Romanian Contract Law Overview

Romania’s contract law is primarily governed by the Civil Code and various specific laws that regulate different types of contracts. Understanding the legal requirements and principles is crucial for drafting, interpreting, and enforcing contracts in Romania.

This guide outlines the essential elements of a valid contract under Romanian law and provides answers to frequently asked questions about contract law in Romania.

Essential Elements of a Valid Contract in Romania

A valid contract in Romania must contain all of the following essential elements:

Contract Formation in Romania

General Principle

Romanian contract law follows the principle of “consensualism,” meaning that contracts are generally concluded when the parties reach agreement on essential terms. In most cases, contracts do not require a specific form to be valid.

Essential vs. Non-Essential Terms

A distinction exists between:

• Essential Terms: Must be agreed upon for the contract to be binding (e.g., parties, subject matter, price)
• Non-Essential Terms: May be filled in by default legal provisions if the parties have not specified them

Agreement Must Be Reached On:

• Identity of the parties
• Essential terms of the contract
• Consideration or price (where applicable)

Specific Requirements for Different Contract Types

Real Estate Contracts

Contracts for the sale of real property must be concluded in writing and registered with the land registry to be enforceable against third parties.

Employment Contracts

Must comply with Labor Code requirements and include:

• Job description and responsibilities
• Salary and compensation terms
• Working hours and conditions
• Duration (fixed-term or indefinite)
• Mandatory statutory clauses

Consumer Protection Contracts

Contracts involving consumers have special protections:

• Clear and transparent terms
• Written copies provided to consumers
• Specific protections against unfair terms
• Right of withdrawal or cooling-off period

Commercial Contracts

Business-to-business contracts have greater freedom but must still:

• Comply with competition law
• Be in writing if significant value is involved
• Include clear payment terms
• Specify dispute resolution mechanisms

Written vs. Verbal Contracts

General Rule

Romanian law does not generally require contracts to be in writing to be valid. Verbal contracts can be binding and enforceable if all essential elements are present and agreed upon.

When Written Form is Required

However, certain types of contracts must be in writing to be enforceable:

• Real estate transactions
• Contracts exceeding a certain monetary threshold (typically RON 10,000 or equivalent)
• Employment contracts (must be in writing)
• Consumer credit contracts
• Any contract the law specifies must be in writing

Best Practice

Even when not required by law, written contracts are strongly recommended to:

• Avoid disputes about the terms agreed
• Provide clear evidence of the agreement
• Specify performance obligations and remedies
• Protect both parties’ interests

Contract Breach and Remedies

What Constitutes a Breach?

A breach occurs when a party fails to perform its contractual obligations or performs them improperly or late, without legal justification.

Legal Remedies Available

If a contract is breached in Romania, the non-breaching party may seek:

• Damages: Compensation for losses suffered due to the breach
• Specific Performance: Court order requiring the breaching party to perform the contract
• Termination: Right to terminate the contract and recover damages
• Rescission: Cancellation of the contract with restitution of consideration
• Interest and Penalties: Default interest and contractual penalties as agreed

Defenses to Breach

A party may not be liable for breach if:

• Performance became impossible due to force majeure
• The other party committed a material breach first
• Performance was excused by operation of law
• The breaching party exercised due diligence to prevent the breach

Legal Compliance in Contracts

Lawful Object Requirement

Contracts with illegal purposes or involving illegal activities are not enforceable in Romania. The object of the contract must be:

• Lawful and not contrary to law
• Not contrary to public policy
• Not contrary to morality or public order
• Possible and determined or determinable

Compliance with Mandatory Law

Contracts must comply with all mandatory legal provisions, which cannot be waived by agreement, including:

• Consumer protection laws
• Employment and labor laws
• Competition law provisions
• Data protection and GDPR requirements
• Professional licensing requirements

Frequently Asked Questions

What are the essential elements of a valid contract in Romania?

The essential elements include: (1) Offer and acceptance, (2) Mutual consent, (3) Capacity, (4) Lawful object, (5) Consideration, (6) Certainty of terms, (7) Form and formalities, (8) Intention to create legal relations, (9) Compliance with formal requirements, and (10) Absence of vices of consent.

Do contracts in Romania need to be in writing?

In general, contracts in Romania do not require a specific form to be valid. However, certain contracts, such as real estate transactions or contracts involving significant amounts of money, may need to be in writing to be enforceable. Employment contracts must always be in writing.

Can verbal contracts be enforceable in Romania?

Verbal contracts can be enforceable in Romania, provided all essential elements are present. However, it is advisable to have written contracts whenever possible to ensure clarity and avoid potential disputes over the terms of the agreement.

What happens if a contract in Romania is breached?

If a contract in Romania is breached, the non-breaching party may seek legal remedies, such as damages, specific performance, or contract termination. The available remedies will depend on the specific circumstances and the terms of the contract.

Are there any specific formal requirements for contracts in Romania?

Certain contracts in Romania may have specific formal requirements imposed by law. For example, contracts related to consumer protection, labor law, or real estate transactions may require additional provisions or specific formalities to be met.

Can contracts with illegal purposes be enforced in Romania?

Contracts with illegal purposes or involving illegal activities are not enforceable in Romania. Contracts must have a lawful object and comply with public policy and legal requirements.

Is it necessary to consult with a lawyer for contract-related matters in Romania?

While it is not mandatory to consult with a lawyer for contract-related matters in Romania, seeking legal advice is highly recommended. A qualified Romanian attorney can provide guidance, ensure compliance with Romanian contract law, and address specific circumstances or requirements related to your contract.

What is the difference between void and voidable contracts?

Void Contracts: Are completely invalid from the beginning and have no legal effect (e.g., contracts with illegal objects). Voidable Contracts: Are initially valid but may be canceled by one party under certain circumstances (e.g., contracts based on fraud or duress).

How long can a contract be enforced in Romania?

The period for enforcing a contract through legal action is generally subject to statutes of limitations. The limitation period is typically 3 years for breaches of contract, though this may vary depending on the specific type of contract.

Best Practices for Romanian Contracts

Before Signing

• Review all terms carefully and ensure you understand them
• Verify the other party’s identity and capacity to contract
• Seek legal advice if the contract is complex or high-value
• Ensure all essential terms are clearly specified
• Check for compliance with applicable law

Contract Content

• Use clear, unambiguous language
• Specify all essential terms in writing
• Include payment terms, delivery dates, and performance obligations
• Define remedies for breach and dispute resolution procedures
• Include force majeure and termination clauses

After Execution

• Retain copies of the signed contract
• Document any modifications or amendments in writing
• Keep records of performance and communications
• Monitor compliance with contract terms
• Seek legal advice if disputes arise