In the course of their daily work, both individuals and legal entities often enter into various preliminary contracts and agreements. Such agreements may concern the purchase of real estate, goods, commercial transactions, and other matters. It is possible to include an enforceable clause in every contract that is agreed upon.
What is an enforceable clause in a contract or agreement
The enforcement clause is a provision found in the law on obligation relations and can be included in a contract. This clause allows the party who has a monetary or non-monetary claim to collect it in the event of a breach of the contract or pre-contract. Having an enforceable clause is essential as it helps avoid lengthy and expensive court proceedings, and enforcement can begin immediately. Moreover, to ensure security, a third party such as a manager or spouse, can be included in the contract to fulfill the claim.
Where the enforceable clause can be applied
The enforcement clause can be applied at
- Preliminary agreement
- Lease Agreement
- Purchase and sale agreement
- Loan Agreement
- Business cooperation agreement
- Agreement for payment of debt, etc
What can be done with an enforcement clause
- With the enforcement clause, the parties can determine what and to which actions it will apply
- Collection of funds from the debtor
- Collection of penalties
- Collection of contractual penalty
- Vacating real estate
- Transfer of possession, etc
It is crucial to draft the enforceable clause correctly to prevent the possibility of it becoming unenforceable. For instance, it should clearly state that the execution will take place on all domestic and foreign exchange accounts within the country and abroad. If not stated, it can only be executed according to what is mentioned in the clause.
The contract containing an enforceable clause must be concluded in writing and a confirmation of the private document must be made by a notary office. If the form is not observed in its entirety, the enforceable clause has no force as an enforceable document and it cannot be applied. So if you only foresee the enforceable clause in a contract or agreement, and at the same time there is no formalization based on such a contract, it cannot be enforced.
What it must contain
An enforceable clause to be effective and enforceable must contain several key elements
- Contracting parties
- The obligations of the contracting parties
- Deadline for fulfillment and method
- Type of claim (monetary or non-monetary)