Coordination with your tax and financial advisers on the impact of the agreed terms.
What the scope depends on
- The type of contract, its duration and the value of what it commits.
- Whether it must be drafted from scratch or someone else’s reviewed, and how much room there is to negotiate.
- Whether it has an international element.
- How many standard contracts the company needs.
- The urgency: reviewing before signing is not the same as reacting to a breach.
Once we have studied the documents, we send you a quote tailored to your case.
How we work
- Initial contact. You tell us about your situation and send us the documents.
- Review of the documents and proposals. We review the contract, or the other party’s draft, and set out which clauses should be drafted or negotiated.
- Quote and letter of engagement. We send you the quote and the letter of engagement in writing.
- Implementation and follow-up. We negotiate with the other party and its advisers, see the process through to signing, and coordinate with your tax adviser or accountants (gestoría).
Who handles your matter
Your contracts are handled directly by Sara González Domínguez, a practising lawyer (abogada) registered with the Málaga Bar Association (no. 8502), whose practice focuses on Spanish company and commercial law, with particular emphasis on corporate architecture, holding companies and M&A transactions, always backed by the rest of the firm’s team.
If the company needs contracts reviewed on an ongoing basis, we handle it within our external legal counsel service, on a monthly retainer.
Illustrative example: a company in Álora wants to distribute a foreign manufacturer’s products exclusively in Spain. The manufacturer proposes five years of exclusivity, minimum purchase targets and the right to terminate the contract without giving a reason. Before signing, the company negotiates a term with a renewal option, targets adjusted to the market, specific grounds for termination and what happens to the stock and the customers when the contract ends.
Frequently asked questions
What are commercial contracts?
They are the contracts that businesses enter into in the course of their activity, such as a distribution, a supply or a services agreement between companies. They are governed by what the parties agree and, where that is silent, by the Commercial Code, special laws and ordinary law. Their value lies in recording in writing what is owed, when, at what price and what happens if one party fails to perform.
What is the difference between civil and commercial contracts?
A commercial contract is made within the scope of business activity, normally between businesses, and is governed first by the Commercial Code and special laws; a civil one is governed by the Civil Code. In practice many rules coincide, because ordinary law fills the gaps in commercial law, so what matters most is usually what each clause says rather than the label on the contract.
What types of commercial contract are there?
The most common are the sale and supply of goods, services, distribution, agency, franchise, business cooperation and confidentiality agreements. Some have a law of their own, such as agency, and others, such as distribution, depend mainly on what the parties agree, which is why they should be drafted with care.
What is a distribution agreement?
It is the contract by which a manufacturer or supplier entrusts another company with reselling its products in a territory, with or without exclusivity. It has no law of its own as agency does, so it is worth agreeing in detail the duration, the targets, the exclusivity, the prices and what happens to the stock and the customers when it ends.
What should a services agreement between companies include?
At a minimum, a description of the service, the price and payment terms, the duration and the ways of ending it, each party’s responsibilities and the quality levels required. It is worth adding confidentiality, ownership of the results, the governing law and how disputes are to be resolved. The more specific the service, the less room there is to argue about whether it has been performed.
What is an NDA?
It is a confidentiality agreement, short for non-disclosure agreement. It allows one party to share confidential information with another, for example before negotiating a sale or a collaboration, without the other being able to use or reveal it. It should define what information it protects, what it may be used for, how long it binds the parties and what happens if it is breached.
What should I do if the other party breaches the contract?
First, read what the contract says: deadlines, grounds for termination, penalties and notices required. In general, a party that suffers a breach can demand performance or terminate the contract and, in both cases, claim damages. Before acting, it is worth gathering evidence and notifying the breach in writing, so as not to lose rights.