Keith Mack
Swiss contract law is codified and available in several languages, including English. It provides parties with a high degree of autonomy and control over their contracts. To conclude a contract under Swiss law, three conditions must be met: the parties must be capable of acting, the parties must intend to enter into a binding contract, and the parties' declarations of intent must coincide. While rights are generally assignable under Swiss law, certain rights may be non-assignable or excluded by statutory restrictions. In the context of supply contracts, specific rights and claims can be assigned to a third party without the consent of the other party. However, the assignment of future claims is not enforceable in cases of the assignor's insolvency or bankruptcy.
| Characteristics | Values |
|---|---|
| Nature of Swiss contract law | Provides parties with maximum autonomy and control over their contract, more than almost any other jurisdiction. It is based on the principle of good faith, thus protecting the parties' reasonable and fair expectations. |
| Formation of a contract | Requires the exchange of an offer and corresponding acceptance between the contracting parties. Both offer and acceptance must contain the essentialia negotii of the contract (i.e., the work to be carried out and a specific or determinable contract price). |
| Parties to the contract | Must be capable of acting, must have the intention of entering into a binding contract (the "declaration of intent"), and their declarations of intent must coincide (actually or normatively). |
| Capability to act | Generally, every person above the age of 18 who does not lack the capacity to act rationally due to mental disability, intoxication, or similar circumstances is capable of acting. Legal entities can act once their governing bodies have been appointed. |
| Assignment of rights | Generally assignable, but specific rights (especially claims) can be assigned to a third party without the consent of the other party. Any assignment of claims must be made in writing to be valid. |
| Assignment of obligations | Requires the consent of the counterparty. |
| Assignment in case of insolvency or bankruptcy | The assignment of future claims is not enforceable if the claims have only arisen after the assignor has lost the capacity to dispose of them. |
| Enforcement by a third party | A third party may enforce a term of a contract only to the extent that the contract is structured as a true contract in their favor, providing them with their own right of claim. |
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What You'll Learn
Contract formation
To form a contract under Swiss law, three conditions must be met. Firstly, the parties to the contract must be capable of acting. Generally, this means that they are over the age of 18 and are not suffering from a mental disability, intoxication, or similar circumstances that would impair their capacity to act rationally. Legal entities are capable of acting once their governing bodies have been appointed.
Secondly, the parties must have the intention of entering into a binding contract, known as the "declaration of intent", which includes the offer and acceptance. This can be express or implied. An implied declaration of intent is derived from the conduct of a party and may constitute a declaration of intent if there are indications that, in good faith, point to a declaration of intent. For example, a lack of response to an offer may be considered an acceptance in exceptional cases where "express acceptance cannot reasonably be expected".
Thirdly, the parties' declarations of intent must coincide, either actually or normatively. Actual consent occurs when the parties intended the same thing with their declarations, while normative consent occurs when the recipient of the declaration was allowed – in good faith – to understand the declaration in a certain way, even if this was not the original intention of the declaring party. Both actual and normative consent result in a valid formation of a contract.
If there is neither actual nor normative consent, no contract is concluded. The parties must agree on the essential elements ("essentialia negotii") of a contract, which include all objectively and subjectively important points. These points usually follow from the legal definition of a type of contract in the Code of Obligations or case law.
In terms of language, the parties are free to draft a contract in whatever language they like. However, to enforce the rights under a contract before a Swiss court, it may need to be translated into an official language (German, French, or Italian) depending on the place of jurisdiction.
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Statutory controls
Swiss contract law is codified and available in several languages, including English. It is based on the principle of good faith, protecting the parties' reasonable and fair expectations. It also provides parties with maximum autonomy and control over their contracts, more so than almost any other jurisdiction.
In terms of statutory controls, Swiss law operates under a strict principle of privity of contracts, meaning that contractual rights exist only between the parties to the contract. However, the employer may assign the entire contract or certain rights to a third party, unless the parties have agreed otherwise.
For any assignment of claims to be valid, they must be made in writing. While rights are generally assignable, the assignability of certain rights may be excluded by statutory restrictions or the nature of the underlying legal relationship. For example, the assignment of future claims is not enforceable in the case of the assignor's insolvency or bankruptcy.
In the context of contract formation, the lack of response to an offer by a party may only be considered as an acceptance in exceptional cases, where "express acceptance cannot reasonably be expected". An example of an exceptional case is an ongoing business relationship between two parties, where the non-reacting party has not responded to other offers, and the transaction was executed according to the offer.
To conclude a contract under Swiss law, three conditions must be met: the parties must be capable of acting, they must intend to enter into a binding contract (offer and acceptance), and their declarations of intent must coincide. Generally, every person above the age of 18 who does not lack capacity due to mental disability, intoxication, or similar circumstances is capable of acting.
