The term ‘B2B contract’ is extremely broad. It basically means business-to-business cooperation, i.e. cooperation between two entrepreneurs (whether a company or a sole trader). In legal terms, a ‘B2B contract’ can cover both a contract of performance (service contract) and a contract of result (e.g. a contract for specific work). Depending on the nature of the obligation, there will be different possibilities for the termination of the contract.
Termination of a B2B contract
If the contract has been concluded for a specific period of time, it will simply expire at the end of that period. Similarly, if the contract concerns a specific task. This would appear, for example, in the case of a contract between a customer and a photographer who is to take some photos of a product. Once the finished photos have been sent to the ordering party and the remuneration has been paid, the contract will usually end because it has been performed.
Termination of a B2B contract
Termination of a contract mainly applies to contracts concluded for indefinite period. There is no obstacle to the possibility of termination also being included in a fixed-term contract (whereas this usually makes sense for longer, at least several months’ cooperation). By its nature, the institution of termination will usually apply to so-called contracts of diligent effort (i.e., for example, a consulting contract).
Termination does not require the consent of the other party – it is sufficient that only one party wishes to terminate the contract and such a possibility is provided for in the contract itself or in legislation (e.g. the Civil Code). Termination has ‘future’ effects; the parties often agree on a specific notice period.
Rescission of a B2B contract
Rescission of the contract will mainly apply in the case of contracts of result, i.e. those B2B contracts which provide for the achievement of a target. The abovementioned taking of photographs by a photographer may serve as an example. The declaration of rescission, like the termination of a contract, is unilateral. However, unlike termination, the effects of rescission are retroactive. This means that upon rescission, the contract is deemed never to have been concluded and the parties should return to each other everything they have received under the contract.
The possibility to withdraw from the contract is provided for in certain cases by the Civil Code itself (e.g. when the photographer in question delays the start of the session to such an extent that it is unlikely that the photographs will be taken on the agreed date). On the other hand, there is no obstacle to accept other reasons for rescission in the contract itself. However, care must be taken to specify the reasons for rescission and the deadline within which the other party must be notified. Otherwise, such a contractual right of rescission may be ineffective.
Termination of a B2B contract by mutual consent
The vast majority of contracts can be terminated by mutual agreement at any time. If the parties agree on wish to end the relationship, there is no obstacle to agreeing on what date the B2B contract shall be finished. For evidentiary purposes, it is recommended to conclude such an agreement in writing (sometimes a written form will even be necessary if the contract indicates such provision).
Before concluding a B2B contract, it is worth checking whether it provides for specific situations allowing termination or rescission. Depending on the nature of the contract, there are also possibilities for termination provided for by law, mainly the Civil Code.
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