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In Sweden, there is a basic freedom to contract. This means that in most cases, there are no formal requirements on the format of business documents. Certain expressions, terms, and terms and conditions of contract are common, however. Make sure that you find out exactly what they mean, so that no misunderstandings occur. In all cases, you are required to fulfil the obligations that you undertook by entering into the contract.
Contracts in writing make things easier
Some types of contract must be in writing, for example for the conveyance of real property, and collective agreements. In practice however, many contracts are entered into orally. Contracts in writing are good because they reduce the risk of the parties having different understandings of the content of the contract, and this makes things easier for both the buyer and the seller. It is easier to specify the details about a product or service and other contractual terms and conditions in a written document. It can be difficult to remember the terms of the contract and even more difficult to prove them without a written document.
What is usually included in a contract
- The parties to the contract
- The rights and obligations of the parties under the contract
- The subject matter of the contract (what the contract concerns)
- Payment and delivery terms
- Contract period
- Sanctions in the event of a breach of the contract
- Methods for settling disputes.
A standard contract is a contract that contains a number of predetermined contractual terms which one or more of the parties want to apply to a specific type of contract. Standard contracts may arise on the initiative of an individual enterprise or one or more industry organisations. The terms and conditions in a standard contract are rarely negotiable. In other words, you must accept the standard terms and conditions for an agreement to be reached. This applies to contracts with banks, for example.
Unilateral standard contracts
Sellers often have ready-made standard contracts for their goods and services. Their standard terms and conditions often contain provisions covering fault liability, warranties, delays, etc. The legal quality of these standard contracts can vary, so it is important that as a purchaser you carefully read the contract before you sign it.
Jointly developed standard terms and conditions
Standard contracts are common in many industries. A standard contract is a contract drawn up in advance that is applied across the board within a certain industry. Its purpose is also to spread the risks between the parties in the contractual relationship, and to clarify the legal position. Often groups of enterprises or industry organisations have agreed on standard contracts to make the contractual process easier and more efficient.
As a new entrepreneur, you should find out whether standard contracts are used in the industry in which you intend to establish your business. Industry organisations often have information about the standard contracts that exist in their industry.
Benefits of standard contracts
Standard contracts that are jointly developed are generally drawn up by skilled lawyers and used for a long period of time and therefore using them can save you time and money. Since much of the content of the contract is already complete, the parties can focus on the individual details that are particular to them. Another benefit is that a standard contract can cover situations that the parties to the contract might not have thought to include in the contract.
A risk of using standard contracts can be that their users have insufficient knowledge of the contract and use it in a situation that is not appropriate. Remember to read the small print in the contract so that you do not miss essential contract terms.
No right of withdrawal for entrepreneurs
When contracts are entered into at a distance, for example over the phone, as a general rule, consumers have the right to withdraw from the contract (right of withdrawal). For entrepreneurs, there is no counterpart to this right. Instead, the general legal principle that contracts must be honoured is applied. Even sole traders are counted as entrepreneurs. So you should be careful not to accept an offer if you do not know what it entails. You cannot undo your acceptance afterwards.
Responsible: Swedish Agency for Economic and Regional Growth