We help business people maintain good relationships and break toxic ties. We help companies navigate the delicate issues of the business environment. A contract is useful for as long as it clearly expresses the parties’ understanding. It becomes truly important, however, when their interests no longer coincide.
We draft and review complex contracts. We translate the parties’ intentions into legal mechanisms. Our experience as litigators shapes the way we approach contracts and relationships between shareholders. When drafting or analysing an agreement, we ask not only what the parties intended to establish, but also what will happen if one of them fails to perform its obligations, if differing interpretations arise or if the legal relationship must be brought to an end.
A contract must work both when the relationship between the parties is good and when conflict arises.
Contractual disputes. We represent clients in disputes concerning the interpretation, performance, termination and effects of contracts. Among other matters, we handle disputes concerning:
– non-performance or improper performance of contractual obligations
– interpretation of contractual terms
– rescission or termination of contracts
– payment of the price and recovery of receivables
– penalties, interest and other consequences of non-performance
– contractual liability and recovery of losses
– validity and effectiveness of contractual terms
– contractual guarantees
– termination of commercial relationships
– disputes arising from complex commercial contracts.
In a contractual dispute, the wording of the contract is the starting point, but not always the final point. We analyse how the relationship between the parties actually developed, the correspondence, performance documents, the parties’ conduct and the context in which the obligations were undertaken.
Interpretation of contracts. Many disputes arise not because the parties failed to enter into a contract, but because each party attributes a different meaning to it. An apparently minor wording choice may determine whether an obligation exists, the scope of a guarantee, when a payment falls due or whether a party has the right to terminate the contractual relationship. Contract interpretation must therefore take account of the contractual framework as a whole and of the actual relationship between the parties. In litigation, we analyse the wording and structure of the contract, the parties’ subsequent conduct, the documents exchanged between them and the economic purpose of the transaction. We translate the parties’ intentions into legal mechanisms. When a dispute arises, we determine whether those intentions were expressed with sufficient clarity and what legal consequences follow from the agreement.
Non-performance of contracts. In business, failure to perform a contract may have consequences extending beyond the relationship between the two parties. A delayed delivery, failure to pay an amount due, refusal to provide a service or breach of an exclusivity or confidentiality obligation may affect successive commercial relationships, investments and a company’s ongoing operations. We analyse the nature of the obligation, the reason for non-performance, notices given, any explanations offered and the loss caused. We then determine the strategy: performance of the obligation, termination of the contractual relationship, recovery of sums due, damages, or a combination of these remedies, depending on the client’s actual interests. The objective is not always to preserve the contract. Sometimes, the best solution is a controlled exit from a contractual relationship that no longer works.
Termination of contracts. Entering into a contract is usually easier than bringing it to an end. When the relationship between the parties deteriorates, the legal basis for termination, the applicable procedure, the notices required and the financial consequences must be analysed carefully. An improperly prepared termination may itself generate litigation or turn the party seeking protection into the party accused of breach of contract. We assist clients in preparing the termination of contractual relationships and represent them where the lawfulness or effects of that termination are challenged. We help business people break toxic ties, but such a separation must be structured legally with the same care with which the original relationship was created — and sometimes with even greater care.
Shareholder agreements. Relationships between shareholders work well for as long as their interests remain compatible. When differences of vision arise, or conflicts develop over management of the company, distribution of profits, financing, sale of shareholdings or control of the company, the absence of clear rules may quickly turn disagreement into litigation. We draft and analyse shareholder agreements and other agreements between shareholders, seeking to establish clear mechanisms for the exercise of rights and the management of conflict situations. We have experience with corporate arrangements concerning:
– management and control of the company
– decision-making
– majorities required for particular transactions
– financing of the company
– distribution of profits
– transfer of shareholdings
– entry and exit of shareholders
– non-compete and confidentiality obligations
– deadlock situations
– dispute resolution mechanisms.
A good shareholder agreement does not assume that the parties will always agree. It begins with the question of what happens when they no longer do.
