Freedom of Contract and Its Limits
A security services contract is built on the principle of freedom of contract established by the Civil Code: subjects of private law may, within the limits of the law, freely conclude contracts and determine their content; they may even conclude contracts that are not provided for by law but do not contradict it. This means that the form and conditions of a security services contract are left to the agreement of the parties, unless the validity of the contract, for the protection of the essential interests of society or the person, depends on a state permit — such a case must be regulated by a separate law.
Freedom also has limits: where one party to the contract occupies a dominant position in the market, it bears, in that field of activity, the obligation to conclude contracts and may not groundlessly offer the counterparty unequal conditions. Likewise, persons who acquire or use services for non-entrepreneurial purposes or to satisfy vital needs may not be unreasonably refused a contract where the other party acts within its entrepreneurial activity. For the security market these rules mark the boundary between commercial freedom and abuse of a stronger position.
The Concept of the Contract of Mandate
Security services contracts often rest on the model of the contract of mandate: under a mandate, the mandatary is obliged to perform one or several acts entrusted to him in the name and at the expense of the mandator. In the security sphere this construction means that the service provider acts in the name of and at the expense of the client, and precisely this connection must be reflected in the content of the contract: which acts are entrusted, in whose name they are carried out, and who finances them. A clearly defined mandate prevents disputes about the scope of the services and about who bears the costs of particular actions.
Termination of the Contract
A contract of mandate may be terminated by the parties at any time, and an agreement to waive this right is void — a guarantee equally important for security contracts, since the performance of the obligations rests on the trust between the parties. Where the mandatary terminated the contract at a time when the mandator was deprived of the possibility of securing his interests otherwise, the mandatary must compensate the damage caused by the termination, unless he had a significant ground for it. Where the mandator terminates, he must reimburse the mandatary all necessary expenses incurred in performing the mandated act, and, if the contract was for remuneration, pay the fee in proportion to the work performed. These rules give both parties a lawful exit while protecting the counterpart from unjustified loss.
A Practical Framework for Drafting
Drafting a security services contract begins with three questions: which acts are entrusted and what territory or objects the protection covers; in whose name and at whose expense the service provider acts; and how the service is valued and what happens upon a breach of its quality. Since the Code gives the parties freedom to determine the content, it is precisely in the contract that the details decisive in a dispute must be laid down: the protection schedule, the response procedure, the exchange of information, the limits of liability, and the termination procedure.
Knowing the termination rules gives both sides predictability of compensation: as noted, the parties may terminate at any time, but the financial consequences differ — who terminated and on what ground determines whether damage, expenses, and remuneration are reimbursed. Anticipating these consequences in the contract stops a conflict at an early stage.
Equality of Market Participants
In the security market the principle of freedom of contract extends equally to large companies and small service providers, and this is precisely why the special obligation of a party in a dominant position matters: a strong market player may not groundlessly refuse a contract or offer unequal conditions, which also protects small buyers of services. This norm should be perceived as the starting point of contract negotiations.
Frequently Asked Questions about Security Services Contracts
May the content of the contract be anything?
Within the limits of the law — yes: the parties freely determine the content, unless a permit is required; permit-dependent cases are regulated by a separate law.
When may a contract not be refused?
A party in a dominant position bears the obligation to contract; and buyers of services for vital needs may not be unreasonably refused.
May the contract be terminated at any time?
Yes, and a waiver of this right is void; the consequences depend on who terminated and why.
What do the parties owe upon termination?
The mandator — reimbursement of necessary expenses and remuneration for what was performed; the mandatary — compensation of damage, absent a significant ground.
How We Help on Legal.ge
The Legal.ge team assists both sides in drafting security services contracts and in related disputes: we prepare contractual terms, analyze liability and the consequences of termination, and represent your interests in negotiations and in court. Contact us through the Legal.ge website.