When Contracts Don’t Protect You
Contracts are generally divided into two types: named contracts and unnamed contracts.
Named contracts are those explicitly defined and regulated by the law. The legislature has given these contracts clear definitions, conditions, and rules that can be used as a basis for drafting. For instance, in a contract of sale—a classic named contract—if the parties fail to explicitly include a clause regarding delivery of the goods, this omission does not mean the buyer forfeits their right to receive them. The law has already established general frameworks and legal principles for such contracts. Because of this standardization, reviewing named contracts is relatively straightforward for a qualified and experienced lawyer, especially contracts like sales, agency, and brokerage agreements in both civil and commercial contexts.
In contrast, unnamed contracts are those not specifically outlined in the law. These derive their legal strength from Article 89 of the Egyptian Civil Code, which states:
“A contract is concluded once two parties exchange matching expressions of will…”
Likewise, Article 147 declares:
“The contract is the law of the parties…”
This latter phrase has become a commonly quoted legal principle, passed down through generations. These articles empower individuals with the freedom to contract as they see fit, provided the agreement doesn’t violate public order or mandatory legal provisions. In fact, between the parties, the contract can be more powerful than the law—as long as it doesn’t contradict overriding legal norms.
However, this flexibility makes legal consultation essential before signing any agreement. With unnamed contracts, the business world has broken free from rigid legal formats, gaining greater flexibility to create tailored agreements that address evolving commercial and civil needs.
But this does not guarantee the enforceability or legal soundness of every contract, regardless of its content. The fast pace of modern business often drives parties to create contract terms that clash with mandatory rules in Egyptian law. That’s where professional legal expertise becomes indispensable. A skilled and experienced legal team—like the one at Korayem Legal Services—can provide the necessary guidance, review, and validation to ensure these contracts comply with the law.
Take for example a partnership agreement that stipulates one partner bears no losses, and the others must reimburse their capital fully without risk. This type of clause—commonly known as a “lion’s share” clause—is invalid, even if all parties agree to it.
Or consider a currency exchange agreement where the transaction is based on black-market rates rather than through licensed banks. Despite mutual consent, such a clause is not legally recognized, as it conflicts with public policy and mandatory legal provisions.
Similarly, in a real estate sale agreement, a clause stating that the buyer will bear the real estate transaction tax instead of the seller is legally void—Egyptian law mandates that the seller bears this tax, and it is considered a rule of public order.
This highlights a critical need in the business sector: the development of innovative agreements—such as partnership contracts, profit distribution agreements, or custom business arrangements—that respond to real market demands. However, many such agreements may inadvertently violate mandatory legal provisions.
This is why it is vital to engage with a qualified and experienced commercial contracts lawyer, who can ensure your agreements are not only tailored to your business needs but also legally sound under Egyptian law.
Often, a lawyer can translate the parties’ intentions into legally compliant contract language. The challenge lies in structuring those intentions into enforceable legal documents—and this is where a skilled legal professional truly adds value.
Contract drafting or review by a specialist is not a luxury—it is a necessity. Legal mistakes in the world of business are all too common and can result in significant financial losses.
