Authorisation agreement (contract for services)

AUTHORISATION AGREEMENT

This authorisation agreement (hereinafter the "Agreement") has been entered into in [City where the contract is signed] on [Contract date] between the following parties: Agreement number: [Agreement number (if used)].

1. PARTIES

1.1 Mandator:
[Mandator's name]
Registry code / personal identification code: [Mandator's registry code / personal identification code]
Representative: [Mandator's representative (if a legal person)]
(hereinafter the "Mandator")

1.2 Mandatary:
[Mandatary's name]
Registry code / personal identification code: [Mandatary's registry code / personal identification code]
Representative: [Mandatary's representative (if a legal person)]
(hereinafter the "Mandatary")

2. SUBJECT OF THE MANDATE

2.1 The Mandator gives and the Mandatary accepts for performance the following mandate (hereinafter the "Mandate"): [Subject of the mandate].

2.2 The Mandatary undertakes to provide the Mandator with the services necessary for performing the Mandate, and the Mandator undertakes to pay the Mandatary the fee agreed in the Agreement therefor (Law of Obligations Act (VÕS) § 619).

2.3 The Mandatary is responsible for the diligent and loyal performance of the Mandate but does not guarantee the achievement of a specific economic or other result, unless the Parties have expressly agreed on such a result.

3. OBLIGATIONS OF THE MANDATARY

3.1 The Mandatary performs the Mandate loyally towards the Mandator and with the necessary diligence arising from the nature of the Mandate, in accordance with its knowledge and abilities and in the best interests of the Mandator, and prevents damage to the Mandator's property. A Mandatary acting in its economic or professional activity additionally acts at the level of generally recognised professional skills (VÕS § 620). These obligations apply in any case, regardless of whether they are separately listed in the Agreement. The Parties separately emphasise the following obligations:
[Obligations of the mandatary to be emphasised separately in the agreement]

3.2 The Mandatary follows the instructions of the Mandator. If the Mandatary performs the Mandate relying on its professional knowledge or abilities, the Mandator does not give detailed instructions concerning the manner or conditions of performing the Mandate (VÕS § 621 (1)). If the Mandatary wishes to deviate from the instructions, it notifies the Mandator thereof and awaits the Mandator's decision, unless the delay would evidently have an unfavourable consequence for the Mandator and it can be presumed that the Mandator would approve the deviation (VÕS § 621 (2)).

3.3 The Mandatary informs the Mandator of all material circumstances related to the performance of the Mandate, in particular those which may cause the Mandator to change an instruction, and, at the Mandator's request, provides information on the performance of the Mandate. The Mandatary submits to the Mandator an overview of the expenses and income related to the performance of the Mandate together with supporting documents (VÕS § 624).

3.4 The Mandatary delivers to the Mandator everything that it has received or created in connection with the performance of the Mandate, including documents, data and materials, as well as anything it received for the performance of the Mandate and did not use for the performance of the Mandate (VÕS § 626 (1)).

4. PROCEDURE FOR PERFORMING THE MANDATE

4.1 Term of the Agreement: [Term of the agreement]. End date: [End date].

4.2 Performance of the Mandate: [Performance of the mandate]. The Mandatary performs the Mandate personally and does not use the assistance of third parties without the prior written consent of the Mandator.

4.3 The Mandatary performs the Mandate within a reasonable time and coordinates with the Mandator the schedule of the acts necessary for performing the Mandate, where this is necessary due to the nature of the Mandate. Reporting and handover of work: [Reporting and handover].

4.4 The Mandator provides the Mandatary in good time with the information, documents and instructions necessary for performing the Mandate and cooperates with the Mandatary as necessary for performing the Mandate. The Mandator notifies the Mandatary without delay of circumstances which may affect the performance of the Mandate.

4.5 The Agreement does not create an employment relationship between the Parties. The Mandatary organises its activities in performing the Mandate independently, following the instructions referred to in clause 3.2, and the Mandator does not determine the Mandatary's working time or place of work, unless otherwise arising from the nature of the Mandate.

5. FEE AND EXPENSES

5.1 Amount of the fee: [Amount of the fee (€)] euros. Basis of calculation: [Basis for calculating the fee]. Payment deadline: [Payment deadline]. Together with the invoice, the Mandatary submits an overview of the hours spent on performing the Mandate and the acts performed (timesheet).

5.2 Status of the Mandatary (for tax treatment): [Status of the mandatary (for tax treatment)]. The fee referred to in clause 5.1 is a gross fee. If the Mandator is a resident legal person or a sole proprietor (Income Tax Act (TuMS) § 40 (1)), it must, by law, withhold income tax, the unemployment insurance premium and the mandatory funded pension contribution from the fee and pay social tax and the payer's unemployment insurance premium on the fee.

5.3 Unless the Parties have agreed otherwise on the reimbursement of expenses, the Mandator reimburses the Mandatary for reasonable expenses which the Mandatary has incurred for the performance of the Mandate and which it could, under the circumstances, consider necessary, except for expenses that are to be covered from the fee. It is presumed that the expenses usually arising in the performance of the Mandate are covered from the fee (VÕS § 628 (2)). The Parties have agreed on the reimbursement of expenses as follows: [Reimbursement of expenses (if applicable)].

5.4 Unless the Parties have agreed otherwise in the payment terms, the Mandatary may, before commencing the performance of the Mandate, demand from the Mandator a reasonable advance payment of the fee and of the expenses subject to reimbursement (VÕS § 628 (4)).

5.5 In the event of delay in payment of the fee, the Mandatary may claim late interest at the statutory rate (VÕS § 113 (1)).

5.6 If the Agreement terminates before the Mandate has been performed, the Mandatary is entitled to a reasonable part of the fee, taking into account, among other things, what has already been done, the benefit thereof to the Mandator and the reason for the termination of the Agreement (VÕS § 629).

