What Is a Protocol of Disagreements and When Is It Drafted?
Purpose and Functions of the Protocol of Disagreements
A protocol of disagreements is a document that records certain inconsistencies between parties regarding the content of contract terms. Upon receiving a draft of such a contract from the other party, a person, if they do not agree with certain provisions, has the opportunity to propose their own wording by setting it out in the protocol. Subsequently, this helps to settle differences and avoid misinterpretation of the contract.
Typical Cases When a Protocol Is Applied
A protocol of disagreements is drafted if a person, having received a draft contract from a counterparty, has their own vision of certain provisions thereof: delivery terms, contract amount, grounds for termination, guarantees, etc. Usually, such a protocol is drafted specifically in the sphere of commercial legal relations.
Moreover, drafting a protocol of disagreements is a current practice when concluding international agreements, as it is necessary to harmonize the norms of two different legislative systems. Furthermore, there are cases where a protocol is needed for the specific interpretation of contract norms due to the complexity of translation.
Regulatory Framework Regarding the Protocol of Disagreements
Article 181 of the Commercial Code of Ukraine, until August 16, 2020, clearly established certain provisions regarding the protocol of disagreements. It was noted that in the presence of objections regarding specific terms of the contract, the party receiving the draft contract drafts a protocol of disagreements. A reservation about this fact is made in the contract. Then, within a 20-day period, the person who drafted the protocol sends it to the other party in two copies together with the signed contract.
At the same time, it was indicated that the party receiving the protocol is obliged to consider it within 20 days and, within the same period, take measures to settle disagreements with the other party and include all accepted proposals in the contract. Those disagreements that the parties could not settle, with the consent of the second counterparty, must be submitted to the court within the same period.
If the parties ultimately reached an agreement regarding the contract terms set out in the protocol, such agreement is confirmed only in writing.
Currently, the above-described provisions of Article 181 of the Commercial Code of Ukraine have already lost their validity; moreover, the Commercial Code of Ukraine was repealed altogether. Therefore, the Civil Code of Ukraine, which defines the legal regulation of obligations, and the Commercial Procedural Code of Ukraine, which specifies the mechanism and procedure for resolving a dispute in case of inconsistency regarding contract terms, remain the relevant regulatory acts.
Legal Significance of the Document
As can be understood from the content of the protocol of disagreements, it is not mandatory. Its compilation is possible only if a party wishes to set out certain terms of the contract differently from how they were specified by the other party.
In addition, a protocol of disagreements can serve as evidence in court proceedings, in particular, to prove the intentions of a party and attempts to settle inconsistencies.
Thus, considering the legal significance, the named document:
- fixes proposals for changing the contract;
- is part of the main contract;
- affects the moment of contract conclusion;
- serves as evidence in court.
Can a Template or Sample Protocol Be Used?
In our opinion, a template or sample protocol can be used only as an example for writing your own document. One cannot simply download a template, enter the parties’ details, and consider the protocol drafted.
This position is explained by the fact that every contract is unique with its own unique provisions. A template protocol will not be able to foresee all the peculiarities of each contract.
Consequently, a template or sample can save your time on drafting the document, but at the same time, such auxiliary tools must always be adapted to your own conditions.
Protocol of Disagreements to a Contract: Sample
PROTOCOL OF DISAGREEMENTS
TO THE GOODS PURCHASE CONTRACT No. ______ dated “_” ____________ 20
Dnipro City “_” ____________ 20
THE SUPPLIER, on the one hand, and THE BUYER, on the other hand, have concluded this Protocol of Disagreements to the Goods Purchase Contract No. ______ dated “_” ____________ 20 (hereinafter referred to as the “Protocol”) regarding the following:
- The Parties agreed to amend the following clauses of the Goods Purchase Contract No. ______ dated “_” ____________ 20 and to state them in the following wording:
| Contract Clause No. | Contract Wording | Wording Proposed by the BUYER | Comment |
| 2.3 | The Supplier bears no responsibility for the loss of goods. | The Supplier bears responsibility for the lost goods in the amount of the value of such lost goods. | The Contract clause violates the rights of the BUYER |
| 3.4 | The Supplier has the right to terminate the contract unilaterally | The Contract cannot be terminated unilaterally | The Contract clause violates the rights of the BUYER |
This Protocol enters into force upon its signing by the parties.- This Protocol is drawn up in two copies having equal legal force. This Protocol is an integral part of Contract ___________________________ (full name of the contract) No. ______ dated “_” ____________ 20, signed between the parties.
- Contract ___________________________ (full name of the contract) No. ______ dated “_” ____________ 20 is considered concluded with the changes in the wording set out in this protocol.
Details and signatures of the parties:
Procedure for Drafting a Protocol of Disagreements
Like any document, a protocol of disagreements also has its own order and procedure for drafting.
Firstly, it is necessary to understand which clauses of the contract do not satisfy the party wishing to initiate the conclusion of the corresponding protocol (by the way, such initiation can be done by any of the parties). To do this, one should analyze the conditions of the main document and highlight those with which you do not agree. This will help you to more quickly set them out in the protocol in the form you wish to see them.
