A commercial contract can look perfectly straightforward on the day both parties are eager to do business together.
Problems usually arise later.
Goods are delivered late. Services do not meet expectations. An invoice remains unpaid. Costs increase. A project that was supposed to take three months reaches month six. One party wants to exit the contract, while the other insists it has no right to do so.
That is when wording that seemed unimportant at signing suddenly becomes critical.
The Civil Code of the Republic of Moldova is built on the principle of freedom of contract: within the limits of the law, parties are free to decide whether to enter into a contract and to determine its terms. Once concluded, however, the contract becomes binding on them.
That is the basic idea behind any pre-signing review: do not read the contract only for the scenario in which everything goes well. Read it for the day when something does not go according to plan.
1. Is it sufficiently clear what each party must do?
The first clause to review is also the most obvious one: the subject matter of the contract.
In practice, however, this is where many agreements rely on wording that leaves too much room for interpretation.
“The service provider will provide consulting services.”
“The supplier will deliver products in accordance with orders.”
“The contractor will perform the works according to the customer’s needs.”
All of these formulations may be workable in a particular context. But if this is almost everything the agreement says about the actual performance, the first dispute immediately raises a basic question: what exactly was supposed to be delivered?
The Civil Code links the conclusion of a contract to agreement on its essential terms and structures the law of obligations around the proper performance of the agreed obligation.
The difference between a precisely defined obligation and a vague one can become decisive.
If a company commissions the development of an IT system, there is a material difference between promising delivery of a platform that satisfies the functions set out in a technical specification and merely promising a certain number of development hours.
If marketing services are being purchased, the contract should make clear whether the service provider is only required to perform specified activities or is also assuming responsibility for a particular result.
If equipment is being supplied, the agreement should make it possible to identify the product, quantity, technical specifications and, where relevant, the accompanying documentation or certificates.
Before signing, it is therefore worth checking whether the commercial promises made during negotiations have actually found their way into the contract.
The sales presentation, offer, email describing promised functionality and discussions held during meetings should not remain in a parallel reality from the document that is ultimately signed.
If an element is important enough that the company would not enter into the deal without it, it is usually important enough to be clearly reflected in the contract.
2. How much are we paying, for what, and when?
“The price is MDL 100,000” may look sufficiently clear.
Sometimes it is.
Sometimes it is only the beginning of the questions.
Does the amount include VAT? Is delivery included? Are third-party costs reimbursed separately? Is payment made in advance or after acceptance? Is billing monthly? What document triggers the payment obligation? Can an invoice be disputed and, if so, within what period? What happens to the undisputed portion?
The Civil Code contains rules on the performance of monetary obligations and payment deadlines, including special rules for relationships in which the creditor of a monetary obligation is acting in a professional capacity.
But a well-drafted commercial agreement should not force the parties to fall back on supplementary statutory rules merely to determine when an invoice was due.
The contract should allow someone in the finance department who did not participate in the negotiation to understand, without difficulty, when an invoice may be issued, when it becomes due, the currency of payment, which supporting documents are required and what happens if payment is late.
Another important point is the price-adjustment mechanism.
In a contract performed over three years, a clause stating that “prices may be revised if economic conditions change” raises more questions than it answers.
Who decides on the adjustment? By reference to which index? At what intervals? Is there a cap? Is the other party’s consent required?
The more objective the mechanism is when the contract is signed, the less room there is for disagreement later.
3. Who decides whether performance was properly completed?
This is one of those clauses that looks secondary until the invoice has to be issued.
A supplier says: “We delivered.”
The customer says: “We did not accept it.”
The contract says only: “Payment is due after the services are provided.”
A dispute may begin there even though a few additional sentences could have prevented it.
Before signing, the parties should determine what delivery, receipt and acceptance actually mean.
For goods, who checks quantity and quality, and within what deadline?
For software, what are the acceptance criteria?
For works, who signs the acceptance certificate and what happens if defects are identified?
For recurring services, is a monthly acceptance certificate required, or are the services deemed accepted unless the customer raises objections within a specified period?
The Civil Code gives the creditor a number of remedies when an obligation is not properly performed, including, where the statutory conditions are met, performance, suspension of its own performance, reduction of the corresponding obligation, termination and damages.
