Why You Need to Understand Contracts in Spain
Whether you’re entering a commercial partnership, buying property, or hiring local services, signing contracts with a Spanish company must follow local legal standards to ensure enforceability and avoid costly disputes.
📑 Common Contracts Signed with Spanish Companies
| Contract Type | Use Case |
|---|---|
| Commercial Agreement | Supplier, distributor, agency deals |
| Employment Contract | Hiring Spanish staff |
| Lease Contract | Renting property or office space |
| Service Agreement | With accountants, marketers, or consultants |
| Share Purchase Agreement (SPA) | Buying into a Spanish business |
| Joint Venture Agreement | Strategic alliances with Spanish firms |
🛡️ What to Know Before Signing
1. Due Diligence on the Spanish Company
Always verify:
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Company’s registration in the Mercantile Registry
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Legal representative’s authority
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NIF (tax ID) and registered address
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Outstanding debts or insolvency status
Borderless Lawyers can perform a contractual due diligence check before you commit.
2. Language of the Contract
Spanish is the default legal language. If signing a bilingual contract:
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Both versions must be equally valid
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Ensure proper translation of technical and legal terms
3. Essential Elements of a Valid Contract in Spain
✅ Consent of both parties
✅ Defined subject and scope
✅ Legal cause (justified reason for the agreement)
✅ Signatures of authorized parties
Optional elements:
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Jurisdiction clause (Spain vs. international courts)
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Arbitration clause (optional alternative to court)
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Force majeure and termination clauses
⚖️ Legal Format & Formalities
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Written contracts are standard, especially for cross-border matters
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Notarization is optional but adds legal strength, especially for real estate or high-value transactions
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Some contracts may require registration (e.g. leases over 11 years)
📬 Can You Sign Remotely?
Yes. You can sign:
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Electronically, with a valid digital signature
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Via power of attorney, executed before a notary in your country and legalized for Spain (with Apostille)
🚨 Red Flags to Watch Out For
🚩 Lack of clarity in terms and obligations
🚩 No defined payment conditions or penalties
🚩 No dispute resolution clause
🚩 No identification of parties’ roles
🚩 Oral agreements without supporting emails or documents
🧾 Tax Implications of Signing Contracts in Spain
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Contracts involving payment of services or rentals must often include VAT (IVA)
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Withholding tax may apply to foreign service providers or freelancers
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Property and employment contracts come with specific tax/reporting duties
🔎 Real Example
A Canadian tech company signed a software licensing deal with a Spanish SaaS provider. We reviewed the draft, adjusted the jurisdiction clause to Madrid Arbitration Court, clarified data protection responsibilities under GDPR, and added late-payment penalties. The result: a clear, enforceable contract that aligned with Spanish and EU law.
👩⚖️ We Can Help You With
✅ Reviewing or drafting contracts under Spanish law
✅ Negotiating key clauses with Spanish companies
✅ Verifying the authority and solvency of the other party
✅ Translating contracts and explaining legal jargon
✅ Representing you in disputes if things go wrong
📞 Ready to Sign with Confidence?
Avoid misunderstandings and future disputes by having a legal expert on your side.
At Borderless Lawyers, we guide foreigners through every stage of contracting in Spain.