During the negotiations of a contract, the parties are generally concerned with ensuring that their relationship is governed exclusively by the contract. It is, thus, common to exclude statutory provisions, especially those on potential unilateral withdrawal from the contract. Even so, if the contract does not provide specifically for the possibility of termination, then excluding statutory terminations options can, under certain circumstances, be invalid. We recommend that care be taken when a statutory provision is merely excluded, especially in light of the Supreme Court case law.

In its decision No. 32 Odo 1043/2004, the Supreme Court held that an arrangement which excludes the option of unilateral withdrawal from a contract is a breach of good practice (boni mores), and thus, void. The Supreme Court came to this conclusion when Act No. 513/1991 Coll., the Commercial Code, and Act No. 40/1964 Coll., Civil Code, still applied, and it supported its findings on the invalidity of arrangements excluding unilateral withdrawal with the explanation that a party cannot be required to remain in a contractual relationship which another party has clearly violated without the option of protection from such breaches through contractual withdrawal.

Although the above decision was made under the law in effect until 31 January, 2013, we believe that it holds true under Act No. 89/2012 Coll., the Civil Code, as amended (the “Civil Code”). Under Art. 588 of the Civil Code, an act is absolutely invalid if it clearly contravenes good practice. Thus, even under this system, an arrangement excluding the option of unilateral withdrawal from a contract would most likely be found void. Although the exclusion of Civil Code provisions will be more common than was the case for the previous law, we would suggest that based on the Supreme Court decision above, a contract should always set out the substantive conditions of the contractual relationship and provide for the option of its termination.

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