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Implied terms
In Swiss law, there is no direct comparison to the common law notion of "implied terms". However, non-mandatory statutory default provisions come into effect if the parties involved have not addressed certain issues in their contract. These provisions are outlined in Article 363-379 CO for construction contracts.
Swiss law operates under a strict principle of privity of contracts, meaning contractual rights generally exist only between the parties to the contract. However, the employer may assign the entire contract or specific rights to a third party unless the parties have agreed otherwise.
In the case of construction contracts, the contractor may terminate the contract if the employer unduly delays payment (Article 107(2) CO), if there is a substantial increase in the costs of the contractor's performance where a lump sum was agreed (Article 373(2) CO), or if the performance under the contract becomes impossible for reasons attributable to the contractor without any fault on their part (Article 379 CO).
Swiss contract law is based on the principle of good faith, protecting the parties' reasonable and fair expectations against sharp dealing. This means that an implied declaration of intent is derived from the conduct of a party, indicating in good faith a declaration of intent. Whether specific conduct constitutes an implicit declaration of intent is often a matter of dispute.
Furthermore, a certifier in a construction contract will usually undertake, expressly or impliedly, to act impartially, fairly, and honestly. If agreed upon by the parties, the certificates may have the binding effect of an agreement between them and will be treated as such by a court or arbitral tribunal.
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Third-party enforcement
Swiss contract law is codified and available in several languages, including English. It provides parties with maximum autonomy and control over their contracts, more so than almost any other jurisdiction. It is based on the principle of good faith, protecting the parties' reasonable and fair expectations.
Swiss law operates under a strict principle of privity of contracts, meaning that contractual rights generally exist only between the contracting parties. However, rights and obligations under a contract can be assigned to a third party without the consent of the other party, except in cases where consent is required by law or the nature of the underlying legal relationship. For example, the assignment of an obligation in lieu of and under the discharge of the former obligor requires the consent of the counterparty.
A third party can only enforce a term of a contract to the extent that the contract is structured as a "true contract in favour of third parties", providing the third party with its own right of claim. This third-party right can be based on law, agreement, or customary practice.
In the context of construction contracts, the employer may assign the entire contract or certain rights to a third party unless the parties have agreed otherwise. The arbitration clause will typically follow the assigned claims. However, it is disputed whether the employer may assign defect claims to a third party. The contractor may raise the same defences against the third party as it would have against the initial employer, including limitations of liability.
It is important to note that the assignment of future claims may not be enforceable in the case of the assignor's insolvency or bankruptcy, particularly if the claims have only arisen and not matured after the assignor has lost the capacity to dispose of their claims under applicable insolvency and bankruptcy laws.
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Assignment of future claims
In Switzerland, rights are generally assignable under the law, but certain rights may be non-assignable due to statutory restrictions or the nature of the underlying legal relationship. In the context of supply contracts, specific rights and claims can be assigned to a third party without the consent of the other party. This means that a debtor need not be notified of the assignment for it to be valid. However, if the debtor is unaware of the assignment, they can still fulfil their obligations by interacting directly with the assignor.
The assignment of future claims is an important aspect of contract law. It refers to the transfer of rights or interests in future claims from one party (the assignor) to another (the assignee). In Switzerland, the assignment of future claims must be made in writing to be valid. This is a crucial requirement for any enforceable agreement involving the transfer of future claims.
While Swiss law generally permits the assignment of future claims, there are specific scenarios where it may not be enforceable. According to Swiss case law, the assignment of future claims may not be valid in cases of assignor insolvency or bankruptcy. This applies specifically to claims that have arisen after the assignor has lost the capacity to dispose of their claims due to applicable insolvency or bankruptcy laws.
It is worth noting that the assumption of obligations is treated differently from the assignment of claims. While the assignment of future claims does not necessarily require the consent of the contractual party, the assumption of obligations does. This distinction highlights the nuanced approach that Swiss contract law takes when dealing with the transfer of rights and obligations between parties.
In summary, the assignment of future claims under Swiss law offers flexibility and enforceability, allowing parties to transfer rights and interests in future claims. However, it is important to be mindful of specific scenarios, such as insolvency or bankruptcy, where the enforceability of such assignments may be impacted.
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Frequently asked questions
Yes, in general, contractual rights can be assigned to a third party under Swiss law. However, there are some exceptions, such as in cases of insolvency or bankruptcy, and the consent of the counterparty is required for the assignment or assumption of an obligation.
To conclude a contract under Swiss law, three conditions must be met: all parties must be capable of acting, all parties must have the intention of entering into a binding contract (offer and acceptance), and the parties' declarations of intent must coincide.
A declaration of intent can be express or implied. An implied declaration is derived from the conduct of a party, which may constitute a declaration of intent if there are indications that, in good faith, point towards one.
Swiss contract law is based on the principle of good faith, protecting the parties' reasonable and fair expectations. This principle applies to the interpretation of declarations of intent and the requirement for valid contract formation.
