Regulation of contracts at the Spanish Civil Code

The Spanish Civil Code, in its articles 1254 et seq., states that the contract exists since one or more persons agree to force, to any service or to give something. The parties may agree on the conditions that they consider applicable, always when they are not contrary to the law, morality or public order.

In order to be able to contract on behalf of another, anyone must be authorized or must have granted by law the legal representation, otherwise, the contract in Spain will be void, unless it is ratified by the person on whose behalf the contract has been granted, and this, before it is revoked by the other party.

The article 1261 establishes the following requirements for the validity of contracts in Spain:

-Consent of the contracting parties, being null the consent given by error, violence, intimidation or fraud.

– The Spanish contract must have a certain object

– There must be a cause of the obligation, which is the benefit or promise of a thing, or the service or benefit which is remunerated.

There are certain contracts in Spain which must be granted in a public document, among others:

 1.º  The creation, transmission, modification or termination of rights over real estate in Spain.

2.º  Leases of those Spanish real estate for six or more years, always when affect a third party.

3.º  The prenuptial agreement and its amendments.

4.º The power of attorney to enter into a Spanish marriage, the general power of attorney for  lawsuits, the special ones that should arise at a trial,  and the power of attorney for assets management.

With reference to the interpretation of contracts, the Civil Code states that when the terms are clear, it will be the literal sense of the clauses, however, if the words seem to be contrary to the clear intention of the parties, such intention will prevail. Therefore for interpretation it would be necessary to mainly consider the acts of the parties, contemporary and subsequent to the contract.

Arcos y Lamers Asociados has a team of professionals, lawyers and accountants,  ready to provide Spanish legal and tax advice. Do not hesitate to contact with us for the elaboration or revision of any agreement that may affect your interests.

María Teresa Arcos, lawyer in Marbella

Wim Lamers, accountant (economista) in Marbella.