Secondly, oddly enough, it is necessary to draft the protocol of disagreements itself. We will provide the details, basic requirements for it, as well as practical advice on writing in the following sections.
Thirdly, the protocol must be sent together with the contract to the other party. After this, the coordination of provisions that caused disagreements takes place between the parties. Furthermore, if agreement is not reached regarding certain conditions, one should appeal to the court.
Structure and Mandatory Particulars of the Protocol of Disagreements
What Must Be Contained in the Document:
When we speak about an official document, which is what a protocol of disagreements is, we always speak about its structure and mandatory particulars.
Regarding the structure and content of the protocol, the following are indicated therein:
- name of the document (in particular, indication of the contract to which the protocol is drafted);
- details of the parties;
- place and date of drafting;
- contract clauses subject to replacement, with the statement of their new wording;
- signatures and seals (if necessary) of the parties.
Thus, when drafting a protocol of disagreements, one should adhere to the proper content and structure of the document for its proper formatting.
How to Correctly Formulate Disagreements
In order for the protocol to become a truly effective instrument for regulating disagreements, first of all, it is necessary to formulate them correctly. It can be safely noted that proper formulation of disagreements is the key to the success of their coordination.
Firstly, regarding the form of presenting disagreements, it is best to use a tabular view. You can make several columns named: “Contract Clause No.”, “Contract Wording”, “Wording proposed by the party initiating the protocol of disagreements”, “Comment”.
Secondly, formulate disagreements clearly. Specify concretely the clause you want to change and its new wording in your vision. Also, do not apply general phrases, but use appropriate terminology (do not use words that have ambiguous interpretation).
Thirdly, which is very important, the proposals you submit must not contradict other provisions of the contract. After all, in case of non-compliance with the specified condition, collisions may arise that will only harm your legal relations.
In addition, do not neglect the “Comment” column. Use it to explain why exactly the changes are being made. This justifies the introduction of new provisions and serves as an additional argument to support your position.
How to Format and Submit the Protocol to the Other Party?
Formatting Requirements
A protocol of disagreements, like any document, must be formatted in accordance with certain standards. The main thing is compliance with DSTU 4163:2020, which specifies all requirements for document formatting.
In particular, the cited standard establishes that:
- for printing texts, the Times New Roman font sized 12-14 points should be used;
- the text of documents on A4 format paper sheets is recommended to be printed with 1-1.5 line spacing;
- margins in the document must correspond to the following values: 30 mm — left; 10 — right; 20 — top and bottom.
Of course, there are a number of other provisions that should be followed for the appropriate formatting of the protocol of disagreements.
Procedure for Submission of the Protocol of Disagreements
One of the important stages of concluding a protocol of disagreements is sending it to the other party, as not every submission will be considered proper. There is currently no legislatively fixed order for such submission. Therefore, one should adhere to general submission rules, which will be relevant in this case as well.
There are several variants of such submission.
Firstly, you can hand over the protocol personally to the other party. This can be convenient if you are located near your counterparty, as you will be sure that the person received the document.
Secondly, send it by e-mail. To do this, it is mandatory to sign the documents with a Qualified Electronic Signature (QES).
Thirdly, one can use regular mail. The protocol must be sent by a registered letter with an inventory of enclosures and a notice of delivery.
What to Do If the Other Party Does Not Agree?
Cases often occur when the initiating party has prepared changes for the contract, but the other party does not agree with them. What happens in such a situation, and what is the option for its solution? We will try to answer the posed question.
To begin with, it should be noted that in case of non-agreement by the other party with the proposals set out by you, the deal may not take place at all. In case you are convinced that the conditions cited by you have strong legal argumentation, other options can be applied, which we will consider below.
In case of contradictory positions regarding the contract provisions, it would be expedient to hold negotiations. During the negotiations, disputed contract clauses should be discussed and, if possible, a compromise regarding them should be reached.
In the event that it is still not possible to reach an agreement, one can appeal to the court. The court will consider both versions of the contract set out in the protocol and make a decision regarding the presence of legal grounds for its change.
In addition, situations happen when the other party simply ignores the protocol of disagreements submitted by you. In this case, the court may assess such actions as a refusal of the contract or, conversely, agreement with the changes proposed by you in the protocol.
Typical Mistakes When Drafting a Protocol of Disagreements
When drafting a protocol of disagreements, cases of making mistakes that can have unpredictable and unpleasant consequences for the parties are not uncommon. In order to avoid such mistakes, we will try to list the most common ones.
Most often, a protocol of disagreements has flaws in its formatting. The following are missing or incorrect: document name, parties’ details, place and date of drafting, signatures and seals (if necessary) of the parties.
Also, situations are not uncommon when a protocol cannot be considered correctly drafted due to incorrect presentation of proposals for changing the contract. As already noted in previous sections, one should not neglect the correct formulation of disagreements, because without their proper presentation, the document simply will not make sense.
Moreover, we consider it necessary to add that if you are unsure about the correctness of drafting a protocol of disagreements to a contract, it is better to contact a qualified specialist. A lawyer or attorney will help you write the appropriate document in compliance with all provided requirements.