A contract can prevent many disputes by regulating the stage that comes first: how do we determine whether there has in fact been non-performance?
For complex projects in particular, a well-drafted acceptance procedure may be worth more than several pages of general liability provisions.
4. Is the contractual penalty real protection, or just a percentage in the contract?
Many commercial agreements almost automatically contain wording such as:
“For each day of delay, a penalty of 0.1% shall be payable.”
The percentage alone tells us very little.
A percentage of what? The entire contract price, or only the unperformed obligation? For how many days? Is there a cap? Does the penalty apply to late payment, late delivery, or both? Can damages exceeding the penalty also be claimed?
For monetary obligations, contractual penalties should be considered together with the rules on default interest.
A liability clause therefore needs to be read as a whole, not just by looking at the percentage.
Sometimes a company negotiates a high penalty aggressively but accepts, in the same contract, a limitation of liability that substantially reduces its practical value.
In other cases, the contract provides for a penalty but does not clearly state whether it is the sole financial remedy or whether additional loss may also be recovered.
The right question is therefore not only “what is the penalty?”, but:
what can we actually recover if the other party fails to perform?
5. The liability cap may matter more than the contract price
Limitation-of-liability provisions are often buried near the end of the agreement, in a section that commercial teams read quickly.
Yet they can radically alter the allocation of risk.
Suppose a supplier is paid EUR 20,000 to implement a critical system, while the agreement states that the supplier’s total liability, regardless of the loss caused, cannot exceed the amount paid during the previous three months.
That single sentence may be economically more important than many of the obligations set out in the first ten pages.
The Civil Code gives parties significant freedom to allocate contractual risks, but that freedom is not unlimited. For example, Article 905 provides that a clause excluding or limiting liability in advance for damage caused by intentional non-performance or gross negligence is absolutely null and void.
From a commercial perspective, the pre-signing review should therefore consider which categories of loss are recoverable, whether there is an overall liability cap, which obligations are carved out from that cap and whether the limitation operates symmetrically for both parties.
A liability cap may be entirely justified.
The problem arises when the company discovers it only after the loss has already occurred.
6. “Justification due to an impediment”: why the terminology matters
Commercial contracts still frequently use the expression “force majeure.”
It is a familiar expression and parties may use it contractually if they define its content and effects clearly. But when discussing the general regime of non-performance under the current Civil Code of the Republic of Moldova, the relevant statutory concept is different:
“Justification due to an impediment.”
This is not merely a change in vocabulary.
Article 903 of the Civil Code provides that non-performance of an obligation may be justified if it results from an impediment within the meaning of Article 904, while Article 904 itself is titled “Justification due to an impediment.”
Under Article 904, non-performance is justified if it is caused by an impediment beyond the debtor’s control and the debtor could not reasonably have been expected to avoid or overcome the impediment or its consequences. For a contractual obligation, the excuse does not apply if the debtor could reasonably have taken the impediment into account when the contract was concluded.
That is the important distinction when drafting a contract.
It is not enough for a party to identify a serious event and label it “force majeure.”
The specific relationship between the event and the obligation that was not performed must be analysed.
Was the event outside the debtor’s control?
Could it reasonably have been anticipated when the contract was signed?
Could its consequences have been avoided or overcome?
Did it actually prevent performance of the relevant obligation?
These questions matter more than the label attached to the event.
For example, a war, embargo, major infrastructure disruption or government measure may, depending on the circumstances, amount to a qualifying impediment. But the mere existence of such an event does not automatically justify every failure to perform under every contract. The company must be able to demonstrate the impact on the particular obligation and that the conditions of Article 904 are satisfied.
An impediment does not always have the same legal effect
The Civil Code also draws an important distinction between temporary and permanent impediments.
If the impediment is temporary, the justification applies for as long as the impediment exists. If, however, the delay acquires the characteristics of fundamental non-performance, the creditor may exercise the remedies available for such non-performance.
If the impediment is permanent, the obligation is extinguished, and the Code also regulates the consequences for the counter-obligation and restitution of performances already made.
A contractual clause stating simply that “in the event of force majeure, the parties are exempt from liability” may therefore be too simplistic for the problem it is trying to solve.
The agreement should determine what actually happens:
Is performance suspended?
