Over time a number of customary practices regarding entering into contracts have evolved in Qatar. These practices include such things as initialling or stamping each page of a contract. However, under Qatari law, these practices are not strictly necessary and do not affect the creation of a contract or its enforceability. Entering contracts in Qatar generally is governed by the Civil Code Law No. (22) of 2004 (the "Civil Code").
Form
The Civil Code provides that consent is not required in any specific form for a contract to be concluded, unless otherwise stipulated by law. The Civil Code further provides that the contracting parties are free to agree on a specific form for their contract, and where they have agreed on the specific form, neither party may claim the existence of the contract if it is not in the agreed form without the consent of the other party.
While the purpose of this article is to look at the formalities of entering into contracts, it should be noted that a contract may come into being in the absence of signing a formal written contract. Civil Code Article (65) makes clear for example that willingness to be bound by a contract may be expressed "orally or in writing or by a commonly used sign or by some effective exchange that indicates mutual consent or by adopting any other position in respect of which the circumstances of the situation leave no doubt as to its indication of the true intentions thereof" (unofficial translation).
In some circumstances it may even be possible for silence to be construed as acceptance of a contractual offer. It is therefore important for a party not to do anything that may be construed as willingness unless communication of such willingness is intended. Of course, the reason why parties ordinarily choose to execute an agreement in a formal manner is to manage the timing at which such willingness is communicated – and to minimise evidential issues regarding the existence of such willingness and the subject matter thereof (ie, the rights and obligations under the contract).
Date
The Civil Code provides, that a contract will typically be concluded once an offer is accepted. Although contracting parties have the liberty to agree otherwise (eg, that certain offers will be deemed to be accepted unless specifically rejected), persons entering into a contract are not at liberty to backdate a written contract to a date before the contract has been signed. However, that does not mean that an agreement may not be drafted to have effect before the date on which it is signed.
Counterparts
The Civil Code provides for entering into contracts by correspondence, which may be used to support entering into contracts by signing different counterparts, or copies of the same contract circulated and signed by a different party, provided that, "The conclusion of a contract by correspondence will be deemed to have taken place at the time and place at which acceptance is communicated to the offeror, unless otherwise agreed or the law or custom stipulates to the contrary" (unofficial translation).
As a result, when contracts have been concluded in counterparts or by correspondence, the contract will be deemed to have been made at the time and place when acceptance has been communicated to the offeror, unless otherwise agreed or law or custom stipulates the contrary. Typically, this will be when acceptance has been received from the relevant party.
Powers of attorney
The Civil Code requires that powers of attorney must be, "in the form required for the legal act forming the object of the power of attorney" (unofficial translation).
In practice, issuing a power of attorney inside Qatar requires signing the power of attorney before the Administration of Real Estate Registration and Authentication Department of the Qatar Ministry of Justice (the "Authentication Department") on the prescribed "notarisation" paper. Issuing a power of attorney outside Qatar for use inside Qatar requires that the power of attorney be notarised, attested, and consularised to the level of the Qatari Embassy in the country of origin, before it is re-attested by the Ministry of Foreign Affairs in Qatar.
Mortgages
According to the Civil Code, an official mortgage over real estate can only be concluded if certified in accordance with the law.
Like powers of attorney, issuing official mortgages requires executing the mortgage before the Authentication Department on prescribed notarisation paper. There is also a registration system, and applicable fees in relation to registering transfers of real estate and mortgages (but not leases, which may be subject to different requirements). Such fees are calculated as a percentage of the value of the transaction.
Such mortgages may be established as security for a debt or opened credit, and those who hold a registered mortgage will take priority before others who are owed money from the price realised from the sale of such property.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
