Frequently asked questions
Does the cooperation agreement have to be in writing?
The cooperation agreement may include elements from various types of agreement on which in some cases a mandatory written or notarized format may be prescribed (for example an agreement aimed at the transfer of real estate). While usually the cooperation agreement has no mandatory format, it is still advisable to conclude the agreement in writing in order to avoid potential disputes and vagueness regarding the agreements related to the cooperation.
Can the parties cancel the agreement?
The parties may always cancel the agreement by mutual agreement and the parties also have the option to agree in the agreement whether it can be cancelled without any violation from the other party or the agreement remains valid until the end of the cooperation project in case no violations occur.
Although, either party may cancel the agreement extraordinarily if it becomes evident that, bearing in mind all the circumstances and the interests of both parties, the party wishing to cancel the agreement cannot be expected to continue performance of the agreement until the completion of the cooperation project.
How to choose the governing law?
Usually the parties of the agreement have the right to choose the governing law. However, if the parties have chosen foreign law to govern the document, whether or not accompanied by the choice of foreign jurisdiction, shall not, where all the elements relevant to the contract at the time of the choice are connected with one state only, prejudice application of such rules of the law of the state which cannot be derogated from by contract (mandatory rules).
In choosing the governing law it should be kept in mind that also the disputes arising from the agreement (incl. judicial disputes) will be settled based on the chosen law. Therefore, if a foreign law is chosen, it should be assessed, whether the parties are ready for the application of the foreign law. If there is no connection with any foreign country then it is advisable to apply Estonian law to the agreement.
We also point out that this document has been prepared based on Estonian law and therefore choosing another country's law may (but may not) result in conflicts between the contents of this document and the other country's law.
How to choose the court for dispute settlement?
The parties may choose in which dispute settlement institution their disputes are settled.
Disputes may be settled in court or in arbitral tribunal.
If the parties wish to resolve their disputes in the Estonian court, they have to choose one of the four county courts: Harju county court, Viru county court, Pärnu county court or Tartu county court.
The judgment of the county court can be appealed to the circuit court and then to the Supreme Court.
If the parties have not agreed on any specific court, then usually the statement of claim must be submitted to the court of the place of residence of the respondent.
If the parties wish to resolve disputes in the arbitral tribunal, they have to choose in which one. In Estonia there are two permanent arbitral tribunals - Arbitration Court of the Chamber of Notaries and Arbitration Court of the Chamber of Commerce and Industry of Estonia.
Arbitration is an alternative way to resolve disputes. Considering that the parties have the right to name the judges and decide the number of judges, the parties can be certain of the knowledge, experience and impartiality of the judges. In addition to that the parties can choose the language of the proceedings, applicable law and rules of procedure.
The judgments of the arbitration court are final and are not to be appealed. The judgment may be annulled by the national court only on exemptions stated by law.