6. CONFIDENTIALITY AND DATA PROTECTION

6.1 The Parties keep confidential the other Party's business and production secrets and other non-public information that has become known to them in the course of performing the Agreement and which the other Party has a legitimate interest in keeping confidential. The obligation does not apply to information which the other Party has permitted to be disclosed or which the Party is required by law to disclose. A substantive non-disclosure agreement (NDA) is, where necessary, a separate document.

6.2 During the performance of the Mandate, the Mandatary keeps confidential the circumstances that have become known to it in connection with the Mandate and which the Mandator has a legitimate interest in keeping confidential, in particular the Mandator's production or business secrets. This obligation survives the termination of the Agreement to the extent necessary to protect the Mandator's legitimate interests (VÕS § 625).

6.3 If personal data are processed in the performance of the Mandate, the Parties comply with the General Data Protection Regulation (EU) 2016/679 and the Personal Data Protection Act. If the Mandatary processes personal data on behalf of the Mandator, the Parties enter into, where necessary, a separate data processing agreement (Article 28 of the General Data Protection Regulation).

7. LIABILITY

7.1 The Mandatary is liable for a breach of the obligations arising from the Agreement, in particular the obligations of diligence and loyalty, and not for the failure to achieve a specific result, unless the Parties have expressly agreed on the result.

7.2 A Party is liable for a breach of the obligations arising from the Agreement unless the breach is excused (VÕS § 103). The injured Party has the right to claim compensation for both direct patrimonial damage and loss of profit (VÕS § 128).

7.3 An agreement which excludes or limits liability for an intentional breach of an obligation is void (VÕS § 106 (2)). The Parties have additionally agreed on liability as follows: [Additional liability terms (if any)].

8. TERMINATION OF THE AGREEMENT

8.1 Notice period for ordinary termination: [Notice period for ordinary termination]. An Agreement entered into for a specified term terminates upon expiry of the term referred to in clause 4.1; before that, a Party may terminate the Agreement in an ordinary manner only by observing this notice period.

8.2 Either Party may terminate an Agreement entered into for either a specified or an unspecified term without observing the notice period if, taking into account all circumstances and weighing the interests of both Parties, the terminating Party cannot be expected to continue performing the Agreement until the expiry of the notice period or the term of the Agreement or until the performance of the Mandate (VÕS § 631). Such a circumstance is, in particular, a material breach of contract by the other Party. Both Parties always have this right, regardless of the notice period referred to in clause 8.1.

8.3 Upon termination of the Agreement, the Mandatary hands over to the Mandator without delay all documents, data and materials related to the performance of the Mandate and submits a report on the status of the performance of the Mandate. The Parties make the final settlement within a reasonable time after the termination of the Agreement.

9. FORCE MAJEURE

9.1 A breach of obligations arising from the Agreement is excused if a Party breached the obligation due to force majeure, i.e. a circumstance which it could not influence and, based on the principle of reasonableness, it could not be expected to take into account at the time of conclusion of the Agreement, or to avoid or overcome the consequence thereof (VÕS § 103).

9.2 A Party whose performance of an obligation is prevented by force majeure notifies the other Party thereof immediately. If the effect of force majeure is temporary, the breach is excused only for the period during which force majeure prevented the performance of the obligation (VÕS § 103 (3)), and the deadlines arising from the Agreement are extended by that period.

10. NOTICES

10.1 Notices related to the Agreement which have legal consequences (including a notice of termination) are submitted to the other Party in writing or in a format which can be reproduced in writing (including by e-mail) to the address which the Party has communicated in writing to the other Party upon conclusion of the Agreement or later.

10.2 Notices of a purely informative nature may also be given by telephone. A Party notifies the other Party immediately of any change in its contact details; until the notice is received, the previously communicated details are deemed valid.

11. DISPUTE RESOLUTION

11.1 Disputes arising from the Agreement are resolved primarily by negotiation. If no agreement is reached, the dispute is resolved as follows: [Place of dispute resolution].

11.2 The Agreement is governed by the law of [Governing law].

12. FINAL PROVISIONS

12.1 Amendments and supplements to the Agreement are made in writing or in a format which can be reproduced in writing and enter into force once both Parties have confirmed them.

12.2 A Party may not transfer rights and obligations arising from the Agreement to a third party without the prior written consent of the other Party.

12.3 If any provision of the Agreement is or becomes invalid, this does not affect the validity of the remaining provisions. The Parties replace the invalid provision with a valid one that is as close as possible to it in its economic substance.

12.4 The Agreement (together with its annexes) constitutes the entire agreement between the Parties and supersedes all prior oral and written agreements relating to the subject matter of the Agreement. The Agreement enters into force once both Parties have signed it.

13. LEGAL BASIS

13.1 The authorisation agreement is governed by the provisions of the Law of Obligations Act on authorisation agreements (§§ 619–634) and the general part of the Law of Obligations Act.

13.2 Warning: the Agreement is not an employment contract. If a person performs work for another person which, under the circumstances, can be expected to be performed only for remuneration, the contract is presumed to be an employment contract (Employment Contracts Act (TLS) § 1 (2)); the provisions concerning employment contracts do not apply if the person performing the work is independent to a significant extent in choosing the manner, time and place of performing the work (TLS § 1 (4)). If the actual content of the Agreement corresponds to an employment relationship, in particular if the Mandatary works at fixed working hours and at a fixed place of work, being subject to the management and supervision of the Mandator (TLS § 1 (1)), a court, a labour dispute committee or the Estonian Tax and Customs Board may deem the relationship to be an employment contract, which may also result in the retroactive assessment of taxes. The choice of the form of the Agreement must correspond to the actual relationship between the Parties.