Do I have to provide for an agreement to be entered into or modified in writing?
In practice, many companies – often by default - provide in their contracts that the conclusion and subsequent amendment (including termination) must be in writing – without further specification – even though this is not necessarily required by law. Moreover, they are frequently unaware of the requirements of the written form and its practical implications (e.g., the need to quickly obtain an original, handwritten signature from a person abroad). Finally, failure to respect the written form (e.g., unqualified electronic signature) when entering into, amending or terminating a contract can have serious consequences. Indeed, in certain cases, if the form foreseen in the contract is not respected, the sanction is the nullity of the act in question.
The right thing to do: find out what the legal requirements are, then determine the form best suited to your needs!
- Check what the law provides for regarding the contract in question. Depending on the type of contract the parties wish to enter into (e.g., employment agreement, loan agreement, services agreement, license agreement, distribution agreement, etc.) and/or its provisions, it is essential to ensure that the law does not foresee any specific form. For example, in the case of employment agreements, certain derogations from the articles of the Swiss Code of Obligations ("CO") require compliance with the written form (e.g., modification of termination periods in accordance with art. 335c para. 2 CO). If the law does not provide any specific requirements, then the form of the contract is free.
- Choosing the right form for your needs. If the form of the contract is free, it is essential to adopt the form best suited to the company's needs (e.g., a company with an extensive digitisation system, or one that keeps all documents in paper format) and to the situation in question (e.g., signing employment contracts, accepting general terms and conditions, or signing a contract with a supplier for very large amounts). When the parties agree on a special form for a contract, they are deemed to have agreed to be bound only once this form has been completed. As far as amendments to the contract are concerned, it depends in particular on the wording of the contract. It should also be noted that a specific delivery method may also be specified (e.g., A+ mail, registered mail, e-mail, fax, DHL, etc.). The most important thing, however, is to choose clear wording that leaves no room for interpretation, and to be fully aware of the requirements of the chosen form.
- The written form, a few reminders: when the parties mention the written form, without more precise indication, the legal provisions relating to this form are applicable. Thus, the contract must be signed by all persons to whom it imposes obligations. The signature may be handwritten or electronic. In the latter case, the requirements of the Federal Law on Certification Services in the Field of Signatures and Other Applications of Digital Certificates (SR 943.03) apply. In Switzerland, only four qualified electronic signature providers are recognised. These are Swisscom (Schweiz) AG, QuoVadis Trustlink Schweiz AG, SwissSign AG and the Federal Office of Information Technology and Telecommunication. This means that an electronic signature from another provider, such as DocuSign or Adobe, does not meet the requirements of written form pursuant to Swiss law. In addition, the signed document must normally be sent to the other party in its original form. It should be noted that the Swiss Federal High Court has not yet ruled on the question of whether sending copies of signed original documents by fax or e-mail fulfils the requirements of written form within the meaning of art. 14 para. 2bis CO.
- Other possible forms: it is entirely possible to provide for one or more forms that are perfectly suited to the company's needs and the way in which it stores its documents. For example, the contract may expressly state that: (i) a document may be signed using the electronic signature used within the company, even if the latter is not recognised within the meaning of art. 14 para. 2bis CO, (ii) sending a scanned copy of a hand-signed or electronically signed document by e-mail (even with a signature that does not meet the criteria of art. 14 para. 2bis CO) is valid, (iii) a scanned signature is sufficient and/or (iv) sending an electronically signed and then printed document by post is valid.
Recommendations
When you wish to modify a contract (e.g. termination, amendment of general terms and conditions, etc.) or when your business partner notifies you of a contractamendment/termination, it is important:
- To carefully analyse the requirements set out in the contract and any amendments thereof;
- If you are the author of the amendment/termination, to respect the form mentioned in the contract. If this is not possible, it is necessary to analyse the consequences of non-compliance of such form;
- To check that the planned delivery method (e.g., e-mail, registered mail, fax, etc.) complies with the content of the contract;
- If your co-contractor has not respected the required form, and you do not agree with the amendment/termination, to determine the legal consequences and act accordingly (e.g., sending a letter stating that the contract is null and void for lack of a valid form).
When drafting or negotiating a contract, we recommend:
Analysing whether the law to which the contract is subject provides for a specific form (e.g., authentic, written, qualified written form, etc.) for the contract in question or certain provisions thereof;
- Clearly defining the form that suits you and include it in the contract;
- During negotiations, if your co-contractor does not accept the form you want, analysing the precise implications of the proposed version.
How can we help
- When negotiating a contract, we work with you to ensure that you fully understand the consequences of the chosen form, and if necessary, we help you to negotiate an amendment of the contract.
- When drawing up a contract, we work with you to analyse your needs and determine the most appropriate form, considering legal requirements. We will suggest a wording to be included in the contract.
- When a problem arises in connection with the form of a contract (e.g. disputing a termination because the form mentioned in the contract has not been respected), we help you to (i) analyse the contract, (ii) check whether the way you have proceeded is correct, (iii) determine the risks and consequences, particularly monetary, and (iv) find a solution (e.g. by negotiating with your co-contractor or advising you on what steps to take to rectify the problem).
