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Contract Law in Cyprus
The main law governing agreements is the Contract Law, or Chapter 149 in the Cypriot Civil Law. The Cypriot Contract Law is a comprehensive legal framework which contains the main regulations and principles to be followed when entering into an agreement. Cyprus is also a signatory member of the European Parliament and of the Council (EC) Regulation No. 593/2008 applicable to contractual obligations, also known as the Rome I Regulation. The EC Regulation No. 593/2008 is important for Cypriot companies frequently signing agreements with counterparts residents of other EU countries.
Types of contracts in Cyprus
The Cypriot Contact Law regulates the following types of contracts:
- contracts for the sale of goods,
- contracts for the carriage of goods, passengers,
- consumer contracts,
- insurance contracts,
- contracts for the provision of services.
The Contract Law also refers to the signing of employment contracts, even if specific details are mainly found in the Cypriot Employment Law.
The main principles when signing a contract in Cyprus
The Cypriot Contract Law relies on three main principles:
In order to enter into a contract, Cypriot companies must first convey their proposal to the other party. The communication may have a positive effect, case in which the other party will accept the proposal, or a negative effect, case in which the other contracting party will revoke the proposal. The Contract Law also establishes that in order for successfully signing a contract with a Cypriot company, the acceptance must be absolute and must be expressed in an usual and rational manner.
Obligations of parties when concluding a contract in Cyprus
The Cypriot Contract Law provisions that parties entering into an agreement have the obligation to perform their duties. In order for the contract to be enforced, the following conditions must be fulfilled:
- the contract must be unconditional,
- the contract must be signed after assessing the parties willingness to enter into the agreement.
The law also establishes that Cypriot companies signing an agreement which they ulterior breach will be subject compensation for loss or damage.
For complete information about the content of the Contract Law, please contact our Cypriot attorneys.