BizCLIR

The legal framework for contract law is in flux. A newly adopted Civil Code provides a wide range of modern, European provisions defining the rights and obligations of parties to contract, but the new Civil Code is virtually unknown. As in many other areas of Azeri law, the contract provisions of the law would be adequate if implemented, but they are not.

The failure of the courts to settle disputes according to law has already been noted and need not be repeated here. It is worth noting, however, that consistent enforcement helps to teach and refine understanding of the law among the business community, so that the failure of the courts has a ripple effect in undermining an otherwise adequate legal framework.

Notaries are another implementing institution for contracts in many former Soviet states, and Azerbaijan is no exception. The notaries are adequate for the current demands, especially in light of the changes underway (privatization and reduction of fees). They could readily serve as a principle counterpart for education on the new Civil Code, but first need training in the new laws themselves.

Few supporting institutions focus on contract law issues, other than the law schools. Azerbaijan University has updated its curriculum to address the new Civil Code, and it is hoped that Baku State is doing the same. (This was not confirmed.) In any event, these schools have the capacity, with some technical assistance desired, to upgrade understanding of the new laws among new lawyers, and possibly to provide continuing legal education services to existing lawyers.

Demand for change in contract law tends to be a function of the complexity of the contracts employed in the commercial sector. Most of Azerbaijan’s economy operates on a cash basis, with little sophisticated lending or other complex transactions taking place. Consequently, demand is appropriately low. For now, there is little need to reform the law, but great need to educate the legal community about the existing law.