Czech Republic: Standard Terms and Conditions under the New Civil Code

Definition of standard terms and conditions

The Civil Code uses the term standard terms and conditions, but does not define it. In general, the term can be defined as a sum of contractual provisions formulated in advance, and applicable to various types of contracts drawn up by one contracting party. Their purpose is to simplify and rationalise the contracting process.

When do the standard terms and conditions become a part of the contract?

Standard terms and conditions do not bind the parties automatically; certain conditions must be met first. From a formal point of view, part of the content of a contract may be determined by reference to standard terms and conditions, when the terms and conditions are attached to the offer by the offeror, or when the parties are aware of them (eg, from their previous dealings). The mere reference to the standard terms and conditions elaborated, by professional or interest organisations (eg, FIDIC, UNIDROIT), is sufficient only when the contract is concluded between entrepreneurs.

It is crucial that the other contractual party (at least implicitly) accepts the terms and conditions. Therefore, the terms and conditions attached to an invoice or handed over to the other contractual party without such acceptance, would not be considered as having been validly negotiated. It is therefore highly recommended to attach the standard terms and conditions directly to the contract, since it makes the situation much easier when talking about the burden of proof in a potential legal dispute.

Discrepancy between standard terms and conditions of the parties

If in an offer and the acceptance thereof, the parties refer to standard terms and conditions which are contradictory, the contract is still concluded. Its contents are limited, however, to the extent to which the standard terms and conditions are not contradictory and the rest will be ruled by the statutory provisions. The use of this “knock-out rule” cannot be avoided by a special clause in the standard terms and conditions, but any of the parties can without undue delay after exchanging expressions of will declare that it considers the contract as not having been concluded. Under the old Civil Code, acceptance of an offer with attaching standard terms and conditions to the acceptance statement was not considered acceptance of the offer, but as a new offer (including attached standard terms and conditions). Thus, if the other party accepted this new offer (eg, by delivering the goods), its standard terms and conditions were not relevant at all, since these were part of the first offer that was not accepted.

Unilateral amendment of the terms and conditions

Another novelty brought by the Civil Code allows the parties to stipulate that a party may amend the standard terms and conditions to an appropriate extent provided that the parties are entitled to refuse the amendments and terminate the contract. The Civil Code expressly foresees the possibility to unilaterally amend the standard terms and conditions for contracts which are being concluded with a number of persons and a long-term recurrent performance of the same kind (eg, contracts with telecommunications operators). In our opinion, however, the above-mentioned statutory regulation can also be applied analogously to other types of contracts.

Reasonable expectation of the parties

The new Civil Code stipulates that a provision in the standard terms and conditions which the other party could not have reasonably expected is ineffective, unless expressly accepted by the party; any stipulation to the contrary is disregarded. Mere signature on the document containing the standard terms and conditions is not sufficient. It is recommended that all such “surprising” provisions are properly highlighted in the standard terms and conditions or in the contract itself. The law further provides a guideline as to whether or not such a provision is of such a nature, namely, it will be assessed not only with regard to its content (eg, a contractual penalty “hidden” in the standard terms and conditions, references to statutory provisions without any explanations), but also with regard to the form in which it is expressed (eg, tiny letters, difficult to read). This provision applies to consumers and entrepreneurs alike. Moreover, in relation to consumers and “weaker parties” in the contractual relationship, it is also necessary to consider provisions governing consumer protection and contracts of adhesion.

It is crucial that the other contractual party accepts the terms and conditions. Therefore, the terms and conditions attached to an invoice or handed over to the other contractual party without being accepted, would not be considered as having been validly negotiated.

authors: Otakar Fiala, Monika Voldánová