Contract Law

Freedom of Contract and Its Limits

Swiss contract law rests on freedom of contract: the parties themselves decide whether, with whom and on what terms they conclude a contract. A contract comes into existence as soon as they have expressed matching intentions on the essential points (Art. 1 Swiss Code of Obligations) — expressly or tacitly. The law sets limits where one party is typically weaker, or where the content conflicts with mandatory law, public policy or morality (Art. 19 et seq.).

This gives rise to a common misconception: not everything written in a contract is actually valid. Conversely, much applies that is not written in it — default statutory rules fill every gap the parties have left open. Knowing which gaps the law closes, and how, lets you decide deliberately where your own provision is needed.

Form and Evidence

Contracts are in principle valid without any particular form (Art. 11 Swiss Code of Obligations). For certain transactions the law nonetheless requires a form: writing for the assignment of a claim or a post-contractual non-competition clause, public notarisation for property purchases and for marital and inheritance contracts. As our firm also provides notarial services, we accompany you from drafting to notarisation from a single source — avoiding the break between draft and execution.

Terms and Conditions and Templates

General terms and conditions are pre-formulated contractual terms that one party presents to the other. For them to become part of the contract, there must be a reference before conclusion and a reasonable opportunity to take note. Surprising clauses fall away under the rule on unusual clauses; towards consumers, Art. 8 of the Unfair Competition Act additionally prohibits a significant imbalance to the other side's detriment. For recurring transactions we build templates with completion notes, so nobody has to improvise in day-to-day business.

When the Contract Is Not Performed

If performance fails, is late or is defective, the rules on non-performance apply (Art. 97 et seq. Swiss Code of Obligations): damages, default interest, withdrawal or substitute performance. Which route is right depends on the type of contract and on the deadlines set — default in particular has to be established properly. We assess the prospects of litigation, conduct settlement talks and represent you before the courts in St. Gallen, Appenzell Ausserrhoden and Zurich.

Contract Law in Eastern Switzerland

We advise companies and private clients at our offices in Wil SG, Teufen AR and Zurich and at our correspondence office in Gossau SG — from a single sales contract to the full set of agreements for a business succession.