🧾 Key Elements of a Contract Between LLCs

1. Identification of both companies
   – company name, legal address, registration number, trade registry details
   – must be signed by the statutory representative (e.g. managing director), or by someone with written power of attorney

2. Subject of the contract
   – clearly define what will be delivered or performed
   – for recurring cooperation, consider a framework agreement

3. Price and invoicing
   – clearly state whether VAT is included
   – set payment terms, due dates, and possible prepayments

4. Deadlines, penalties, and liability
   – define exact dates or time frames for performance
   – include late penalties or fines
   – outline liability for damage and complaint procedures

5. Termination and jurisdiction
   – include rules for notice, withdrawal, and duration
   – choose the applicable court or dispute resolution mechanism

🪤 Common Mistakes

• Signed by an unauthorized person – e.g., an employee without proper authority

• Missing VAT information – leads to billing disputes or tax issues

• No penalties or vague responsibilities – makes enforcement difficult

• Using a generic template without adapting it to the deal

💡 Lawyer’s Advice

“Contracts between LLCs must be legally precise—it’s not enough that both parties agree. I often handle disputes where a contract was signed by someone without legal authority, or where key terms were unclear. A legally secure contract starts with careful drafting.”

🧩 Real-Life Example

Company A contracted Company B for a custom product. But the contract was signed by a sales rep from B, who didn’t have written authorization. When problems arose, B claimed there was no valid contract. The court agreed—because the rep lacked legal authority. Company A ended up bearing the loss.