Czech Republic: New Developments in Contract Registration
The Act No. 340/2015 Coll., on special conditions for the effectiveness of some contracts, the publication of these contracts and the register of contracts (the "Act") has been in effect since 1 July 2016, from which date contracts concluded with certain subjects, such as the state (the Czech Republic), state fund, etc., if the amount of the contract is above CZK 50,000, need to be published in the register of contracts (the "Register").
Since 1 July 2017, contracts to be published under the Act come into effect first on the day of their publication in the Register. If a contract is not published in the Register within three months of its conclusion, it is considered invalid from the outset, as if the contract had never been concluded.
On 20 July 2017, the Senate of the Czech Republic discussed a parliamentary bill amendment to Act. The amendment has come into effect on 18 August 2017 (the "Amendment").
The aim of the Amendment is to ensure the functioning of the Act in practice with respect to the application problems encountered so far.
This article summarises the main points of the Amendment.
Exemptions from registration obligation
The original parliamentary bill aimed to exclude certain subjects from the registration obligation. The following subjects and types of contracts will be exempt from publication in the Register:
- public universities within complementary activity;
- public research institutions within other activity in the area of research, development and innovation;
- contracts on the handling of explosives or equipment or objects intended for the production or storage of explosives;
- contracts relating to the production or use of a program, including contracts for the acquisition of rights to use the program, at least one of which is Czech Television or Czech Radio;
- contracts protected by bank secret;
- collective agreements;
- contracts concluded in the ordinary course of business by obligated persons established for the purpose of satisfying requirements of an industrial or commercial character or for the purpose of research, development or testing.
Exemptions from written form of contracts and other exemptions
A contract to be published in the Register does not have to be concluded only in writing, but may also be concluded in a different way that allows publication in the Register.
A contract on medicinal products or medical devices will become effective regardless of publication in the Register.