Shareholder disputes. Conflicts between shareholders can sometimes be more difficult than disputes between independent companies. The legal dispute is compounded by the existence of shared economic interests, a management structure and, often, a history of cooperation. We handle disputes concerning the exercise of corporate rights, management of the company, resolutions of corporate bodies, access to information, transfer of shareholdings and other contentious relationships between shareholders. We analyse the conflict not only from the perspective of the immediate legal claim, but also in light of the economic outcome sought. The client may wish to continue the business on different terms, take control, exit the company, realise the value of its shareholding or bring to an end conduct considered harmful. The legal strategy must be built around that objective.
Corporate deadlock. A disagreement between shareholders may prevent decisions essential to the operation of the company from being taken. When decision-making mechanisms cease to function, the legal problem must be addressed promptly. We analyse the company’s constitutional documents, shareholder agreements, ownership structure and governance mechanisms in order to identify the appropriate legal solution. At the drafting stage, we seek to anticipate such situations. At the litigation stage, we pursue the solution that best protects the client’s rights and economic interests.
Exit from the company. Not every business association should be maintained at any cost. Where the relationship between shareholders becomes incompatible with continued cooperation, the legal mechanism by which the separation can be achieved must be identified. Such a situation often involves issues concerning valuation of shareholdings, their transfer, obligations between the parties, access to information, use of assets and continuation of the company’s business. We assist clients in negotiating and, where necessary, litigating these matters. As far as possible, legal separation should result in an effective separation of economic interests.
Contracts built for difficult situations. We design contractual relationships in concise terms and advise the parties on the applicable default rules of law. Complicated legal language is not, in itself, a form of protection. A contract must be precise enough to avoid ambiguity and clear enough for the parties to know what they are required to do. We seek to draft legal mechanisms that work in practice and answer simple questions:
– What must each party do?
– By when?
– Under what conditions?
– What happens if it does not?
– How can the relationship be brought to an end?
– Who bears the consequences?
The clearer the answers are when the contract is concluded, the less room there may be for future litigation.
Contract negotiation. Legal negotiation is not merely about drafting terms that favour the client. An agreement that transfers all risk to the other party may become impossible to negotiate or difficult to perform. We identify the client’s essential interests, the risks it can accept and the situations for which protective mechanisms must be provided. Litigation experience is important at this stage. We know which clauses frequently generate disputes, which formulations create uncertainty and which documents will matter if the contractual relationship subsequently comes before a court.
Evidence in contractual and shareholder disputes. In a commercial dispute, the contract is rarely the only evidence. Negotiations, schedules, orders, invoices, minutes, reports, notices, messages and correspondence between the parties may demonstrate how the obligations were understood and performed. In shareholder disputes, minutes of meetings, resolutions of corporate bodies, financial statements, correspondence between shareholders and documents concerning the management of the company may become decisive. We therefore analyse from the outset what must be proved and what documents exist to support each assertion. A contractual right is stronger when it can be properly proved.
Negotiation vs litigation. Not every contractual dispute needs to be resolved by a court judgment. Sometimes, a well-prepared negotiation can achieve the desired result more quickly. Negotiation is more effective, however, when each party understands what will happen if it fails. Our litigation experience enables us to assess the client’s legal position, litigation risks and realistic alternatives. We negotiate when negotiation serves the client’s interests. We litigate when litigation is necessary.
Dispute prevention. For us, drafting and reviewing contracts is also a means of preventing disputes. We do not seek to anticipate every possible event, but rather those situations capable of putting the client’s legal and economic interests at risk. We clarify obligations, the consequences of non-performance, termination mechanisms and the procedures by which potential disagreements should be managed. In this respect, our experience as litigators helps us draft contracts from the perspective of the questions that arise when things stop working. A good contract is not one that merely appears complete on the day it is signed. It is one that also provides answers on the day conflict arises.
Business relationships. The Romanian business environment has many energetic people and needs more honest people. Contract law cannot replace trust between business partners. It can, however, define obligations, allocate risks and establish consequences when trust is no longer sufficient. We help business people build functional legal relationships, defend them when they are breached and bring them to an end when continuation is no longer possible.
We translate the parties’ intentions into legal mechanisms. And when those mechanisms no longer work, we defend the rights arising from them.
Av. dr. Andrei Săvescu
Av. Alina Matei
Av. Răzvan Crăciunaș