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Swiss Contract Law


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Swiss Contract Law

  2. 2. Madeline Wood 2 Contents Non-disclosure Non-Solicitation Data Protection Contract Termination Contract Invalidity Commercial Arbitration Governing Bodies 3 3 4 4 5 5 6
  3. 3. Madeline Wood 3 Swiss Contract Laws Non- Disclosure Agreements NDAs are intended in many cases to act as an interim measure. Should Include: 1. Name of Parties 2. Mutuality 3. Subject Matter 4. Purpose of Exchange 5. Sources of Confidential Information 6. Identity of Confidential Information 7. Exclusions 8. Identity of Authorized Personnel 9. Treatment of Confidential Information 10. No Grant of Licenses 11. No Limits on Independent Development 12. No Promises or commitments 13. Confidential Information is “AS IS” 14. Post-Termination Treatment 15. Compelled Disclosure 16. Remedies for Breach 17. Governing Law and Forum 18. Term of NDA and Non- Disclosure Obligations Questionable Provisions that Should Be Avoided Relating to Clients/Customers • Subject to same restrictions as a general post-contractual noncompetition covenant • Valid if: oThe employee had access either to them or to their customer data oIf such clients were clients/customers or clients of the employee when he or she joined the employee was responsible Relating to Employees • Duty of loyalty does not allow employees to solicit employees • Not enforceable as it usually causes a decrease in direct competition on the end market • Generally allows solicitation of employees as long as the solicitation is not based on unfair means 1. Employee Non- Solicitation Provisions • provide that neither party can solicit or hire employees from other party for a certain period of time 2. Non-Compete Provisions 3. Non-Disclosure of NDA and Existence of Relationship • Restraints on: o The existence of the NDA o The existence of discussions between the parties o The nature of discussions 4. Exclusion of Residuals o “Residuals” mean information in non- tangible form o Effectively undermines the protection of the NDA 5. Consent of Judgement o Impose an excessive monetary penalty on any breach 6. Receiving Party Notes Are Confidential Information o Such work product will invariably contain Receiving Party confidential thoughts and considerations Non Solicitation Provisions are based on Swiss case laws.
  4. 4. Madeline Wood 4 Swiss Contract Laws Data Protection Protected by the Swiss Federal Data Protection Act (DPA) and the related Data Protection Ordinance (DPO) The DPA and DPO apply to private persons and legal entities and also to federal governmental bodies as data controllers or processors Jurisdiction • Swiss Federal Act on Private International Law (PILA) o If the data subject is a Swiss resident o If the data controller or processor is a Swiss resident o IF a data protection breach has an effect in Switzerland Exemptions • The processing of data by a natural person exclusively for his private use • Pending civil, criminal, or similar proceedings • Public registers based on private law Notification • Data files or collections must be registered in advance by federal bodies Notice Periods • Parties must all have the same duration from employers and employees • Cannot be shorter than one month, unless otherwise agreed upon • If employment contract does not specify notice periods, the statutory notice periods are: oDuring the first year of employment, one month following the end of the calendar month oBetween the second • Private persons only need to register data collections Consent • Is not necessarily required for the lawful processing of personal data • Disclosure to third parties requires express consent from the disclosing party to the receiving party • Processing can still be justified Contract Termination The rights of employees after a contract termination: And ninth year of employment, two months • After then, three months • Cannot dismiss a person during illness, pregnancy, or absence from work due to childbirth Severance Payments • Statutory minimum severance payment is equal to two months’ salary • Following the entry into force of new legal provisions, such payments are in principle no longer permissible with respect to board and executive members of Swiss public companies listed on a sock exchange Protection Against Unfair Dismissal • Due to a quality inherent to the personality of the employee • Because the employee exercises a constitutional right • To prevent an employee from asserting contractual claims • Employees who are members of trade unions or fulfil certain functions in the company’s employee
  5. 5. Madeline Wood 5 Swiss Contract Laws Representation bodies are specifically protected • Swiss employment law includes rules on mass dismissals • If it was concluded to improperly deny one of the parties the jurisdiction of a court to which it is entitled under Swiss law • An arbitration agreement cannot be contested on the grounds that the main contract is invalid or that it was made in connection with a future dispute • No capacity to act • Lack of form • Impossible content • Illegal content or violation of bonos mores • Overreaching • Errors • Willful deception • Duress • Contracts that have invalid clauses are not wholly invalid. • Not based on UNCITRAL model law • The seat of the tribunal is in Switzerland • At least one of the parties had neither its domicile nor its habitual residence in Switzerland at the time the arbitration agreement was concluded • Chapter 12 gives paramount importance to party autonomy and, in the absence of an agreement between the parties, to arbitral discretion • At least one of the parties has neither its domicile nor its habitual residence in Switzerland at the time the arbitration agreement was concluded Mandatory Legislative Provisions (Article 12) • Equal treatment of the parties Contract Invalidity Circumstances under which contract clauses can be deemed invalid • The right of both parties to be heard in adversarial proceedings • Article 177: oObjective arbitrarily oSubjective capacity to arbitrate of states and state-controlled enterprises • Article 178: oForm of the arbitration agreement oConflict of laws rule for the determination of the law governing the substantive validity of the arbitration agreement • Article 180: oRight to challenge an arbitrator on the grounds of justifiable doubts as to his independence oRestriction of challenges of an arbitrator by the appointing party to grounds which came to the party’s attention only after the appointment • Article 181: oLis pendens • Article 185: oJudicial assistance by state courts • Article 190: oGrounds for setting aside an award Commercial Arbitration Swiss law of international arbitration is set out in Chapter 12 of the Federal Private International Law Act (PILA), which entered into force on 1 January 1989.
  6. 6. Madeline Wood 6 Swiss Contract Laws Prohibit Types of Disputes • In case of disputes exclusively entrusted to state courts according to provisions that are deemed mandatory as a matter of public policy Remedies • Performance (or damages, if specific performance is no longer possible) • Creation, modification, or termination of a legal relationship • Declaratory relieft 1. ICC International Court of Arbitration 2. Swiss Chambers’ Arbitration Institution 3. WIPO Arbitration and Mediation Center 4. Court of Arbitration for Sport (CAS) Governing Bodies Below are the most popular organizations