What conclusion can be made? A framework agreement between business entities can be recognized as an independent legitimate transaction only if it contains detailed clauses describing the terms and circumstances of the agreement between the parties.
In accordance with paragraph 1 of Article 432 of the Civil Code of the Russian Federation, a contract cannot be considered valid if there is no documentary agreement between the parties on the terms of the contract, and such a document does not have any legal consequences until a separate agreement is signed and approved, setting forth the obligations of the counterparties, the subject of the transaction, the terms of execution and liability.
However, the framework agreement may set out local conditions, primarily of an organizational nature, which may be in force until the essential conditions have been agreed upon. For example, guarantees, arbitration clauses, declarations of circumstances, etc.
In this case, the framework agreement job seekers data package as a legal document generates legal consequences for the counterparties only in terms of organizational conditions. All others will come into force after signing contracts specifying the circumstances of the upcoming transaction.
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Specification of conditions by forming unilateral orders
The contracting parties have the right to enter into an agreement that the supplementation of essential conditions will be carried out not by drawing up additional contracts, but on the basis of an application from the counterparty.
The framework agreement may contain a product nomenclature with the unit cost of the product. The size of the batches, delivery times, and logistics chains will be determined by the orders that are completed and submitted in a timely manner. As soon as the application is received by the supplier of the goods, the condition on the subject of the supply agreement acquires the status of agreed.
Specification of the terms of the framework agreement
Source: shutterstock.com
In order to avoid legal and business conflicts, it is better to precede this form of cooperation by agreeing on limits in advance. Within their framework, the party that determines the missing essential condition can express its will. For example, for the organization of work, this may be the start and end dates, the composition of machinery and equipment, the volume of actions performed in one work shift, etc.
This model of implementing a framework agreement does not impose any liability on the parties other than that expressly stated in the text of the contract.
In scientific literature, many specialists pay attention to the aspect of interaction between commercial entities in the legal plane. In particular, the problem of using framework agreements with execution by preliminary orders was mentioned in his commentary to Art. 429.1 of the Civil Code of the Russian Federation by Doctor of Law, Professor A. G. Karapetov, in which he proposes to consider such an agreement as a type of option agreement.
In essence, a preliminary agreement is intended for long-term, repeated use without specifying the subject and conditions. But, on the other hand, there are all the signs of an option agreement, since the execution is determined by a unilateral expression of will, to which the counterparty cannot be forced. The decision to form an order is made by the party independently.
But the courts still remain conservative when making decisions and in practice do not make such conclusions about the framework-option genesis of the contract, supplemented by unilateral applications. At least, such formulations are not found in published decisions.
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