Finnish Contract Law

Instead, it is particularly important that the contract reflects as accurately as possible the actual project and the real legitimate interest of each party. Only in this context is it possible to carry out the desired postponements, for example with regard to liability, termination rights or the like. Only if the clauses (by a judge) can be found to be firmly anchored in the scope and nature of the project can one be reasonably sure that the clause will stand up to judicial scrutiny. Another peculiarity of Finnish contractual practice is the widespread use of standardised contractual clauses. These conditions are usually formulated by stakeholder groups in the industry concerned with the aim of creating a balanced framework that can be applied to most relevant contracts. Perhaps the most important feature of Finnish contract law is that it always places facts above form. A Finnish court will never decide a case solely on the basis that the parties use a particular word or phrase in the contract. In fact, Finnish law is clearly not interested in terms and formulations. Lawyers like to look at the whole contract, what the parties really wanted, but also simply what makes sense. Contracting parties are largely free to agree on the contractual remedies they wish to apply in the event of breach of contract or other disruption of contractual services. Unless they agree on something specific, the usual remedies of Finnish contract law apply. Some important observations on these remedies: Finnish contract law is largely free of mandatory formal requirements.

Contracts can be concluded in any form that appears to suit the parties (and that meets the need of the parties to prove existing agreements). The Finnish legal system is based on freedom of contract and there are very few types of contracts with specific formal requirements. Finnish contract law is heavily based on customary law, but the general rules for contracts are found in Finnish contract law. For construction contracts, these are the terms YSE 1998 used in the vast majority of construction projects. Since Finnish legislation does not contain specific provisions on employment or manufacturing contracts, the 1998 YSE conditions are sometimes perceived as if they were the law itself. In any case, the conditions are a strong expression of the expectations of the Finnish parties when concluding construction contracts. The Finnish legal system is part of the Nordic legal family. Therefore, Scandinavian businessmen will find many things in Finnish contract law.

For everyone else, there are a few key features to keep in mind when concluding contracts in Finland. Termination of the contract is possible in case of material breach, the definition of material breach being somewhat ambiguous, unless appropriate contractual clauses clarify the matter. Therefore, the basic design paradigm in Finland is different from that of many other countries. It is not possible to determine with certainty how far one can go, for example in terms of limiting the rights of the other party, without the contractual clauses being annulled by the courts. Finnish law is based on the tradition of civil law. In Finland, written laws are the highest source of law. However, customary law still exists and has a fairly strong influence in some areas, such as contract law. Finland is a member of the European Union and is bound by its laws, regulations and administrative provisions. In practice, even commercial contracts of significant value are regularly concluded by e-mail, exchanging scans of signed documents. An emerging trend is to do away with physical signatures altogether and use electronic signatures.

Third-party signature service providers are often used for this purpose. The YSE 1998 Terms are not directly applicable unless expressly stated in the Agreement. However, their wide acceptance gives the terms considerable weight in interpreting unclear contractual terms or reducing gaps in the contract, even if they are not referenced. It`s a good idea to take them into account when drafting contracts. A certain service can be performed in court, i.e. the other party can demand the effective performance of the contract and is not limited to the demand for financial compensation. For example, non-compete obligations may be enforced by court order. I care about different types of contracts and in particular legal issues related to ICT, content and communication services, as well as data protection, proper processing of personal data. Finnish judges (under Finnish contract law) have a wide discretion to adjust or annul contract terms if they consider such a clause to be inadequate.

It is a blessing and a curse. This relieves the parties, especially those in a weaker negotiating position, of some of the concerns about the terms of the contract: if it becomes too absurd, you can rely on legal aid. On the other hand, this system makes the outcome of possible disputes much less predictable. In the absence of reasonable limitation clauses, damages for negligent breach of contract generally include full compensation for all damages that can be proven to have been caused by the breach, including consequential damages such as loss of production. The Finnish Arbitration Institute of the Finnish Chamber of Commerce is the largest arbitration institute in Finland and the majority of international arbitrations in Finland are subject to the arbitration rules of the Finnish Chamber of Commerce. With the electronic signature, originals are sometimes exchanged later for documentation purposes, but this is not necessary (and is becoming increasingly rare). Finland has developed legislation on consumer protection and, in addition, certain sectors of activity such as gambling, tobacco, alcohol and pharmaceuticals are subject to restrictions on the sale and marketing of these products. I work mainly with missions related to commercial contracts, construction and real estate. If you have any questions about Finnish law, please do not hesitate to contact us on helsinki@nordialaw.com.

The startup scene is booming in Finland and especially in Helsinki, which has been ranked as one of the most attractive ecosystems for startups. In April 2018, Finland introduced a start-up residence permit for entrepreneurs coming from outside EU countries to also attract foreign talent. In Finland, disputes are mainly settled before independent state courts. There are three state court cases, and all of them hear criminal and civil cases. There are also some special courts, such as the Market Tribunal, which deals with market law, competition law, public procurement and civil intellectual property disputes. The Finnish judicial system is in favour of conciliation. Finland has also ratified the New York Convention without reservations. There are no ownership restrictions, except in the province of Åland, where real estate and land ownership are restricted to residents of Åland. The acquisition and registration of real estate and liens on real estate are regulated by the Real Estate Code.

Real estate purchase contracts have special formal requirements. Limited liability companies are the most common form of company in Finland and the vast majority of companies are incorporated as limited liability companies. The Finnish Limited Liability Companies Act regulates the process of setting up a company and contains basic provisions on corporate governance. Finnish corporate culture values modesty, honesty, equality, punctuality and trust. Business meetings and negotiations usually boil down to a few small discussions and should begin and end with the agreement. The different cultures are highly respected, although Finland is a relatively ethnically homogeneous country. Finland`s supply system spends about €35 billion a year, or about 16% of the country`s GDP. EU public procurement directives have been transposed into national law through legal acts separated by trees.

The Finnish legal system protects intellectual property rights and Finland has also acceded to most international agreements. Intellectual property rights must be registered to be enforced under local laws. Disputes relating to intellectual property rights are referred to the Market Court, which deals with all disagreements relating to copyright and industrial rights. The corporate tax rate is 20% of the company`s taxable income, which is one of the lowest corporate tax rates in the EU. Persons who stay in Finland for more than six months are considered residents of Finland and must pay taxes to Finland on their worldwide income. Key employees of third parties receive tax relief if certain conditions are met. The start-up process is relatively simple and often the most time-consuming part of starting a business is opening a bank account due to strict money laundering laws and practices.