For how long?
Which obligations are affected?
What happens to payments that were already due?
When may the other party terminate the agreement?
What happens if the impediment lasts one month, six months, or becomes permanent?
Notice is not optional
There is another point that standard “force majeure” clauses sometimes treat too casually.
Article 904(5) requires the debtor to ensure that the creditor receives, within a reasonable period, notice of the impediment and its effect on the debtor’s ability to perform. If the notice does not reach the creditor, the creditor may claim damages for the loss caused by the failure to notify.
So even the existence of a qualifying impediment does not mean that the affected party can remain passive.
From a drafting perspective, it is worth specifying:
- how quickly notice must be given;
- to whom it must be sent;
- what information it must contain;
- whether supporting documents are required;
- how the other party must be kept informed as the situation develops;
- when the end of the impediment must be notified.
These details may matter just as much as the definition of the event itself.
“Non-performance is justified” does not mean the other party has no remedies
This is probably one of the most important reasons why the correct statutory terminology matters.
In commercial language, “force majeure” is sometimes treated as though it wipes out all contractual consequences.
The Civil Code is more nuanced.
Under Article 901(2), where the debtor proves that non-performance is justified, the creditor retains certain remedies under the conditions laid down by law. What the creditor generally cannot demand in that situation is specific performance and damages for the justified non-performance.
That is why wording such as “the affected party is released from all obligations and liability in the event of force majeure” requires careful scrutiny.
Excusing non-performance and determining the future of the contract are related, but they are not the same question.
7. An impediment should not be confused with a contract that has simply become more expensive
Another distinction is essential.
Suppose the raw material has not disappeared from the market and the supplier can still deliver, but its price has tripled.
Performance remains possible.
It has simply become much more expensive.
That situation should not automatically be treated as a qualifying impediment.
The Civil Code deals separately, in Article 1083, with an exceptional change of circumstances. The starting rule is that the obligation must still be performed even if performance has become more onerous because the cost of performance has increased or the value of the counter-performance has decreased.
Only where the change is so significant that maintaining the obligation would become manifestly unfair, and the additional statutory requirements are met, does the mechanism under Article 1083 potentially come into play.
Those requirements include that the change occurred after the obligation was assumed, could not reasonably have been taken into account at that time, the debtor did not assume the risk of the change, and the debtor attempted in good faith to negotiate an adjustment of the performances. Where the statutory requirements are met, the court may order an adjustment of the parties’ performances or termination of the contract.
The practical distinction can be summarised simply:
the impediment under Article 904 concerns justification of non-performance; the exceptional change of circumstances under Article 1083 concerns a situation in which performance remains possible but has become exceptionally onerous.
The two mechanisms have different conditions and different legal effects.
That is why a commercial agreement should avoid using “force majeure” as an umbrella term for every negative event: war, inflation, cost increases, labour shortages, currency fluctuations, supply-chain disruption or a fall in demand.
Not all such events have the same legal consequences.
Some may constitute a qualifying impediment.
Others may raise the issue of an exceptional change of circumstances.
And some may simply remain part of the commercial risk assumed by one party when it agreed to a fixed price.
The key is therefore not only to use the correct terminology, but to allocate contractually who bears each category of risk.
8. How do you exit the contract?
Many negotiations focus on entering into the commercial relationship.
Much less attention is paid to leaving it.
Is the contract for one year or for an indefinite term?
Does it renew automatically?
How far in advance must a notice of non-renewal be given?
Can either party terminate without cause?
Which breaches give rise to a termination right?
Is there a cure period?
What happens to orders that have already been accepted?
What happens to advance payments?
The Civil Code gives creditors several remedies in the event of non-performance and regulates termination for non-performance.
But the contract can organise the relationship much more clearly.
For example, a two-day delay in submitting a report should not necessarily have the same consequence as losing a licence without which the entire contract can no longer be performed.
The document should therefore distinguish between breaches that can be cured and those that justify prompt termination.
Termination without fault is equally important.
In long-term agreements, the company should know whether it can exit the relationship for purely commercial reasons. The Civil Code itself recognises that parties may contractually reserve a right of termination for non-performance, for other grounds or without cause.
Negotiating a termination clause is not pessimistic.
