In the case there has been filed a lawsuit in the district court with the claim of contractual damages. The parties had made a verbal agreement regarding co-operation. In Finland verbal agreements are as binding as written agreements. The problem with verbal agreement is that it is difficult to show afterwards what was agreed. It is the plaintiff’s obligation to show that agreement was made and what was the content of that agreement. This can be achieved through various measures, but it can prove to be difficult.
In the case the defendant tried to transfer the defendant’s contractual obligations to an insolvent third party and evade its contractual obligations towards the defendant.
We have in our assignments come across with several arrangements where companies or entrepreneurs have been deliberately deceived to make written or verbal agreements with companies that are insolvent or registered abroad. These arrangements have usually been made with the intent to gain significant financial gain.
Problem prevention is in most cases considerably more economical than problem solving after the problem has emerged. Even busy companies and entrepreneurs should carry out even basic background checks when dealing with new business partners. From the trade register you can check if a person has the right to represent the company you are doing business with. Every company should have their insurances in order. Insurance coverage should also include legal insurance coverage which will usually cover the lawyer’s fees after the excess.
Jouni Aarnio
Associate
Ps. always prefer email or text message as a way of contact — this guarantees that the content of the can read afterwards by outsiders if required.