It is simply planning for the possibility that the commercial relationship may no longer make sense.
9. Notices: a small clause with major consequences
“Any notice shall be sent by registered mail to the party’s registered office.”
The wording looks harmless until someone sends a notice of termination by email.
The Civil Code contains general rules on notices, but if the parties establish a special contractual procedure, it should also be a procedure the organisation can realistically follow.
The contract may specify accepted email addresses, the persons or departments to whom notices must be sent, the situations in which hard-copy delivery is also required and the moment at which a notice is deemed received.
It looks like an administrative detail.
But if a cure period, invocation of an impediment, exercise of an option or termination of the contract depends on the notice, the detail quickly becomes a legal issue.
10. Confidentiality should answer the question: “what are we protecting?”
Confidentiality clauses are also often treated as boilerplate:
“The parties shall keep confidential all information received.”
But this immediately raises questions.
Is all information confidential?
Including information that is public?
Including information already known to the other party?
Can it be shared with auditors, the bank, legal counsel or another company in the same group?
How long does the obligation survive termination?
What happens to documents and copies?
The Civil Code protects confidentiality even at the negotiation stage where information is provided on a confidential basis.
In the final contract, however, the parties can build a much more precise regime.
And where the relationship involves personal data, trade secrets, source code, technical formulas or other categories of information governed by special rules, a general confidentiality clause may not be enough. The specific applicable legislation must also be reviewed.
11. Where do negotiations end and the dispute begin?
The final pages of a contract often contain a clause no one hopes to use:
“Disputes shall be resolved by the competent courts.”
or
“Any dispute shall be resolved by arbitration.”
Once a conflict arises, that sentence may become one of the most important provisions in the entire agreement.
Litigation, arbitration and mediation are not equivalent mechanisms. They differ in cost, confidentiality, procedural flexibility, routes of challenge and the way the outcome can be enforced.
The dispute-resolution clause should therefore be adapted to the transaction.
For a straightforward domestic agreement, court proceedings may be the natural choice.
For a high-value international relationship, there may be a strong case for arbitration.
Where the parties wish to preserve an ongoing commercial relationship, a management escalation step or the possibility of mediation before formal proceedings may be useful.
International contracts also raise another question: which law governs the contract?
The governing law and the court or arbitral tribunal with jurisdiction to decide the dispute are separate questions and should be addressed separately.
First, check who is actually signing
There is one review that should take place before all of the clauses above.
The contract may be excellently drafted, but it still needs to be signed by someone who has authority to bind the company.
If it is signed by the company’s director or administrator, that person’s capacity should be verified and, for transactions that require it, any necessary corporate approvals should also be checked. If another person signs, their authority must be verified.
This is particularly important where the transaction is significant in value, involves security or guarantees, disposes of important assets or falls outside the company’s ordinary course of business.
The form of the contract and method of execution should also be reviewed.
In modern business, “signed” no longer necessarily means two paper originals. But the actual method of execution must satisfy the legal and contractual requirements applicable to the transaction.
Do not sign the contract for the ideal scenario
Optimism is normal during negotiations.
The buyer intends to pay. The supplier intends to deliver. The service provider intends to meet the deadline. No one enters into a contract intending to end up in a dispute.
A good contract is not based on the assumption that one party will act in bad faith.
It is based on a simpler reality: problems happen in business.
A delivery may be delayed even though no one wanted it to be. A market may change. A project may require more resources than expected. A major customer may face liquidity problems. An impediment outside a party’s control may arise. Or performance may remain possible while economic conditions change radically.
The purpose of the contract is to turn those situations from a negotiation that starts from zero into a predictable mechanism.
Who has to do what?
By when?
Who confirms that the obligation has been performed?
Who bears the cost if it has not?
What happens if non-performance is justified due to an impediment?
Who bears the risk if performance merely becomes more expensive?
How long can the problem continue?
And how does the relationship end if it can no longer be repaired?
Those are the questions worth asking before signing.
Because by the time a contract is being read truly carefully, the transaction is usually no longer at the stage where everyone agrees.
This material is provided for general informational purposes and reflects the legal framework of the Republic of Moldova. The content and risks of any contract depend on the type of transaction, the status of the parties and any special rules applicable to the relevant sector.